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Slamming the Door on Sharp

June 26, 2009 | Author: Ibex Marketing

On Wednesday, the U.S. International Trade Commission (ITC) issued a “limited exclusion order” which effectively blocks the import of certain LCD panels and LCD TVs made by Sharp because the company had violated a patent held by Samsung. The ITC started its investigation of Samsung’s original complaint in January 2008, nearly a year and a half ago. At face value, the order appears to say that Sharp cannot import or sell any of these products. In practice, however, it will likely be business as usual, at least for the near future. As is the normal procedure, the decision includes a provision for a Presidential review. Pending a decision by President Obama, Sharp will likely continue to import and sell its LCD panels and TVs.

So what’s the point of this decision if it doesn’t stop Sharp from selling its products in this country? I checked with a patent litigator at McKenna Long & Aldridge LLP. According to the MLA attorney, the President (which in this case really means the United States Trade Representative who will advise Obama) has 60 days to make a decision about the order, which he has the authority to override on policy grounds if he chooses. On the other hand, if the President takes no action, then the order becomes enforceable. Until then, Sharp is allowed to import and sell its products as usual. Moreover, the ITC has decided not to require any additional bond during the Presidential review period.

So what’s going to happen next? Is Best Buy going to have to start pulling Aquos HDTVs from its shelves? Nobody knows for certain at this point, but apparently a separate complaint by Sharp against Samsung for patent infringment is also making its way through the ITC. One possible outcome is that the two companies will come to some sort of a cross-licensing agreement for their patents, and they both will continue to have access to the United States consumer market. As always, stay tuned….