Judge Wants Bond Posted for 88% of Samsung’s U.S. Smartphone Sales

In a blow to Samsung’s business in the U.S., an International Trade Commission (ITC) judge has recommended some harsh penalties stemming from the patent case it lost to Apple earlier this year. One of the penalties recommended includes a bond posted for 88% of the value of Samsung’s U.S. smartphone sales, but doesn’t end there.

According to FOSS Patents Judge made three recommendations (all of which are supported by the ITC panel:

  • 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), and
  • 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.

There are ways that Samsung can mitigate the damage that these sanctions will undoubtedly cause by exporting “designaround” devices that Samsung has developed and Apple has no issue with. So Samsung can send designaround versions of infringing products to the U.S., but there is even a wrinkle to that ray of hope for Samsung—the items still have to clear customs. This is where things, according to FOSS Patents, get even trickier. Samsung fears that U.S. Customs will delay allowing not just smartphones, music players, and tablets through, but all Samsung devices. Why? Because there is going to be a lot of confusion at Customs with infringing products that are banned, designaround products that are okay, and everything else that Samsung sells (TVs, laptops, DVD players, etc). Judge Pender could have provided guidance to Customs during the 60 day Presidential review period, but chose not to.

What does this all mean for Samsung?

Messy times ahead. These sanctions won’t crush their business by any stretch, but just keeping the accounting and shipping straight is going to be a logistical nightmare for Samsung. I would expect that Samsung products might start being in short supply as this customs and importation nightmare gets into full swing.

Via: FOSS Patents

Scales of Justice by mikecogh from Flickr.

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