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Apple continues to lose patent cases. Their solution: rewrite the rules.| GuyWhoKnowsThings


Over the past decade, some of Apple's biggest regulatory headaches have come from a little-known federal agency called the United States International Trade Commission. The agency's patent judges have found Apple guilty of appropriating innovations in smartphones, semiconductors and smart watches. And recently, they forced him Apple will remove a health feature from Apple Watches.

Now the tech giant is fighting back. As it defends itself against patent complaints before the ITC, Apple has begun lobbying lawmakers to help rewrite the agency's rules.

The company has been campaigning throughout Washington for legislation that would make some patent owners ineligible to file complaints with the ITC. He has tried to influence language in committee reports that could affect how the agency levels punishments. And he has increased his lobbying power by recruiting one of the agency's former commissioners.

The lobbying effort comes as Apple is embroiled in a years-long legal battle with two American medical device makers over Apple Watch technology. The companies, AliveCor and Fieldsfiled complaints at the ITC against Apple in 2021 for appropriating innovations they had developed to measure the electrical activity of the heart and oxygen levels in people's blood.

After losing both cases, Apple This year it eliminated the technology to measure blood oxygen on their watches, which infringed Masimo's patent. He is appealing the ITC decision. A similar punishment is on hold while court proceedings related to the case continue. ITC's conclusion that Apple infringed AliveCor innovations with the electrocardiogram function of the Apple Watch.

Apple is trying to mitigate the agency's signature power. Unlike traditional patent courts, where juries or judges typically impose fines, ITC judges can discipline a company that infringes a patent by banning imports of the infringing product.

Since Apple manufactures all of its exclusive devices abroad, blocking the import of its devices would be dangerous for the company. To avoid that penalty in the future, the company says, it wants the agency to put the public interest of a product before a ban. The company is betting that the court will give more credence to Apple's argument that Americans would be harmed by an import ban because they would lose access to the communication and health features of iPhones and Apple Watches.

An Apple spokeswoman said existing law requires the ITC to consider how the public interest could be affected before ordering an import ban. but she said public data showed that the agency had conducted public interest assessments in only one-fifth of the cases it had heard since 2010. As a result, your lobbyists have been talking with the White House and congressional leaders about the ITC, as well as other issues such as privacy and domestic manufacturing.

Adam Mossoff, a patent law expert and professor at George Mason University, said Apple was misinterpreting the law, which requires the ITC to block a product if it finds it infringes a patent. An import ban is only supposed to be lifted if there is a proven threat to health or safety, he said. Blocking sales of an Apple device would not be harmful.

“The problem with their lobbying is that they are trying to neutralize a well-functioning court by closing its doors to Americans whose rights have been infringed,” he said.

When Congress created what became the ITC in 1916, it wanted to protect American innovation by allowing the U.S. government to ban the importation of products with stolen technology. But as manufacturing moved overseas, the federal agency's court system became a forum for disputes between American companies.

ITC judges, who are appointed by the commission, hold hearings with different standards for patent disputes than those governing district court cases. The cases are fast and compressed and can culminate in the judge punishing a patent abuser by blocking his products.

Before a ban goes into effect, a company found guilty can appeal to the White House for a pardon. But it is rare for an administration, which oversees the agency, to go against a judge's recommendation.

Apple has become the preeminent example of how ICT can be used. Because the company makes almost all of its products abroad, judges who found it guilty of infringing patents on smartphones, semiconductors and smart watches say it should be punished by blocking the import of iPhones, iPads and Apple Watches.

Apple has largely escaped import bans. In 2013, the The Obama administration vetoed The ITC's plan to block iPhone imports after the agency determined that Apple had infringed one of Samsung's smartphone patents. In 2019, Apple agreed to pay a royalty to Qualcomm for some wireless technology patents, avoiding an ITC ruling that could have blocked iPhone sales. And after losing the Masimo case, Apple agreed to remove the offending health feature to circumvent the Apple Watch ban.

For years, Apple avoided the kind of lobbying common at a large corporation. It maintained a small office in Washington with a few people and employed only one lobbying firm, two people familiar with the company's practices said. But as regulatory challenges for his business have increased, his policy team has expanded to include dozens of people and 11 lobbying firms.

Faced with patent complaints from AliveCor and Masimo, Apple's team in Washington prioritized lobbying to change the ITC. In 2022, it began working with the ITC Modernization Alliance, a loose-knit coalition of companies that includes Samsung, Intel, Dell. , Google, Verizon and Comcast. The group worked with members of Congress while drafting the Advancing America's Interests Act in 2019 and supported its reintroduction in 2023.

Supporters of the bill — Reps. David Schweikert, R-Ariz., and Donald S. Beyer Jr., D-Va. — have promoted it as a way to curb abuse of the ITC by patent trolls. It would prohibit patent holders from suing unless they have made a product using the patented technology or have already licensed it to someone else.

AliveCor and Masimo are medical companies that have focused on selling products to healthcare providers and consumers rather than licensing innovations to consumer technology companies like Apple.

Last year, Apple lobbyists filed three reports revealing that it had campaigned for the bill, according to Open Secrets, a nonprofit that researches campaign finance. It also increased its lobby ranks with Hiring Deanna Tanner Okunan ex president of the ICC who works for him Polsinelli law firm. (The hiring was previously reported by political.)

The lobbying campaign coincided with an effort to argue in Washington that an ITC ban on Apple Watch imports would deprive people of a device that was crucial to their health, two people familiar with the lobbying said.

In addition to directly lobbying on the legislation, Apple worked with a member of Congress to include language on page 97 of a committee report for the 2024 Appropriations Bill, said Rep. Ken Buck, a Colorado Republican. The language would require the ITC to review how it determined a product's value to the public before suggesting a ban and report to Congress on that process.

“To me, this bypassed the legitimate process,” said Buck, who is leaving Congress this month. He told Rep. Thomas Massie, a Kentucky Republican who sits on the Rules Committee, that he had 10 votes and would block the bill unless the language was removed. Massie's office confirmed that the language had been removed at Buck's request, but he declined further comment.

An Apple spokeswoman disagreed with Buck's claims that his lobbying circumvented the legitimate legislative process. She said his public federal lobbying reports detailed how he worked on issues important to his products and clients.

The spokesperson also noted the Senate's approval of a committee report with a phrase expressing support for the ITC to conduct a thorough analysis of the public health implications of a product ban before issuing one, which is what Apple wants in the future.


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