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Strange Bedfellows Back Apple as iPhone 4 Ban Looms

Strange Bedfellows Back Apple as iPhone 4 Ban Looms
July 29, 2013 1:55PM

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Analysts predict that a ban on the iPhone 4 would not only hurt competition but could result in $1 billion in lost revenue for Apple. The ban is based on "standard essential" patents, and Apple has agreed to pay a "reasonable" licensing fee to Samsung. But the two companies have failed to agree on price. The ITC believes Apple is avoiding the fee and so proposed the ban.

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With the patent wars raging on between Apple and Samsung, other tech companies have stepped in defend Apple as it faces a looming iPhone 4 ban set in place by the International Trade Commission.

In June, the ITC decided that some Apple devices including the iPhone 4 and select 3G iPads infringed upon a Samsung cellular data patent. This ruling came with an order to prevent Apple from selling any more of those devices in the United States. Now that Apple has appealed the ITC's decision, President Obama has final say over the case.

The ITC's ruling will go into effect Sunday unless U.S. Trade Representative Michael Froman vetoes the decision on behalf of the Obama Administration.

Unlikely Supporters

It is not often that Microsoft, Oracle, and Intel all come forward to publicly support a company like Apple, which has been one of Microsoft's largest competitors. But in this instance they have reason.

"Supporting Apple makes sense," said independent tech analyst Jeff Kagan. "Some day each of them may need similar support, and it's good to see it's still there."

The Business Software Alliance prides itself as being the "leading advocate for the global software industry before governments and in the international marketplace." Part of its work involves opening markets and standing up for fair competition. A lack of fair competition appears to be its reason for involvement in the Samsung vs. Apple case.

AT&T and Verizon have also involved themselves in the case. In an open letter last week, Verizon asked the president to intervene, even though the ban only affects the iPhone 4 on AT&T and T-Mobile. AT&T said the ITC ban was "inconsistent with the president's goal of ubiquitous broadband deployment."

Apple's Troubles

There is no way to consider Apple innocent in the patent war, especially after it was first to file multiple intellectual-property lawsuits against Samsung and Google.

Analysts predict that a ban on the iPhone 4 would not only hurt competition but could result in $1 billion in lost revenue for Apple. Since the ban is based on "standard essential" patents, the idea that any device using the technology could be banned seems foolish to many companies.

Although Apple has put up a fight against the ITC's ruling, it has also agreed to pay a "reasonable" licensing fee to prevent the ban from going into effect. But Samsung and Apple have failed to come to terms on the price.

Samsung has even made statements to suggest that its case against Apple was a form of payback because of Apple's lawsuits against Samsung. According to a company statement provided to The Wall Street Journal, "Samsung has never offensively used its patents, essential or not, to keep competitors out of the market."

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