US Federal Agency Bans Apple iPhones, iPads

The long-running patent dispute between Apple and Samsung took a surprise turn this week when a U.S. federal agency banned earlier models of the iPhone and iPad. However, an appeal court or the White House could block the ban.

The order doesn't come from a court, but rather the United States International Trade Commission (ITC), a semi-independent federal agency with some legal powers.

The ITC's job is to advise the government on trade issues. However, it does have some power to make rulings on unfair trade practices, such as alleged violations of trademarks and patents.

This week, the ITC ruled that Apple had violated Samsung's patents. The agency then ordered a ban on importing the Apple devices in question. The ban could have a serious impact on Apple business because iPads and iPhones are assembled overseas.

iPhone, iPad Imports Hit By Ban

The import ban affects iPhone models up to and including the iPhone 4, along with the original iPad and iPad 2. It's not yet known how many of these devices Apple has in stock and how quickly an import ban would start causing problems.

An ITC judge had initially rejected Samsung's claims that the devices violated its patents, but the commission has now overturned that ruling in what's called a "final determination".

The ruling is controversial because the patents cover technology relating to the 3G wireless standard used by many handheld devices. A general principle of patent rules says that firms holding a patent relating to a standard are required to license it to anyone who asks, charging a reasonable rate.

This means the legal dispute is not only about whether Apple violated the patent, but whether either side failed to negotiate a fair deal. (Source: reuters.com)

Presidential Review Could Overturn Ruling

Apple does have two options: first, it can appeal to a federal court. It has already indicated it will do so. It's not yet clear whether the ban would be put on hold pending such an appeal.

Second, the case could go to the White House for presidential input. Barack Obama would have 60 days to review the case and make a decision on the ban. (Source: theinquirer.net)

However, given the size of the two firms involved and the complexities of the case, it may be difficult for the Obama administration to take a stand on the matter.