An unexpected turn of events occurred last Saturday in the three-year legal battle saga between Samsung and Apple. Since 2011, the two digital giants have been engaged in more than 30 legal proceedings in more than a dozen jurisdictions worldwide claiming patent infringement. And now the plot thickens as the U.S. government enters the fray between the two private corporations.

So came the veto by the Obama administration of the United States International Trade Commission’s June ruling in favor of Samsung in which the U.S. federal agency banned imports of selected Apple products into the U.S. market. In its June decision, the USITC basically ruled that the Chinese-made Apple products infringed a Samsung patent. 

The highest echelon of the administration has now overturned this agency decision citing “effect on competitive conditions in the U.S. economy and the effect on U.S. consumers.” This intervention by the administration is the first time in 26 years, since 1987 during the Reagan administration.

The unexpected and unprecedented move by the U.S. government has started the talk of “creeping protectionism” on the way back. This immediate response is largely an emotional one with hardly any evidence, but the administration’s first-in-three-decades overturning of a USITC decision certainly gives a perception to outside watchers that the government is stepping in to preserve the interest of a key corporation. The political motivation is inescapably suspected. It is true that an overturn like this is entirely consistent with U.S. statutes. But what matters in this kind of situation is not the statutory consistency but rather the perception being created.

Perhaps with the danger of overstatement, this direct intervention by the government in otherwise purely legal disputes between the two private corporations could bring a small but ripple effect to the trade landscape. The Samsung-Apple litigation has drawn enough global attention for the past several years for many reasons, but it has been merely a company-to-company issue concerning contracts and intellectual property rights. The sudden intervention by the U.S. government and Korea’s quick registration of its concern the following day are now seemingly putting a new face on the dispute: There is an untoward potential of governments being drawn to the hitherto private dispute. For the two governments still occupied with all the complex homework, both domestically and toward each other, for the implementation of the 15-month-old bilateral FTA, this development will be far from being helpful.

Now consider how this latest decision would be viewed by other countries. Even if the decision is entirely legitimate and necessary for the United States, it might send the wrong signal to other countries that even America leans toward the protectionist tendency when a key domestic industry is concerned. Which would arguably embolden hesitating countries to explore ways to protect their domestic industries, and also prod domestic industries to look to their own governments for rescue measures of their choice. A downward spiral of race to the bottom to be stemming from such a phenomenon will deal a significant blow to the global effort to deter protectionism since 2008.

In the debate of protectionism, an argument that a domestic statutory basis exists for a measure or a decision hardly solves a problem. It would only induce other countries to invoke a similar provision if it already has one, and to enact a new one if it doesn’t. Then come, quite possibly, the escalation and tit-for-tat.

It is just ironic that a blunt and un-innovative method is being chosen to the rescue of the most innovative company in the world. As a Tale of Two Digital Giants turns a new twist, everyone is holding their breath. Stay tuned for the next episode. 


Lee Jae-min is a professor of law at the School of Law at Hanyang University. Formerly he practiced law as an associate attorney with Willkie Farr & Gallagher LLP. ― Ed.