ARCHIVES: This is legacy content from before Marketing Dive acquired Mobile Marketer in early 2017. Some information, such as publication dates, may not have migrated over. Check out the new Marketing Dive site for the latest marketing news.

Samsung import ban presents no easy fix

If Samsung is expecting the White House to veto a new product ban just like it recently did for Apple, it could end up disappointed, and face significant marketplace issues.

The International Trade Commission recently ruled that Samsung violated two of Apple?s iPhone patents and must stop importing some of its products into the United States. While the White House overturned a similar product ban ordered by the ITC regarding Apple, in that case standard essential patents were at issue while in the Samsung case, it is accused of violating Apple?s proprietary patents.

?These are proprietary patents,? said Carl Howe, vice president of research and data sciences at Yankee Group, Boston. ?They are part of Apple?s patent advantage, I think that is more likely to go through and not be vetoed and therefore is more likely to have an effect on banning Samsung products.

?If that were to happen, clearly Samsung is going to have some issues,? he said. ?They can try to do some quick updates and take out the technology in question, make another appeal or do a licensing agreement with Apple.?

Proprietary patents
Apple and Samsung have been locked in an ongoing legal battle, with numerous suits brought by each accusing the other of patent infringement related to mobile technology.

Earlier this month, a U.S. trade representative in the Obama administration vetoed an ITC ruling ? the first such veto in more than 25 years ? that would have banned imports of older models of the iPhone that stemmed for patent infringement claims made by Samsung.

The way that patents are granted and enforced is a focus of the Obama administration, which has promised reforms intended to better control the number of patent-related lawsuits and address how the ITC handles such cases (see story).

However, because the latest findings relate to Apple?s proprietary patents, there is not the same level of concern.

The losing side
It is no coincidence that the legal battles between Samsung and Apple are happening at the same time that the mobile industry is growing quickly, as each company is determined to grab as big a piece of the pie as possible and both see legal actions as one way to accomplish their goals.

While Samsung has been on a winning streak when it comes to gaining market share, it has not been so fortunate on the legal front, a fact that could catch up with the company at some point. 

Samsung shipped two times more smartphones than Apple during the second quarter.

?Samsung has won no enforceable patents against Apple,? Mr. Howe said. ?They only one they won is a standard and essential patent in the Netherlands court that comes with a small penalty.

?In every other case, they have not been able to enforce any of its patents,? he said. ?Apple has won all of the cases that have gone to a final determination.?

Finding a workaround
Samsung has several options open to it for dealing with the ITC ban, including coming up with a workaround on the technology in question so it can continue to ship products in the U.S.

The patents in question address headphone jack and touch screen technologies. While a workaround might work for the former, it could prove challenging for latter.

?A lot of the multi-touch ones are going to be very hard to work around,? Mr. Howe said. ?I can?t see how you get around it.

?It is expected that every device will have multi-touch despite the fact that prior to 2007, nobody had multi-touch,? he said.

?If they don?t do a workaround, they face a substantial decrease in sales because they can?t sell the products in the U.S.

If Samsung cannot find a workaround, it could try licensing the technology from Apple.

However, it is not clear that Apple would be willing to license its patents to Samsung, as it is under no obligation to do so since these are not standard and essential patents.

?Apple could say no to licensing multi-touch technology, then the import ban sticks and Samsung will have to prove in court that it doesn?t use Apple patents,? Mr. Howe said.

?The assumption in the smartphone business is that it never gets to that point - people always settle. But that doesn?t always happen. We?ll see in this case.?

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York