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The commerce department’s decision capped a year-long investigation to look at whether Chinese silicon solar cell makers have received financial and other help from the Chinese government that gave them an unfair advantage over rivals, and whether they have been selling products at prices that are less than their production costs or less than what they sell in their home market. The complaint, filed last October, came from a group of solar cell and panel makers led by SolarWorld. The tariffs are meant to counter the effects of the unfair government subsidies and pricing practices.

Solar cells from Suntech Power, the world’s largest solar cell and panel maker, will be hit with a 31.73 percent anti-dumping duty, which is a slight increase from the preliminary tariff of 31.14 percent that the commerce department issued in May. Trina Solar’s cells will face 18.32 percent opposed to 31.22 percent. Other solar cell makers that asked the commerce to hand out specific tariffs will get 25.96 percent instead of 31.18 percent. The rest of the Chinese manufacturers will face 249.96 percent, the same as the preliminary tariff. But the amount that these companies or their importers will fork over will be lowered by 10.54 percentage points in order to avoid double-counting an export subsidy, the commerce department said.

The commerce department significantly upped the anti-subsidy tariffs, however. Its preliminary tariffs, handed down in March this year, were less than 5 percent for all Chinese solar cell makers. But its final decision has increased that from 2.9 percent to 14.78 percent for Suntech, 4.73 percent to 15.97 percent for Trina, and 3.59 percent to 15.24 percent for all the rest.

Overall, the final decision gave Suntech a slightly higher combined rate, and the same for companies that didn’t ask for specific tariffs. Trina and those who asked for individual tariffs, such as Yingli Green Energy, now face lower combined rates.

Suntech, which already is reeling from a financial fraud in Italy, saw its founder stepped down as CEO in August. Earlier this week, Suntech announced plans to reduce production and other steps to reduce its costs.

Both the anti-dumping and anti-subsidy tariffs apply only to silicon solar cells made in China. Silicon solar cells are the dominant form of solar cell and panel production and and Chinese manufacturers have squeezed out rivals in Europe, Japan and the United States in recent years. The tariffs would be paid by whoever are the “importers of record,” and that could be the manufacturers themselves or their customers.

SolarWorld was hoping that the commerce department would impose tariffs on Chinese solar panels as well, but the commerce department didn’t budge. Adding solar panels would’ve inflicted a greater pain on the Chinese companies, many of which sidestepped the preliminary tariffs by using solar cells from countries such as Taiwan and assembling the cells into panels in China.

SolarWorld, which is based in Germany and runs a factory in Oregon, said previously that tariffs are necessary to help American manufactures stay competitive and in business. The other side, which includes not only Chinese manufacturers but also project developers and equipment retailers that have benefited from cheaper solar panels, warned of rising installation costs and severe job losses. As we pointed out last week, neither prediction has come true so far since the preliminary tariffs went into effect.

In fact, solar panel prices have continued to fall because of other global economic market forces at work. The biggest factor: supply and demand remains out of whack for the global solar market. The glut began to show its impact and push down solar panel prices in early 2011, and its presence still lingers. Chinese manufacturers have continued to suffer big financial losses, along with their rivals in Europe, Japan and the U.S. After building up a big solar manufacturing base and export business, the Chinese government now is reportedly working on rescuing some of the biggest solar manufacturers and forcing a consolidation.

But lower panel prices have benefited project developers and installers. The U.S. market for solar panel installations is forecast to grow 71 percent in 2012 from the previous year.

The commerce’s decision isn’t the end of the trade case though. The U.S. International Trade Commission is investigating the same complaint, and it’s set to decide whether Chinese manufacturers’ actions have hurt American manufacturers. The final decision on the tariffs by the commerce department will be in effect only if the trade commission finds that American manufacturers have suffered harm. The commission, which did find harm in a preliminary decision last December, is set to issue its final decision on Nov. 7.

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The company stated in a press release that it had filed suit in federal court in its home town of Rochester, New York and that it had also commenced proceedings at the International Trade Commission, a federal body that can ban imports if they infringe US patents.

The patents in question are related to technology for transmitting images. Kodak says Apple’s iPad and iPhone are using this technology as are HTC’s smart phones and tablets.

The timing of the suit is curious in that Kodak’s patent portfolio has been a hot issue for months. Analysts have said selling or licensing the patents may be the 131-year company’s only hope of effecting a turnaround after years of decline. The new lawsuits will not produce any cash in the near future as patent proceedings typically take years. Today’s announcement may therefore a way to show the strength of the portfolio to potential buyers or it may be a threat to other companies using imaging technology to pay a licensing fee to Kodak.

In a separate announcement today, the company said it was implementing a management shake-up and cost-cutting measures (via Bloomberg). Kodak is rumored to be preparing a bankruptcy filing for early February that would permit it to shed debt and restructure.

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HTC CEO Peter Chou said on Tuesday the company already has a workaround ready for the feature found to be in violation of Apple’s patent by the U.S. trade regulatory body. According to Chou, the feature has already been removed from its phones following the ruling on Monday. The feature in question is something most smartphone users have come to expect — for example, the ability to recognize phone numbers or addresses in a note or email, then open the relevant application when that data is tapped — so while working around the issue has immediate benefits for HTC, it might also have negative lasting impact.

Google Mobile SVP Andy Rubin said during a news conference with Chou that the ruling was actually a good one for Android, since it dealt with a feature that wasn’t necessarily instrumental to the OS, but was instead a “user interface feature of an application,” leading him to believe “patent peace on the overall platform” is still an achievable goal.

While it appears true that in this case HTC will be able to continue selling its devices in the U.S. after the April 19, 2012 deadline set by the ITC for the import ban, Apple’s win still isn’t exactly as inconsequential as Rubin and Chou would like to make it out to be. The average user might not take immediate notice of the feature’s absence, but if Apple continues to win these concessions (and should competing manufacturers be forced to use its suggested design guidelines through patent cases like the recent one in Australia, for example), user experience on platforms like Android could degrade considerably.

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HTC is a major provider of cell phones to the US market, supplying popular devices like the Windows 7 Phone and the Droid Incredible.

The order will not go into effect until April 19 and is subject to Presidential veto. The ITC, citing a concern for competitive conditions, said it was delaying the ban until April to provide a transition period for US carriers.

The trade body also acknowledged consumer concerns, and ruled that “HTC may import refurbished handsets to be provided to consumers as replacements under warranty” until December of 2013.

For its part, HTC didn’t appear too worried about meeting the standard set by the judge. “”We are gratified that the Commission affirmed the judge’s initial determination on the ’721 and ’983 patents, and reversed its decision on the ’263 patent and partially on the ’647 patent. We are very pleased with the determination and we respect it. However, the ’647 patent is a small UI experience and HTC will completely remove it from all of our phones soon,” said Grace Lei, general counsel of HTC, in a statement.

In its ruling, senior ITC officials affirmed an administrative law judge’s ruling that HTC violated tariff laws by importing a product that violates one of Apple’s patents.

The administrative judge had ruled that HTC violated two of four patents that Apple had asserted against it, but the ITC today pared back the finding and said only one of the patents violated Apple’s technology. The patent in question was granted in 1999 and describes (roughly) a method for a computer program to fetch information from another application. The patent can be seen here.

The dispute is part of a global battle for market share in which cell phone giants are increasingly using patents as a tactic to keep drive rivals’ out of their market. Critics says many of these patents were issued at a time of lax standards at the US Patent Office and that they are of questionable value.

Even though it does not have the power to award monetary damages, the ITC has become a popular forum for patent disputes because it has the power to ban imports and because it has a reputation for being quicker than the court system.

Apple is also suing HTC over the same patents in Delaware federal court. Today’s finding by the ITC does not necessarily determine the outcome of that litigation.

The ban will go into place automatically unless President Obama exercises his power to veto it in the next 60 days. A presidential decision to override an ITC import ban is very rare and is reported to have occurred only five times in recent years.

The ruling was a political hot potato for the ITC which twice delayed its decision as consumers and the phone industry watched closely. The final outcome benefits Apple but the ruling appears designed in such a way that HTC will have time to redesign phones that infringe the patent without creating major inconvenience to consumers and carriers, as noted above.

A summary from the ITC’s order and a copy of the order are posted below:

Notice is hereby given that the U.S. International Trade Commission has found a violation of section 337 in this investigation and has issued a limited exclusion order prohibiting importation of infringing personal data and mobile communications devices and related software. The Commission has determined that exclusion of articles subject to this order shall commence on
April 19, 2012.

ITC order banning HTC imports
var docstoc_docid=”109101657″;var docstoc_title=”ITC order banning HTC imports”;var docstoc_urltitle=”ITC order banning HTC imports”;

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Update 2: One more delay for HTC at the ITC: the decision has now been postponed once more until December 19, according to this report in Reuters and citing HTC itself. The ITC has not yet posted a notice about this second extension. Meanwhile, HTC has also looking to go to court elsewhere, in a suit against investment bank Citi in Taiwan for a breach of securities law, contributing to a fall in its stock; that suit was first filed back in August. [original post follows]

Last Friday Apple (NSDQ: AAPL) saw a setback in its multinational fight against alleged patent infringements by Android when it was denied an injunction on Samsung’s Android devices in a U.S. Federal Court; this week will see one more big case that will once again test how watertight Apple’s claims are in a legal sphere. The International Trade Commission is due to rule tomorrow, December 6, next week on a case between Apple and Android device-maker HTC over more patent infringements — making it the first of Apple’s many ongoing cases to reach a final verdict.

If the ITC rules in Apple’s favor, we could see a ban on the import of smartphones and tablets from HTC into the U.S. That would be a huge setback for the company, considering that HTC in Q3 was the largest smartphone company in the U.S. in terms of smartphone sales, according to Canalys.

That would be in contrast to the decision from last week, in which Apple was denied its request for an injunction on Samsung tablets in the U.S. Although Samsung ranks as the biggest overall mobile device company in the U.S., its tablets have made little headway into a market largely dominated by Apple’s iPad — meaning an injunction would have likely been more of a public relations disaster rather than have an immediate affect on Samsung’s bottom line for tablet sales.

HTC last year made about $5 billion in sales in the U.S., more than half of its overall revenue, according to statements it filed in relation to another patent complaint, and reported by Bloomberg.

Bloomberg also notes that if an injunction does get put in place, it might not apply to 4G devices: currently HTC accounts for more than half of the 4G phones sold in the U.S.; banning these would have too big an impact on the supply of those devices in the market. That would not be the case for smartphones, with multiple suppliers and platforms serving American consumers with products.

At question in the HTC/Apple case are four patents. One involves the ability to dial numbers directly from emails, while another covers data transmission. An agency judge earlier ruled that the other two patents were not infringed, but it seems that the ITC will still be able to weigh these up in its evaluation.

Ultimately (as with many of the other suits going down worldwide), a ruling in Apple or HTC’s favor will most of all impact the terms of licensing negotiations between the two companies.

The ITC dealt HTC a blow the other week when it ruled that Apple did not infringe on patents owned by S3 Graphics. HTC is in the process of acquiring S3, which it was buying for about $300 million, in part for the patent protection that the company could have given it against Apple. After the ruling, HTC released a statement admitting it was re-evaluating that purchase.

Other Android-related cases being investigated by the ITC at the moment include cases against Motorola (NYSE: MMI) Mobility and Barnes & Noble (NYSE: BKS) from Microsoft (NSDQ: MSFT), as well as cases brought by Apple also against Motorola Mobility as well as Samsung.

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The commission’s decision is preliminary and sets the stage for more investigations into the case, which was filed by a coalition of seven silicon cell and panel makers in the U.S. in October. The U.S. arm of the Germany-based SolarWorld has been the public face of the Coalition for American Solar Manufacturing, which hasn’t divulged the identity of the rest of the six manufactures. The complaint kicked off a storm of opposition and a flurry of press release from both sides as they gained supporters and geared up for the fight.

The SolarWorld-led coalition contends Chinese solar cell and panel makers have set unfairly low prices in order to nudge competitors out of the way. The coalition also alleged the Chinese government’s hefty financial support for its solar manufacturers, something the government should’ve disclosed fully but didn’t, has hurt the U.S. industry. The coalition says it wants the U.S. government to impose duties on imported Chinese cells and panels to offset the impact of Chinese subsidies and the pricing practices of Chinese manufacturers.

The commission’s role is to determine whether the U.S. solar industry has indeed been harm by the alleged actions, and it will do so in preliminary and final phases of its investigation. The Friday vote was the preliminary one, and it cleared the way for the U.S. Commerce Department to review the case. The commerce department’s role is to determine whether there has been a dumping of unfairly priced Chinese solar cells and panels and what the penalties, in the form of the duties, should be imposed on Chinese goods.

The commerce department is scheduled to reach a preliminary vote on the two questions early next year, and if it finds there have been unfair practices, then it will continue to its final phase of the investigation. Both the commission and the commerce department have to find harm and determine there was anti-dumping in order to slap duties, Peg O’Laughlin, a spokeswoman for the commission, told us.

The coming battle

Both sides will have more opportunities to influence the decisions of both authorities. Ever since the coalition filed its complaint, it’s been touting the growing number of solar companies that have supported its cause. On Friday, it also trumpeted the number of federal lawmakers who have sided with them: There are 59 members of the House and Senate, all of them Democrats.

In response to the complaint, a group of 25 manufacturers and installers formed the Coalition for Affordable Solar Energy last month and argued  the complaint would stymie healthy competition and lead to higher solar energy prices and slow down market growth. It, too, has been lining up supporters. Among the 25 members are silicon producer MEMC Electronic Material and its project development arm, SunEdison, SolarCity, Sungevity, SunRun and Chinese solar panel makers Suntech Power, Trina Solar and Yingli Green Energy.

“The entire solar industry has worked extremely hard to reduce the costs in the last five years. (The complaint) will defeat all the advancements we’ve made in this industry,” said Lyndon Rive, CEO of SolarCity, during an interview this week.

The anger toward Chinese manufactures has grown this year as the global solar industry suffers from producing way too many goods than the market demands. The primary causes are changes in government incentives and the weak financial market in Europe: the largest solar market.  A buildup of unused solar panels in warehouses has caused prices to plummet by 30-40 percent, and that in turn prompted some manufacturers to sell at a loss.

The failing of Solyndra and the bankruptcies filed by SpectraWatt and Evergreen Solar earlier this year also have fanned resentment toward China, even though SolarWorld and its coalition began working on their petitions before Solyndra’s failing became known.

To complicate the dispute, China has weighed in. The Chinese government announced its own probe into whether U.S. policies and subsidies have “promoted trade barriers.” That, in turn, prompted some Chinese solar companies to emphasize that they really, really don’t want any trade war on either side of the Pacific.

Photo courtesy of Suntech Power

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The ITC’s Office of Unfair Import Investigations (OUII) released a report Friday (brought to our attention by FOSS Patents’ Florian Mueller) that dismisses allegations made by Google and T-Mobile that a U.S. ban on the sale of HTC Android devices would be against the public interest. Those two companies made headlines when they came to HTC’s defense in the ongoing ITC review of a decision it rendered earlier this year when it found HTC did infringe on two of 10 Apple patents.

The OUII said in its statement that it is “unaware of any public interest concerns that would preclude issuance of the exclusion order proposed by OUII in this investigation.” The ITC organization claims that since “the public interest favors the protection of U.S. intellectual property rights by excluding infringing imports,” and since “there is no evidence that U.S. demand for the accused products cannot be met by numerous other entities, including [Apple] or its licensees,” any ban on HTC devices found to infringe on Apple patents would indeed not be counter to the public interest.

The OUII’s statement in favor of Apple in this case for the reasons cited above could have far-reaching consequences, according to Mueller, since, he points out, “there are other ITC cases going on with respect to Android, including the investigations of Apple’s and Microsoft’s complaints against Motorola Mobility  and Apple’s complaint against Samsung.”

Both parties await the final decision pending review of the initial decision against HTC, which is tentatively due on Dec. 6, 2011. If the decision goes in Apple’s favor, it will be a major victory for the iPhone maker, and a significant setback for Google as it tries to build up more patent protection for the OS.

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The complaint lists Apple’s iPhone 3G, iPhone 3GS, iPhone 4, iPod touch, iPad and iPad 2, and RIM’s Blackberry Curve 9330 and Blackberry PlayBook as infringing on five Openwave patents. Those are, according to Openwave:

• Patent that generally allows a user to use e-mail applications on a mobile device when the network is unavailable – such as when a user is on an airplane.
• Patent that generally allows the mobile device to operate seamlessly, and securely, with a server over a wireless network.
• Patent that generally allows access to updated versions of applications on mobile devices.
• Patent that generally allows consumers to experience an improved user experience in navigating through various pages of information without delay.
• Patent that enables data in the cloud to be accessed or shared by different devices such as mobile handsets or computers.

The suit asks the ITC to bar the import and sale of the accused devices. In a statement, Openwave CEO Ken Denman said it ultimately wants licensing fees for the technology:

Openwave invented technologies that became foundational to the mobile Internet. We believe that these large companies should pay us for the use of our technologies, particularly in light of the substantial revenue these companies have earned from devices that use our intellectual property. Before filing these complaints, we approached both of these companies numerous times in an attempt to negotiate a license of our technology with them and did not receive a substantive response.

Neither Apple or RIM were immediately available for comment.

Thumbnail courtesy of Flickr user The.Comedian

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It shows Apple is keeping up the pressure on Android manufacturers and is intent on pursuing its claims, even in the face of setbacks. The ITC staff recently recommended denying Apple’s first complaint against HTC, though a final ruling is expected Aug. 5. The ITC has 30 days to decide whether to investigate Apple’s latest complaint.

The latest skirmish raises the stakes for HTC in particular and Android manufacturers in general. This is, according to patent expert Florian Mueller, the 48th lawsuit or complaint against an Android maker and there’s little sign that the claims won’t keep coming. As we’ve discussed recently, there is a full court press on against Android being pushed by companies like Apple, Microsoft and Oracle that could have serious implications on Android if the separate intellectual property claims start to pile up.

The dispute between Apple and HTC has taken on a new dimension with HTC’s announced purchase of S3 Graphics. The ITC determined that Apple infringes on patents owned by S3, which helps improve HTC’s previously weaker IP standing. HTC has also countered Apple’s complaint last year with a case of its own with the ITC that sought to ban iPhone, iPad and iPod touch sales. But with HTC releasing more devices, including the Flyer tablet, it has given Apple another chance to assert new patent claims against the Taiwanese manufacturer.

Apple may be giving up on its first complaint and is hoping to do more damage with a second case against HTC. Or it could be that Apple needs to keep up the pressure in light of the S3 ruling. But either way, it means the patents wars show no signs of letting up, and Apple in particular could be ramping up to go after more Android makers.

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