Apple 2.0

Covering the business that Steve Jobs built

What's going on with Apple and the ITC?

August 8, 2013: 9:28 AM ET

The U.S. International Trade Commission gets slapped down twice in one week.

Graham plow. Image: U.S. Farmer.

Graham Hoeme chisel plow. Image: U.S. Farmer.

FORTUNE -- In late 1940s, an inventor named William Graham solved the age-old problem of how to protect a plow cutting through rocky soil by adding shock absorbers to the plow's shanks. He applied for a patent, and it was granted in 1950. When John Deere (DE) incorporated the technology into its plows, Graham sued.

The case went all the way to the Supreme Court, which decided for Graham in a landmark ruling that established the legal criteria for an invention's "obviousness."

The Court held that obviousness should be determined by examining:

  • The scope and content of the prior art
  • The level of ordinary skill in the art
  • The differences between the claimed invention and the prior art, and
  • Objective evidence of nonobviousness.

As for the latter, the Court outlined examples of factors that show "objective evidence of nonobviousness." They are:

  • Commercial success
  • Long-felt but unsolved needs, and
  • The failure of others.

The so-called "Graham factors" played a leading role in the Federal Appeals Court's decision Wednesday to reverse, vacate and remand to another court the International Trade Commissions 2012 dismissal of an Apple (AAPL) complaint against Motorola Mobility -- now part of Google (GOOG). Apple claimed that Motorola had infringed two key smartphone patents -- patents that Apple has also asserted in its high-profile case against Samsung. They are

"We are troubled by the ITC's obviousness analysis," the appeals court wrote in a stinging repudiation of the ITC's work on the case. "We have repeatedly held that evidence relating to all four Graham factors -- including objective evidence of secondary considerations -- must be considered."

Those secondary considerations are the ones that anybody with eyes who has shopped for a mobile phone in the past six years can't miss seeing.

Namely, that Apple succeeded in building a commercially successful touchscreen smartphone where others had failed, and that once the iPhone proved its worth, competitors around the world rushed into the marketplace with devices that looked an awful lot like Apple's.

It was the second time in a week that the ITC was schooled by a higher authority for ruling against Apple. See How the ITC forced a veto in the Samsung-Apple patent case.

Link: Decided: Apple Inc. v. International Trade Commission and Motorola Mobility.

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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