An interesting collection of think tanks offered last week a rare consensual warning to a U.S. trade agency that banning a list of Samsung devices for sale over a patent infringement claim could have drastic consequences on the economy, public safety, health and welfare.
Public Knowledge, CTIA — The Wireless Association, the Latino Coalition, a former Department of Justice antitrust official, and others submitted opinions to the U.S. International Trade Commission (ITC) last week urging the agency not to ban the importation of popular Samsung smartphones and tablets in response to a complaint filed by graphics company Nvidia.
“An exclusion order on mobile phone devices could negatively impact United States consumers, and particularly their health, safety and welfare,” Public Knowledge said in comments submitted to the ITC last Friday. “This is because mobile Internet access is vitally important today— not merely for entertainment, but for healthcare, public participation, and essential communication.”
While Public Knowledge argued the ban would sever mobile Internet connectivity in poor and rural communities across the U.S. lacking broadband infrastructure, CTIA added it would have a hefty negative impact on the U.S. economy as a whole.
“The administration has made wireless broadband deployment a clear priority,” CTIA said in comments Monday. “As President Obama has stated, ‘[a]ccess to high-speed broadband is no longer a luxury; it is a necessity for American families, businesses, and consumers.’ Consistent with this recognition, the administration, the Federal Communications Commission and Congress have taken numerous steps to promote and streamline wireless broadband deployment.”
The groups, consistently at odds over high-profile issues like net neutrality, agreed Nvidia’s request for an import ban on Samsung handsets including the Galaxy S5, S4, Galaxy Note, and Note Edge, as well as some tablets, would decrease competition in the mobile device market and raise prices for consumers, potentially placing them out of reach for customers in poor communities.
“Wireless broadband is a huge driver of the U.S. economy, and the Samsung devices at issue in this case are an important part of that industry,” CTIA added.
Samsung devices made up more than 21 percent of the U.S. smartphone market in the second quarter of 2015 — the largest of any single manufacturer — according to the International Data Corporation.
That won’t be the case if Nvidia has their way. The U.S. graphics processing unit (GPU) company, which holds some 7,000 patents, filed a complaint with the ITC in February 2014 seeking a ban on Samsung devices using technology Nvidia claims it patented. Nvidia filed a lawsuit seeking financial damages against Samsung and Qualcomm the same day in a U.S. Federal Court in the District of Delaware.
Roslyn Layton, a visiting fellow at the American Enterprise Institute, recently described Nvidia’s request as the corporate equivalent of patent trolling, and said the California-based Nvidia is abusing the outdated patent litigation process and the ITC “as a form of brinkmanship to shakedown Samsung for higher licensing fees.”
Nvidia admitted it tried to come to an agreement on licensing with Samsung for two years before filing the suits, claiming Samsung delayed and shifted the responsibility to chip supplier Qualcomm.
Last month, ITC Judge Thomas Pender issued an initial finding that Samsung does not infringe on two of three Nvidia patents, and that a third was an obvious feature and as such, an invalid patent. The full commission will review and make a final determination in February.
If the commission does find infringement by Samsung, Pender said he would recommend the ITC issue a limited exclusion order over the infringing products named in the complaint, banning their importation, as well as a cease and desist order on violating Samsung products already in the U.S. (the judge said he would exempt Qualcomm from both orders).
Bret Swanson, a visiting fellow at the American Enterprise Institute, wrote earlier this summer such action “could plunge the U.S. mobile ecosystem into utter chaos.” And former New York City comptroller candidate John Burnett warned “consumers would find themselves disconnected from the Internet. Prices would likely rise, disproportionately harming low-income consumers.”
Upon completion of the filing period, the ITC will make a final ruling.