This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Obama Administration Overrules Apple Import Ban (Update 1)

Stocks in this article: AAPL T

President Barack Obama's trade representative vetoed on Saturday a ban on imports of some Apple (AAPL) iPads and older iPhones, dealing a setback to rival South Korean electronics company Samsung.

U.S. Trade Representative Michael Froman overruled a June decision by the U.S. International Trade Commission, which had banned imports of the iPhone 4 and some variations of the iPad 2. The commission ruled that the Chinese-made Apple devices violated a patent held by Samsung and couldn't be imported. The ban never went into effect, though, because the Obama administration had 60 days to decide if it would uphold the commission.

Obama is against import bans on the basis of the type of patent at issue in the Samsung case. The White House has recommended that Congress limit the ITC's ability to impose import bans in these cases.

Samsung and Apple are in a global legal battle over smartphones. Apple argues Samsung's Android phones copy vital iPhone features. Samsung is fighting back with its own complaints.

In an email, Apple spokeswoman Kristin Huguet said the company applauded the administration "for standing up for innovation." A message seeking comment from Samsung was not returned.

Froman wrote in a letter to the commission that he has concerns about patent holders getting too much leverage over competitors that use their technology under licenses.

Companies license patented technology to competitors so the devices can communicate as part of an industry standard for cellphones. Under the "standards-essential patent" legal theory prevailing in federal courts, holders of such patents are obligated to license them to all comers on "fair, reasonable and non-discriminatory" terms.

U.S. courts have ruled that such patents cannot be the basis for import bans. The International Trade Commission follows a different standard than the courts, but the Obama administration wants it to adhere to the same principles.

Froman wrote that he shares the Obama administration's concerns that the holders of standards-essential patents could get "undue leverage" over their competitors.

Last year, a federal court ruled that Samsung owed Apple $1 billion in damages for infringing on non-essential Apple patents. But the judge refused to impose an import ban on Samsung phones and later struck $450 million from the verdict, saying the jurors miscalculated. The case is set for a rematch in appeals court.

Samsung is the world's largest maker of smartphones. Analysts estimate it outsold Apple nearly 2 to 1 in the first three months of the year. However, Apple's smartphone business is more profitable

The iPhone 4 was launched in 2010 and is the oldest iPhone still sold by Apple. The ITC ruling applied only to the AT&T (T) version of the phone. Apple is likely to retire the model.

Apple launched the iPad 2 in 2011. The ruling applies only to the version equipped with a cellular modem for AT&T's network.

The ruling also applies to older iPhones, though these are no longer sold by Apple.

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs