Samsung May Have to Post An 88% Bond On U.S. Smartphone Sales

| December 29, 2012 | 9 Replies

Patent Wars Android Headlines Lawsuit 3 Apple Samsung

It appears that the October 24, 2012 ITC ruling by Administrative Law Judge Thomas B. Pender which asserted that Samsung had infringed on for of Apple’s patents could be far worse for Samsung than originally thought. If Judge Pender’s determination and recommendation, which went public yesterday in the ITC’s electronic document system, is accepted completely by the US trade agency, then Samsung will be hit with some very serious sanctions.

  • A U.S. import ban that would enter into effect after the 60-day Presidential review period following a final ITC decision
  • A simultaneous cease-and-desist order that would prohibit the sale of any commercially significant quantities of the imported infringing accused products in the United States (this remedy was denied against HTC)
  • The requirement to post a bond of 88% of the value of all mobile phones, 32.5% of the value of all media players, and 37.6% of the value of all tablet computers found to infringe Apple’s patents-in-suit during the Presidential review period.

Judge Pender went along with just about everything Apple had suggested with regards to rates based on a “price differential analysis”, rather than Samsung’s suggestion of a 4.9% royalty rate. The ITC says that the 88% rate is correct because there is such a large price differential between the companies’ products. Even though the ITC doesn’t see the lower costing Samsung phones in direct competition, Pender’s decision says that an internal Samsung memo stating the U.S. mobile phone market was a “two horse race” between the companies, proves they were trying to undercut Apple’s devices. Judge Pender at one point even went so far as to tell Samsung he’d recommend a bond rate of 100% if they continued to press for the different rates.

Luckily for Samsung these are only recommendations. On top of that Pender also approved of some minor design changes that allowed for Samsung to avoid infringing on Apple even more. That means for now Samsung is safe to freely import their products to the U.S. without penalty. However if Judge Pender’s recommendations are accepted by the ITC, Samsung may have to pay the bond even on devices that have the approved design changes. Samsung fears that this may cause shipments to be held up in customs which would affect products not even included in the lawsuit like televisions, cameras, etc., so they are now asking that customs receive “special guidance” with regards to these products.

…And so the patent infringement beat goes on.

Category: Android News

About Joe Levin ()

Joe is a Boston based Android reporter his current devices include The Nexus 4 & The Nexus 7
  • Michael Richardson aka Rainabb

    If this was imposed, I would personally head up the greatest movement against the ITC and Apple ever even imagined. It would be all out war.

  • Marc MacDonald

    This is absolutely ridiculous. I would honestly love for Apple, or anyone for that matter, to explain to me how half of those patents make even the tiniest bit of sense in terms of being patentable. That something as absurd as this is actually being suggested now, is just going way too damn far. Apple is being very, very anticompetitive the last several years, and seeing that two similar cases (this and Samsung’s case against them) are being treated so differently shows a very clear bias towards the US company. I refuse to buy i-devices because they are crap compared to the competition, but their business practices make it clear that supporting them would be stupid as well.

  • nothingness99

    This is ridiculous!!!!!

  • caleb

    If a ban happens, expect the black market to surge by 100%
    Not that it will, there are some serious consequences for ITC and Apple if it does though. But I don’t think they want to bury themselves.

  • caleb

    I can just see China taking the imports and selling them online anyways, after that there’s nothing ITC can do, except suggesting to congress that we go to war with the infidels. This can do nothing but harm, and I think they should consider what they might be getting themselves into before they get caught with their pants down. But then again, I would totally laugh at that.

  • Alan Ng

    So stupid..

  • Hst

    I give apple 5-10 years and they will be done due to the way of there business practices,

  • srksaurabh srivastav

    Apple Just can’t admit that Android is more popular than iOS. Yes, its true that iOS is more secure. But, what about customizability on that ground Android is more superior.You can customize every tiny part of Android………

  • John Smith

    I love it how the US are the only ones ruling in favor of apple, everywhere else has ruled in favor of of Samsung and have even punished apple for giving Samsung bad publicity.