Obama risks trade war to defend Apple's patent trolling

The US government is encouraging patent troll actions against foreign companies while protecting its own from any counter attacks.

It had been thought that President Barrack Obama would intervene to stop Apple winning a patent troll case against Samsung. He had already stepped in and stopped Apple products being banned in the US because they violated Samsung patents. At last this would mean an end to patent trolls trying to shut down their competition using the US International Trade Commission’s (ITC) power to block the import of products.

Yesterday Obama indicated that he would not stop a Samsung product ban in the US, which means that his move to defend Apple was nothing to do with squashing Patent Trolls, but the first shots in a trade war with South Korea.

Basically what Obama is saying is that it is OK for US companies, like Apple, to use patents to prevent rivals from trading in the US, but it is not OK for foreign companies, like Samsung to use its patents in self-defence.

US Trade Representative Michael Froman, said in a statement that after carefully weighing policy considerations, including the impact on consumers and competition, advice from agencies, and information from interested parties, he had decided to allow” the import ban.

Samsung can now seek a delay in the ban from a US appeals court that will consider the entire case on legal grounds, but the company must be in shock at the unfairness of it all.

It had asked Obama to overturn the ban ordered by the ITC on public policy grounds, which was the same relief the president gave Apple in August from an order barring imports of the iPhone 4S.

Obama now seems to be saying that the Samsung victory against Apple involved a patent on a basic function of mobile phones that was part of an industry wide standard, rather than features. This repeats the Apple defence case, which was rejected by the ITC. Obama said companies should be limited in their ability to use ownership of standard-essential patents to block competition.

Edward Black, president of the Computer & Communications Industry Association, a Washington trade group whose members include Samsung and Google told Bloomberg that the Apple import ban “was based on political pressure and favouritism”.

He warned that siding with an American company over a Korean one could have trade implications,

Froman’s office insisted that the nationality of the two companies “played no role in the review process”.

Samsung has a problem here. Obama has made it clear that Apple can sue it under trademark laws and troll it into the ground. Normally the tactic is to use your own patents to defend yourself.

However if Apple wins, Samsung will have to take products off the shelf, but if Samsung wins, it will have its mate Obama overturn the court case.

It will be interesting to see how the South Korean government responds to any complaints from Samsung. We would have thought a ban on the iPhone would be an appropriate minimum, followed by crippling tariffs on US owned imports to the country.

Either way, defending Apple will cost the Obama administration as foreign companies suddenly realise that they are not equal before US law.