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Expert: Apple and Samsung's Battle Is a 'Pointless Tit for Tat'

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After an ITC ruling in favor of a Samsung patent, and without the president stepping in today, AT&T will be unable to import iPhone 4s. Will it matter?

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Two months ago, the US International Trade Commission ruled that Apple (NASDAQ:AAPL), in two versions of the iPhone and two versions of the iPad, had infringed on a Samsung (OTCMKTS:SSNLF) patent, and began the process of banning the devices in the United States. President Obama and US Trade Representative Michael Froman had a 60-day window after the ruling to overturn the potential ban before the ITC's final ruling. If the president does not overturn the ruling by the end of today, it is likely that AT&T (NYSE:T) versions of the iPhone 4, iPhone 3GS, iPad 3G, and iPad 2 3G will no longer be able to be imported to the US from manufacturers in China.

The patent in question protects an apparatus for encoding and decoding information in a CDMA mobile communication system, meaning the ruling only affects Apple devices whose chipsets were supplied by Infineon (OTCMKTS:IFNNY), and not those supplied by Qualcomm (NASDAQ:QCOM).

Fortunately for Apple and AT&T, the devices involved in this dispute are fairly old. The iPhone 3GS and the iPad 3G have both been discontinued; it is likely that with the arrival of new models this fall, the iPhone 4 and the iPad 2 3G will be retired as well.

Although the sales of older models at lower price points are still somewhat important in the smartphone market, the potential loss of sales is not seen as the most pressing an issue here.

So what's all the fuss about? In a plea to the ITC, Apple said that the ban would "sweep away an entire segment of Apple's product offerings." Moreover, major tech companies like Microsoft (NASDAQ:MSFT), Oracle (NASDAQ:ORCL), and Intel (NASDAQ:INTC) have come to the support of Apple and AT&T, urging the US government to overturn the ITC's ban. They believe the problem isn't so much the limiting of sales of a few older devices but that the ruling sets a dangerous precedent.

Moreover, what makes this particular legal dispute notable is not so much the technology involved, or even the companies involved, but the kind of patent: It's called a standard essential patent (SEP).

Tech companies are required to offer competitors FRAND (fair, reasonable, and non-discriminatory) licensing at reasonable rates. Apple and its strong lineup of supporters fear that the ITC ruling will allow companies like Samsung, which hold SEPs, to take advantage of their competitors by increasing licensing fees. Standards making bodies such as the European Telecommunications Standards Institute (ETSI), which is the one involved in this case, must ensure that different devices from different companies are able to work together. Major tech companies propose engineering solutions and ETSI chooses the best one, though often the approaches are equally well-designed, and so the decision is arbitrary.

Samsung's patent in question is an SEP patent, which means its not very different from Apple's own technology -- yet Apple has to pay a licensing fee and use Samsung's technology, or face having its devices banned. Obviously, the company chose to not honor the SEP with its iPhone 4.

AT&T has said that the ITC ruling completely eliminates a popular entry-level phone from its stock, and that it is "inconsistent with the president's goal of ubiquitous broadband deployment."

So will President Obama speak up?
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