Apple asks for stay on ITC ban on iPhone and iPad models pending appeal

Apple has asked the U.S. International Trade Commission to stay a ban on certain iPhone and iPad models pending an appeal.

The ban could come into effect on Aug. 5 after a 60-days review period during which U.S. President Barack Obama can veto the order.

If the orders go into effect, Apple will lose not only sales of its iPhone 4 and iPad 2 3G GSM products but also the opportunity to gain new smartphone and tablet customers who otherwise would have purchased the entry-level Apple devices, it said in a filing Monday to the ITC. The company has appealed the ITC order in the U.S. Court of Appeals for the Federal Circuit.

Whereas other major handset and tablet manufacturers make and market a large number of new devices each year, Apple’s business model is to typically introduce only one new phone and one new tablet, and at most only a few new phones or tablets in any given year, it added.

The orders “will sweep away an entire segment of Apple’s product offerings,” Apple said. Carriers who use GSM are also likely to be affected in a competitive market, it added in the filing which which was redacted in some parts.

The ITC ruled on June 4 that Apple infringed a Samsung Electronics patent, and passed an “exclusionary order” that would ban the import of AT&T models of the iPhone 4, iPhone 3GS, iPhone 3, iPad 3G and iPad 2 3G.

The ITC found that Samsung did not prove that three other of its patents were violated by Apple. The violating patent covers apparatus and method for encoding and decoding of mobile communications.

As Samsung declared the patent to be standard-essential, it could not reasonably expect to exclude others “from practising its claimed invention,” Apple said in the filing. If the stay is granted and the Commission’s final determination is affirmed on appeal, Samsung can then seek FRAND (fair, reasonable, and non-discriminatory) royalties through a patent infringement suit that it has already initiated in the District of Delaware, it added.

Apple noted in its filing that it is not aware of any investigation in which the Commission has stayed enforcement of an exclusion order. The order in the current case differs from those in other investigations because they arise from “a declared-essential patent that the patent owner has promised to license on FRAND terms,” it said.

Pending law would block Tesla sales in New York

Elon Musk and Tesla are battling dealership associations throughout the country for the right to sell vehicles directly to customers.

Tesla said in a statement Friday that if the bill passes, it will be "put out of business in New York," with all employees in the state losing their jobs.

"The bottom line for New York consumers and New York suppliers is that if this bill passes, special interests in Albany will once again have gotten their way while robbing New Yorkers of choices in the marketplace," Tesla (TSLA) said.

The current legislative session was originally scheduled to conclude on Thursday, but work continued in both the Senate and Assembly on Friday, and it is unclear when it will end.

Related: Tesla unveils 90-second battery-pack swap

CEO Elon Musk took to Twitter Friday as legislators were considering the bill, urging New Yorkers to call their representatives and ask them to vote it down.

The New York State Automobile Dealers Association did not respond to a request for comment, though the association is also urging supporters to contact their representatives, saying the pending bill is "designed to maintain the health and vitality of New York's retail automobile industry."

Tesla has tangled with dealership associations in a number of states in its effort to sell its Model S electric sedan directly to consumers rather than using franchised car dealers.

General Motors (GM, Fortune 500), Ford (F, Fortune 500), Toyota (TM) and others don't sell cars to customers. They sell to independently owned and operated dealers or distributors who, in turn, sell them to the public, usually after some negotiation over the final price.

Tesla's showrooms, by contrast, are owned and operated by the company. Most are in shopping malls, with only enough cars on hand for display and test drives. Every Tesla car sells at full sticker price, and service on the cars is performed at separate garages owned by Tesla.



Auto sales are mostly regulated at the state level. In some states, Tesla has had little or no problem opening its stores. In others, auto dealers and their allies in government have resisted Tesla's plans, fearing they could ultimately undermine the system of franchised dealers.

Earlier this month, legislators in Texas failed to vote on a bill backed by Tesla that would have loosened the state's restriction on dealerships owned by automakers. Virginia rejected the electric-car maker's dealership application earlier this year.

Dealers argue that the traditional franchise system is best for car buyers because it preserves competition between dealerships selling the same products.

But Tesla worries that traditional franchised dealers, who also have gasoline cars to sell, won't represent its products properly or aggressively enough. Dealers pressed to make quick sales will likely be tempted to steer customers to gasoline cars rather than explain the benefits of the Model S, Diarmuid O'Connell, Tesla's vice president for business development, told CNNMoney last month.

"From the beginning, Tesla's goal has been to catalyze the market for electric vehicles, and selling through intermediaries at this stage of the company will not work," Tesla said Friday.