US ITC will review Apple, Samsung patent decision

WASHINGTON Tue Nov 20, 2012 10:49am IST

An employee poses as he holds Apple's iPhone 4s (L) and Samsung's Galaxy S III at a store in Seoul August 24, 2012. REUTERS/Lee Jae-Won

An employee poses as he holds Apple's iPhone 4s (L) and Samsung's Galaxy S III at a store in Seoul August 24, 2012.

Credit: Reuters/Lee Jae-Won

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WASHINGTON (Reuters) - The U.S. International Trade Commission will review a judge's decision which found that Apple (AAPL.O) did not violate patents owned by Samsung Electronics (005930.KS) in making the iPod touch, iPhone and iPad.

An administrative law judge at the ITC had said in a preliminary ruling in September that Apple was innocent of violating the patents. The ITC, which could have opted to simply uphold the judge's decision, said that it would take up the matter. A final decision is expected in January.

If Apple is found to infringe, its devices can be banned for sale in the United States.

Apple and Samsung have taken their bruising patent disputes to some 10 countries as they vie for market share in the booming mobile industry.

Apple won a huge victory in August when a U.S. jury found the South Korean firm had copied key features of the iPhone. Apple was awarded $1.05 billion in damages. That ruling is under appeal.

In its announcement that it would review the case, the ITC asked for briefings on how it should consider standard essential patents, which are normally expected to be licensed widely and on fair, reasonable and non-discriminatory terms. The use of standards helps companies ensure devices are interoperable.

Some antitrust enforcers have argued that it is wrong for companies which own standard essential patents to ask for infringing devices to be barred from the country except in extreme instances.

The commission is reviewing a decision by ITC Judge James Gildea, who said in September that Apple did not violate the four patents at issue in the case, which was filed in mid-2011.

The two standard essential patents in the complaint are related to 3G wireless technology and the format of data packets for high-speed transmission.

Apple has a parallel complaint filed against Samsung at the ITC, accusing Samsung, a major Apple chip provider as well as a global rival, of blatantly copying its iPhones and iPads. An ITC judge said in that case that Samsung infringed on four Apple patents. The full ITC will issue a final decision in February.

Apple has waged an international patent war since 2010 as it seeks to limit growth of Google's (GOOG.O) Android system. The fight has embroiled Samsung, HTC and others who use Android.

Google's Android software, which Apple's late founder Steve Jobs denounced as a "stolen product," has become the world's No. 1 smartphone operating system.

Samsung is the world's largest smartphone maker, while Apple is in third place. Many experts consider Samsung's Galaxy touchscreen tablets the main rival to the iPad, although they are currently a distant second to Apple's devices.

Samsung is also a parts supplier to Apple, producing micro processors, flat screens and memory chips - both dynamic random access memory (DRAM) chips and NAND memory chips - for the iPhone, iPad and iPod. Apple has reduced orders from Samsung for chips and screens.

The case at the International Trade Commission is No. 337-794. (Reporting By Diane Bartz; Editing by Bernard Orr and David Gregorio)

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