In the high-stakes, high-tech battle for the minds, hearts, ears and fingertips of smartphone users, a little-known federal agency is playing an increasingly important role in determining which products make their way to shelves throughout Pennsylvania and the country.
The International Trade Commission (ITC) is a quasi-judicial agency that monitors the impact of imports on the U.S. economy. The ITC works to ensure that U.S. industries aren’t subject to unfair foreign competition, such as imported products that infringe upon patented intellectual property, for instance.
The Commission has become a popular forum for technology companies alleging competitors’ patent infringement for several reasons. ITC cases are generally resolved quicker than federal court proceedings. Supreme Court precedent doesn’t directly apply to the ITC.
And most importantly, while the agency does not have the power to grant monetary rewards to aggrieved parties, it can issue “exclusion orders” — bans on the importation of certain products that run afoul of U.S. trade law.
Over the summer, the ITC issued an import ban on certain older iPhone and iPad products, ruling that they had infringed upon several patents held by Samsung. In early August, the Obama administration took the rare but not unprecedented step of vetoing that exclusion order within the prescribed 60-day presidential review period.
Almost immediately afterwards, the ITC issued a ruling in a separate case — this time saddling Samsung with an import ban on several of its older devices. In this latter case, the review period will end on October 8.
For the sake of fairness to a global company that has made immense contributions to the American economy, as Samsung has, and to maintain a semblance of consistency in the U.S. approach to intellectual property, the Obama administration should veto this current exclusion order.
But the profound importance of this issue extends beyond this particular ITC ruling.
For one thing, the U.S. reputation as a model of robust competition hangs in the balance. How can we credibly seek to break down trade barriers elsewhere — or ask other nations to preserve U.S. intellectual property — if home-grown agencies like the ITC don’t offer the same protection?
Indeed, here at home, it is essential that consumers pick the winners and losers in the marketplace, rather than having so many of their choices made for them in courtrooms.
Import bans limit choices
Allowing import ban after import ban to pile up will reduce the number of products available to consumers, as well as stifle competition and the innovations that fuel it.
Moreover, the current environment breeds uncertainty in the global marketplace, which then trickles down to local consumers and retailers as companies shift more resources toward patent defense efforts and less into research and innovation.
That many of the products subject to these import bans impact older — and generally less expensive — products actually heightens the problem. In underserved rural and urban places alike, consumers depend on healthy competition to keep prices low, and affordable products on the shelves. Without them, too many people will find themselves priced out of the market and without a valuable tool for connecting to the Internet, doing homework and honing digital literacy skills.
When it comes to smartphone competition, we need fewer trials and more transparency. Continuing to escalate the ITC patent volleys will only serve the companies involved. A system more fueled by competition is a better long-term strategy for benefiting the most important people in this whole transaction — the consumers on the other end of the line.
Edward J. Black is the President & CEO of the Computer and Communications Industry Association. He is a graduate of Muhlenberg College in Allentown.