[A2k] FT: Apple import veto risks undermining patent protection push

Thiru Balasubramaniam thiru at keionline.org
Sun Aug 4 22:43:43 PDT 2013


<SNIP>

“If open technology standards benefiting the public interest are the rule
for smart phones, why not for life-saving pharmaceuticals? Why not for
other innovations that would improve the lives of billions of people around
the world?,” asks Adam Hersh, an economist at the left-leaning Center for
American Progress.


“The decision shows the untenability of stringent IPRs to which so many US
trading partners have objected on social welfare grounds. The onus is now
on [Mr] Froman to explain why this is good for American consumers, but not
for the rest of the world,” Mr Hersh added.

--

August 4, 2013 6:02 pm

Apple import veto risks undermining patent protection push

By James Politi in Washington and Richard Waters in Los Angeles

President Barack Obama’s move to overturn a looming import
ban<http://www.ft.com/intl/cms/s/0/7321bf0a-fc6b-11e2-95fc-00144feabdc0.html>
on
older iPhone and iPad models – favouring
Apple<http://markets.ft.com/tearsheets/performance.asp?s=us:AAPL>
 over Samsung<http://markets.ft.com/tearsheets/performance.asp?s=kr:A005930> in
a long-running legal battle – risks undermining the US administration’s
aggressive push for stricter intellectual property regimes around the world.


The office of the US trade representative announced the decision on
Saturday, reversing a ruling by the International Trade Commission, a
government agency which in June had found that Apple had infringed a
Samsung technology patent.


Michael Froman, USTR, said the
veto<http://www.ustr.gov/sites/default/files/08032013%20Letter_1.PDF>
by
the White House – the first of its kind by a president since 1987 – came
after a review of “the effect on competitive conditions in the US economy
and their effect on US consumers”.


The decision – which allows Apple to keep selling cheaper versions of the
iPhone4 and iPad2 in the US – is striking because it comes as the US has
embarked on a big push to tighten rules on patents in global trade
negotiations.


“I think it’s likely the decision will be used as an excuse by other
countries that don’t want strong patent enforcement,” said Bill Reinsch,
president of the National Foreign Trade Council, a business lobby group
that champions trade liberalisation. “The circumstances are different - in
particular, the US has employed an extensive legal process, and Samsung can
continue to pursue the matter in court - but other countries are likely to
ignore the differences,” Mr Reinsch said.


The US is pushing for tougher intellectual property rules in regional trade
talks with 11 other Pacific Rim countries known as the Trans Pacific
Partnership, but also in bilateral discussions with large emerging market
nations including China and India where US business has complained about
lax protection of IP rights.


Some of the leading US technology companies are worried that Washington’s
support of Apple could hurt their own interests around the world. It would
be seen in China and elsewhere as an excuse to disregard US intellectual
property rules, warned


Horacio Gutierrez, chief patent attorney at Microsoft, who was speaking in
the run-up to this weekend’s decision.


Ron Cass, a former vice-chairman of the ITC, said that overturning the
agency’s ruling would “come to be seen as a mistake – it undermines
protection for intellectual property.”


The action would only have been justified if the technology was key to
national security or the country’s communications infrastructure, he said.
“The least justifiable time to intervene is when you have two commercial
players who are direct competitors fighting over standard consumer
products.”


In response, a US official on Sunday pointed to a section of Mr Froman’s
statement on Saturday. “The administration is committed to promoting
innovation and economic progress, including through providing adequate and
effective protection and enforcement of intellectual property rights,” Mr
Froman wrote.


Some intellectual property experts in Washington said they did not believe
the Apple import ban veto by Mr Obama would have a big impact. “Given how
egregious IP theft is many other nations and how central it to their
industrial strategies, I don’t believe that the administration’s action
will have significant negative effects on our efforts to get these nations
to respect intellectual property rights,” said Rob Atkinson, president of
the Information Technology and Innovation
Foundation<http://www.itif.org/people/robert-d-atkinson>
.


But critics of the Obama administration’s approach to intellectual property
in trade negotiations say the White House’s case has grown weaker and lacks
consistency.


“If open technology standards benefiting the public interest are the rule
for smart phones, why not for life-saving pharmaceuticals? Why not for
other innovations that would improve the lives of billions of people around
the world?,” asks Adam Hersh, an economist at the left-leaning Center for
American Progress.


“The decision shows the untenability of stringent IPRs to which so many US
trading partners have objected on social welfare grounds. The onus is now
on [Mr] Froman to explain why this is good for American consumers, but not
for the rest of the world,” Mr Hersh added.


Meanwhile, some in Washington were concerned about the message the Apple
decision sent on foreign investment.


“US and international patent laws play a critical role in global
competition. However, it is crucial to ensure that the president’s
prerogative is used when the merits of the case warrant, and not to simply
advantage a US company over a foreign competitor,” said Nancy McLernon,
president of the Organization for International Investment, which
represents US subsidiaries of foreign companies, including Samsung.


The Obama administration’s move to side with Apple comes little more than
two months after the smartphone giant faced heavy
scrutiny<http://www.ft.com/intl/cms/s/0/c1a2383a-c228-11e2-ab66-00144feab7de.html>
on
Capitol Hill over its tax structure – in particular its use of subsidiaries
in Ireland to minimise its global tax bill. But the attacks on Apple were
largely confined to the Senate subcommittee that investigated the tech
group, and the White House refrained from criticism of a company that is
seen as a beacon of US innovation.



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