White House Upholds U.S. Ban On Certain Samsung Devices

Samsung has lost its bid to get the Obama administration to veto an import ban on some of its mobile devices, following a patent dispute with Apple AAPL -1.38%. Just to rub salt into the wounds, the administration overturned a similar ban against Apple’s iPhone 4S in August.
A U.S. trade representative said today that the ban will go into effect, “after carefully weighing policy considerations, including the impact on consumer and competition.”

The ban relates to a number of older, Samsung mobile devices that were found to violate patents that had ben filed by Apple. These patents covered the technique for touchscreen control on mobile devices and the audio input-output plug, and Apple won the ban through the International Trade Commission. It affects a range of Samsung devices, including the Galaxy S 4G smartphone released in 2011 and the Galaxy Tab.

Samsung had filed an appeal to the U.S. Trade Representative, saying in an open letter that “the world is watching how Samsung is traded by the United States in this ‘smartphone war.’ The administration has a significant interest in avoiding the perception of favoritism and protectionism towards U.S. companies.”

It’s been argued that while Samsung has called for a similar u-turn to the one granted to Apple, Apple’s ban was overturned because the patents at issue covered differentiating features. Samsung’s related to industry standards that the company was required to license under fair use. While differentiating features could be worked around, standards could not.

Samsung is expected to report record profits for its third quarter, and analysts say that’s largely thanks to a rebound in its semiconductor business. The company’s mobile device division makes up two-thirds of its earnings, but analysts have been warning that the market for high-end, high-margin smartphones is saturating and sales of the company’s flagship Galaxy S4 smartphone are at risk of slowing.

The silver lining for Samsung today is that the ruling relates to relatively old devices, and Samsung is best known for its ability to iterate quickly with new products.

The full statement from U.S. trade representative Michael Froman:

On August 9, the USITC determined that Samsung (SSNLF) had violated Section 337 of the Tariff Act of 1930, as amended, in the importation of certain devices that infringe claims of two patents owned by Apple (AAPL). Based on this determination, the USITC issued a limited exclusion order prohibiting the unlicensed importation of infringing devices manufactured for or on behalf of Samsung.

The Commission also issued a cease and desist order that prevents Samsung from engaging in certain activities, such as sale of these products in the United States. Froman said, “After carefully weighing policy considerations, including the impact on consumers and competition, advice from agencies, and information from interested parties, I have decided to allow the Commission’s determination in Certain Electronic Digital Media Devices and Components Thereof, Investigation No. 337-TA-796, to become final.