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Schwab Decision on the ITC Investigation of Certain Processor Chips

August 06, 2007


WASHINGTON, DC.  - Today, the United States Trade Representative, Susan C. Schwab, announced her decision on the results of the Administration’s review of the remedial orders issued in the U.S. International Trade Commission’s (USITC) investigation of Certain Baseband Processor Chips.

                          Statement of the U.S. Trade Representative

Regarding the Determination of the United States International Trade Commission in the Matter of Certain Baseband Processor Chips and Chipsets, Transmitter and Receiver (Radio) Chips, Power Control Chips, and Products Containing Same, Including Cellular Telephone Handsets, Investigation No. 337‑TA‑543

Since 1974, the U.S. International Trade Commission’s (USITC) orders issued pursuant to section 337 of the Tariff Act of 1930 have been allowed to enter into effect unless there have been compelling policy reasons for disapproval.  This practice is based on the legislative intent of section 337, which is to provide a timely trade remedy against entry of unfair imports that infringe U.S. patents, copyrights, and trademarks, while taking into account policy concerns of an exceptional nature. 

This Administration remains committed to advancing innovation and economic progress.  Consistent with that policy, ensuring adequate and effective protection of intellectual property rights, including enforcement of such rights at the U.S. border through orders issued under section 337, is an important national interest.  At the same time, safeguarding the public safety and encouraging the development and use of new technology are also critical functions of the government.

In this case, after carefully weighing these considerations, advice from agencies, and information received from interested parties, I have decided to permit the limited exclusion order and cease and desist order (the “orders”) that the USITC issued in its investigation Certain Baseband Processor Chips and Chipsets, Transmitter and Receiver (Radio) Chips, Power Control Chips, and Products Containing Same, Including Cellular Telephone Handsets, Investigation No. 337‑TA‑543, to become final.  In declining to disapprove these orders, I am continuing the practice of successive Administrations of exercising section 337 review authority with restraint, reserving for extraordinary cases the power to disapprove the findings and orders of the USITC.

U.S. agencies have carefully reviewed the potential policy implications of the USITC’s limited exclusion order, including its potential impact on public safety and other effects of that order.  We have provided opportunities for affected parties to provide their views on the effects of these orders on various national policy considerations set out in the legislative history to section 337, including the effect on public health and welfare, competitive conditions in the U.S. economy, and on U.S. consumers.  During the policy review of the USITC orders, senior officials in the Office of the U.S. Trade Representative, and the Departments of Homeland Security, Commerce, State, Treasury, Transportation, Defense, and Justice, as well as other agencies, spent considerable effort in evaluating the orders’ scope and potential impact.

While we recognize legitimate concerns that certain market participants and others have expressed regarding the potential effects of these orders, we believe that steps are being taken to address those concerns.  We have consulted closely with the Department of Homeland Security (DHS) and other public safety agencies.  After extensive review, DHS has advised that it does not believe there are public safety risks sufficient to justify disapproval of the USITC’s limited exclusion order.  DHS has also advised that Broadcom Corporation’s offer of royalty-free public safety licensing to state and local public safety organizations and its licensing agreements with two major wireless carriers will ameliorate to a significant degree concerns regarding the order’s potential effect on public safety wireless broadband systems and 3G network deployment.  We also understand that other market participants are investigating the use of a non-infringing software work-around.  We believe that such licensing agreements and work-arounds will address in large part the concerns raised about delay in 3G network deployment.  

In enforcing the limited exclusion order, I urge U.S. Customs and Border Protection to develop and apply procedures that would minimize the burden on importers of downstream products and non-infringing products.