iPads banned as agency says Apple infringed Samsung patent

Sales of older iPhones, iPads banned as agency says Apple infringed Samsung patent

By Cecilia Kang,

A U.S. trade agency on Tuesday banned the sale of several iPhone and iPad models for infringing a Samsung patent, dealing a high-profile setback to Apple’s crusade against copycats.

If upheld, the ruling would show that at least some of Apple’s iconic technology duplicated that of its primary competitor in the mobile-device market, an embarrassment for a company that has held itself up as the source of Silicon Valley’s most groundbreaking innovations. Samsung, once a bit player in the cellphone market, now sells more smartphones than Apple around the world.

The order by the U.S. International Trade Commission (ITC) would block sales of several older devices that work on ATandT Wireless’s network, including the iPhone 4, the iPhone 3GS and the iPad 2 3G. Apple’s newest offerings, the iPhone 5 and the fourth-generation iPad, were not affected.

Unless President Obama issues a veto, the ruling will take effect in 60 days. Apple said it will appeal the decision to federal courts.

Apple and Samsung have been entangled in myriad cases making their way through courts around the world. The legal battles were initiated by Apple, which has been determined to prove that Samsung and others copied the iPhone, from the curved shape of the casing to the way contact lists were displayed.

Last year, Apple won a lawsuit in a federal court that ruled Samsung had infringed several Apple patents.

Separately, Apple and Samsung filed dueling lawsuits in 2011 at the ITC, which has become a preferred venue for patent disputes among companies because the body can rule quickly and has the authority to ban imports or sales.

Carolina Milanesi, a consumer devices analyst for Gartner, said the ITC ruling’s damage to Apple may be more from a publicity standpoint, since the order applies only to older models. The iPhone 4, she said, does not sell as well in the United States as Apple’s newer 4S and 5 models.

But the decision comes at a bad time for Apple, whose stock has taken a hit in recent months. Some analysts have said the company has lost its innovative edge to Samsung, Google and other rivals.

Meanwhile, Apple has become embroiled in a tax controversy in Washington after a Senate investigation found that it shielded tens of billions of dollars from U.S. taxes. In New York, it is facing a lawsuit filed by the Justice Department, which is accusing the firm of fixing prices for e-books.

“This adds to all the being down on Apple that we’ve seen recently,” Milanesi said. “But it’s a blow they can take on the chin.”

The commission said Apple “failed to prove an affirmative defense” against Samsung’s allegations. The ruling reversed an earlier opinion by an ITC judge that Apple had infringed a Samsung cellular data patent used in ATandT models.

Regulators and lawmakers have criticized the ITC, arguing that monetary damages are better than outright sales bans. Still, vetoes of its rulings are rare. The last president to do so was Ronald Reagan, according to the ITC.

The decision “has confirmed Apple’s history of free-riding on Samsung’s technological inno­vations,” Samsung spokesman Adam Yates said in a statement.

To Apple, the battles are more about principle than potential business losses. Apple chief executive Tim Cook has said Apple has a clean reputation as a global business leader and will fight to protect its name.

“We are disappointed that the Commission has overturned an earlier ruling and we plan to appeal,” Apple spokeswoman Kristin Huguet said in a statement.

Analysts said the ruling was significant for Samsung.

“This decision is a major surprise,” said Florian Mueller, a patent expert and blogger on the site FOSS Patents. “Samsung’s track record in asserting patents against Apple has been rather dismal.”



Katerina Sokou, Hayley Tsukayama and Timothy B. Lee contributed to this report

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