ITC veto: protectionism or free-trade

Last August, The US Trade Representative (USTR), delegated authority by the Obama administration, vetoed an ITC ban on the importation of older iPhones and iPads into the United States market over a Samsung patent that was deemed standards-essential. This was the first veto of an ITC ruling in decades.

Many people, including The New York Times editorial board, a group of bipartisan Senators, and antitrust lawyers, advocated for the veto. To them, the ITC ruling was anticompetitive and would have set a precedent for owners of standards-essential patents to abuse the system with an overly aggressive ITC ruling. Unlike a case at a district court, decisions can be made relatively quickly at the ITC. The Obama administration recommended that the ITC standard for obtaining an injunction be changed.

However, since Samsung is a South Korean company and Apple is a US company, the decision can be seen as protectionism. Samsung and Korean news agencies suggested that it could be. Korea's leading newspaper wrote "this is effectively admitting that there was intense lobby within the U.S. political and business circles...the Obama administration's veto exercise makes outsiders to doubt Washington’s very commitment to free trade."

Then Apple won an import ban on older Samsung devices. The ITC ruled that Samsung violated Apple's patent on swiping a finger across the display of a device to unlock it. This time, the USTR did not veto the ban. Samsung alleged protectionism.

But is it protectionism? Florian Mueller called the allegations propaganda because "there's a difference between standard-essential patents (SEPs) such as the patent at issue in Samsung's offensive case and non-SEPs such as the ones underlying the import ban Apple won against Samsung".  He also claims that if a protectionist agenda existed, it could have been pursued earlier and with much greater force by having the Department of Justice investigate the standards-essential patents. The European Commission had issued a preliminary antitrust ruling that led to Samsung dropping its requests for sales bans on Apple products claimed to infringe its standards-essential patents.

I don't think it is protectionism. But if South Korea thinks so, then there may be harmful political repercussions regardless of whether protectionism was intended.

Today, Samsung is claiming that the veto was not broad enough to prevent another import ban, however.