Reversal of Apple ban a ‘setback for Samsung’

The US decision to overturn an import ban on Apple’s older iPhones and iPads may help short-term sales and hobble Samsung Electronics in any settlement talks in the companies’ patent fight.

President Barack Obama’s administration, in issuing the reprieve to Apple on Saturday, lets the firm continue selling the iPhone 4, which is priced lower than newer models, said Brian Marshall, an analyst at ISI Group.

Less expensive smartphones are selling more quickly than higher-priced models, he said.

The ruling is a setback for Samsung, which had won the import ban against Apple from the US International Trade Commission (ITC) in June based on a patent widely used in the mobile-device industry for transmitting data.

The US drew a line between blocking the sale of products infringing patents that are part of industry standards versus those for unique features.

The decision will handicap Samsung’s ability to obtain higher technology licensing fees from Apple in any negotiations, said Susan Kohn Ross, a trade lawyer&.

“If Samsung had been successful in getting the exclusion order, it would put more pressure on Apple,” she said.

The decision by US trade representative Michael Froman, designated by Obama to review the case, could limit the ability of large patent-holding companies to rely on royalty revenue from standards patents used in smartphone chips or sound transmission.

“The problem now for Samsung is not that Apple can continue to sell its products, but whether Samsung’s products will be banned,” said Lee Sun Tae, a Seoul-based analyst at NH Investment & Securities.

South Korea’s ministry of trade said it is “concerned” about the overturning of the Apple ban.

While Samsung couldn’t get an import ban, it is entitled to seek cash compensation in federal court, Froman said.

“The administration’s action sends the right message,” Federal Trade Commission chair Edith Ramirez said. “Firms should not be able to use an ITC exclusion order to do an end-run around” commitment to license a standard patent on fair and reasonable terms.