IPR: Apple vs. Samsung – The weakness of essential (part v)

It may seem unfair, but the White House has done the technology industry and the patent system a favour.

• The White House’s decision to veto the ITC imposed trade injunction on Apple for infringement of Samsung’s patents comes as a big surprise.
• Historically, it is almost unheard of for the White House to veto an ITC imposed injunction and I did not expect it to in this case.
• I am certain that Samsung will be screaming that the White House has been biased against in favour of an American company but the White House has a good reason.
• This reason for this is simple: Samsung sought and won injunctive relief on the back of Standard Essential Patents.
• Standard Essential Patents are patents that must be infringed in order to implement a standard such as LTE of WCDMA.
• Because the technology of a SEP is essential to make the technology function, not implementing that technology will cause the technology not to work.
• This gives the holder of that technology great power as he can hold everyone else who is using that technology to ransom as without his patent, it won’t work.
• This is why to be included in a technology standard; the holder of that patent must agree to license his technology in a free, reasonable and non-discriminatory manner (FRAND).
• A SEP holder is also NOT supposed to seek injunctive relief as this is deemed to be a breach of the FRAND principle. (see here)
• This is why the White House has vetoed this injunction and why I believe that has been right to do so.
• This will set a substantial precedent as many other parties seeking injunctive relief for SEPs will probably now withdraw their applications.
• While this is a big blow for Samsung in its campaign against Apple, it is a good development for the patent system.
• Technology companies waste huge amounts of time and resources in fighting off patent assertions which are often made with SEPs as they are the easiest with which to show infringement.
• Now that this route has been all but closed off, one can be hopeful that abuse of the patent system will now begin to decline.
• This will effectively reduce the number of countries in the West which are friendly to SEP based injunctions to one (Germany) and this move could start to change things there too.
• For Samsung, this is a big blow but it is just another round of the painfully expensive and pointless tit for tat that is its war against Apple.
• At the end of the day I expect that Samsung and Apple will reach a settlement and in that settlement there is likely to be a net royalty stream from Samsung to Apple.
• I believe that paying royalties to Apple would probably be cheaper than its current legal expenses.
• This is not a real negative for Samsung, but it has negative implications for the lawyers, who to date, have been the only real winners from the endless litigation we have seen in the technology industry over the last several years.