The International Trade Commission Raises Stakes In Apple-Samsung Cold War

The threat of nuclear deterrence and mutually assured destruction have kept countries like the United Statea, China and Russia (including the former Soviet Union) from blowing each other to smithereens for the last 60 years or so. 

Too bad mutually assured destruction does not seem to work between Apple and Samsung.

The global patent battle between the two mobile manufacturing behemoths is not getting any simpler. The U.S. International Trade Commission (ITC) is now getting involved an old decision made by a trade judge in September that said that Apple did not impinge on four specific patents that Samsung had accused of iPhone maker of infringing on in a suit filed in June 2011. The ITC will review the case and the trade judge’s assertions and issue a final verdict on the case in January 2013.

Could iPhone Imports Be Banned?

The decision by the ITC to step into the prior ruling is not really a surprise. The ITC loves to stick its nose in just about everything these days, especially when it comes to patent arguments between large mobile manufacturers that could affect imports of the devices. The key thing to know is that when the ITC gets involved there is a danger of infringing devices receiving import bans (at least temporarily). 

If the ITC rules in favor of Samsung there is a possibility that certain Apple devices, like the iPhone 3GS, 4, 4S, iPad 2 and the iPod would face import bans into the United States. Granted, those are all older Apple products, but the company has increasingly relied on its long tail of products to penetrate the lower end of the smartphone and tablet market. For instance, when Apple released the new, fourth-generation iPad earlier this month, it discontinued the “newer” third-generation iPad while keeping the iPad 2 on the market at a discounted price. The same goes for the iPhones 4/4S, which Apple relies on to serve consumers at the bottom of the smartphone market. 

Global Patent Mess

The global patent systems is a large, convoluted web of lawsuits and injunctions, trials and settlements. Apple recently reached a settlement with HTC on a 10-year agreement where Apple would not sue HTC or request ITC injunctions while HTC will pay Apple a licensing fee. A similar agreement may be reached between Apple and Motorola, and Microsoft already has design and patent agreements with Cupertino. But Apple and Samsung have both said they are not willing to settle with each other. 

Confused yet? It is very difficult to keep up with the blow-by-blow of the global patent battles, especially between the two smartphone superpowers: Samsung and Apple.

Mutually Assured Destruction?

To put it in Cold War terms, Apple and Samsung represent the U.S. and the Soviet Union as superpowers with spheres of influence spanning the globe. Instead of nuclear weapons, the deterrents are patents. The role of the United Nations (which is supposed to keep the peace and determine fair practices worldwide) is filled by the ITC and global courts.

But that's as far the analogy goes. Unlike the U.N., the ITC has become an active player along with the superpowers - determining if the patents will be successful in blocking devices from reaching the market. 

The danger here is that, instead of preventing mutually assured destruction between Apple and Samsung, the ITC will enable it. For instance, what if the ITC rules on four specific patents in one case in favor of Apple and then in favor of Samsung in another? Would that create an import ban on both companies? It might seem far-fetched, but it is a distinct possibility. 

No Winners In This War

Who loses in all of this? Well, as in nuclear war, pretty much everybody.

Samsung and Apple investors, innovators, application developers are all losers if Apple and Samsung are able to use patents to block each other's products. n the various patent cases. Most of all, though, consumers get the short end of the stick.

Heading into this holiday shopping season, the competitive smartphone market has created a stunning selection of amazingly powerful devices for consumers looking for new smartphones and tablets. The patent system, the ITC and the global war between the manufacturers threatens that choice.