December 5, 2022
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`VIA EDIS
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`The Honorable Katherine Hiner
`Acting Secretary
`U.S. International Trade Commission
`500 E Street SW, Room 112-A
`Washington DC 20436
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`Re:
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`Certain Location-Sharing Systems, Related Software, Components Thereof, and Products
`Containing Same, ITC Docket No. 337-3655
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`Dear Acting Secretary Hiner:
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`Pursuant to the Commission’s Notice of Receipt of Complaint and Solicitation of Comments Relating
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`to the Public Interest (87 Fed Reg 72,509-10 (November 25, 2022)), I submit the following comments on
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`behalf of proposed Respondents Samsung Electronics Co., Ltd. and Samsung Electronics America, Inc.1 The
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`Complaint filed by Advanced Ground Information Systems Inc. and AGIS Software Development LLC
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`(collectively, “AGIS”) requests relief that could harm public health and welfare, consumers, and competitive
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`conditions in the United States. Accordingly, the ITC would benefit from assigning a Staff Attorney as a
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`party to the investigation to represent the public. Should the ITC delegate public interest to the
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`Administrative Law Judge, Samsung requests that it direct the ALJ to hear public interest independently
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`from violation.
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`When amending the Rules of Procedure and Practice to accommodate early public interest
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`statements, the ITC stated the purpose was “ensuring the completeness of the record with respect to the
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`required analysis concerning the public interest under Sections 337(d)(1) and (f)(1).” 76 Fed Reg 64,803
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`(Oct. 19, 2011). Rather than ensuring a complete record, public interest delegation often produces the
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`1 In addition to Samsung, AGIS also named the following as Proposed Respondents: Google LLC; OnePlus Technology
`(Shenzhen) Co., Ltd.; TCL Technology Group Corp.; TCL Electronics Holdings Ltd.; TCL Communication Technology
`Holdings Ltd.; TCT Mobile (US) Inc.; Lenovo Group Ltd.; Lenovo (United States) Inc.; Motorola Mobility LLC; HMD
`Global; HMD Global OY; HMD America Inc.; Sony Corp.; Sony Mobile Communications Inc., ASUSTek Computer Inc.;
`ASUS Computer Int’l.; Caterpillar Inc.; BLU Products; Panasonic Corp.; Panasonic Corp. of North America; Kyocera
`Corp.; Xiaomi Corp.; Xiaomi H.K. Ltd.; Xiaomi Communications Co., Ltd.; and Xiaomi Inc.
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`opposite effect when parties are not given additional trial time or briefing pages to address it. Although
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`Congress considered the public interest to be of paramount concern in Section 337 proceedings,2 current
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`practice treats it merely as one more burden added onto an already burdensome investigation. Without
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`additional time or briefing, the public interest is intermingled with violation issues and subtracts from the
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`resources parties would normally have to present their case.3 Thus, in investigations presenting significant
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`public interest issues, the result is a record that is far from complete on either public interest or the merits
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`of violation to the extent the parties expended their limited resources addressing public interest . Directing
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`the ALJ to hear public interest apart from the substantive violation issues would promote development of
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`the type of record the ITC envisioned when it amended the Rules.
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`In its public interest statement, AGIS repeatedly assures the Commission that AGIS, its secret
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`licensees, and numerous unidentified third parties have the capacity to replace the volume of production of
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`infringing products without delay and with a wide variety of unidentified mobile devices and computers.
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`See, e.g., AGIS Public Interest Statement (“APIS”) at 2, 3, 4, and 5. These assurances are nothing more than
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`hand-waving as AGIS does not provide a scintilla of factual support for its statements. Notwithstanding its
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`assurances, AGIS itself does not provide the U.S. market with any mobile phone, tablet, or laptop computer.
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`Although AGIS does not publicly identify any licensed provider of mobile devices, the complaint itself states
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`that district court cases involving these patents were “resolved” before trial with Apple, HTC, LG, Huawei
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`and ZTE. Complaint at ¶ 225. Even assuming, for the purposes of this statement only, that these
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`manufacturers are licensed as a result of district court resolution, these manufacturers still cannot replace
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`the accused products. The effect of creating an Apple monopoly in the U.S. smartphone market is
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`2 Senate Comm. On Finance, Report on the Trade Reform Act of 1974, S. Rep. No. 1298, 93rd Cong., 2d Sess. 193 (1974)
`(the "public interest must be paramount in the administration of this statute.")
`3 For example, see 337-ITC-1193, Order No. 5 (Apr. 7, 2020) denying a separate hearing on public interest. This Order
`serves as a prime example of the parties’ inability to present the public interest issues properly when the substantive
`merits are already overwhelming the limited briefing space and allotted trial time.
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`addressed later in this submission. HTC has a less than 1% share in the U.S. smartphone market.4 LG has
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`left the mobile market globally.5 Huawei and ZTE smartphones have been banned from the U.S. market by
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`the FCC on national security grounds.6 Because AGIS appears to accuse the Android operating system itself
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`of infringement, any unidentified unlicensed third-party Android supplier would likely face the same threat
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`of infringement from AGIS. Accordingly, the ITC should not be misled by AGIS’ unsubstantiated claims
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`regarding the impact of the requested relief.
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`Section 337(d) requires that the Commission consider the effect of any remedy on public health
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`and welfare, competitive conditions, and consumers in the U.S.7 For mobile devices, one need look no
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`further than market shares to see that the requested remedy would have profound negative effects on
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`competitive conditions in the U.S. for both smartphones and operating systems. One estimate of U.S.
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`smartphone market share in November 2022 shows: Apple at 55.76%; Samsung at 29.72%; Motorola at
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`5.19%; followed by Google, LG, and “unknown” with 2.26%, 1.87% and 0.95% shares, respectively.8 Using
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`these figures, an Herfindahl–Hirschman Index (HHI) calculation reveals an already highly concentrated
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`market in the U.S.9 Considering the current market and accounting for the facts that AGIS (i) seeks to
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`exclude products from Samsung, Motorola, Google, and others; and (ii) AGIS accuses the Android operating
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`system itself of infringement; it is unclear what vendor other than Apple would be likely to provide product
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`after entry of the requested remedial orders. Excluding every Apple smartphone competitor with more
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`4 See, e.g., https://gs.statcounter.com/vendor-market-share/mobile/united-states-of-america;
`https://www.counterpointresearch.com/us-market-smartphone-share/
`5 See, e.g., https://www.forbes.com/sites/siladityaray/2021/04/05/after-years-of-losses-lg-is-shutting-down-its-
`smartphone-business/?sh=5cd355905e25
`6 See, e.g., https://www.nextgov.com/emerging-tech/2022/11/fcc-bans-sale-new-devices-chinese-companies-huawei-
`zte-and-others/380214/; https://www.ft.com/content/efdceeca-a153-4a56-8703-799b6a4280b3;
`https://www.fcc.gov/document/fcc-bans-authorizations-devices-pose-national-security-threat
`7 19 U.S.C. § 1337(d)(1). The production of directly competitive articles in the U.S. is not relevant here as Samsung is
`not aware of any competitive mobile devices supplier manufacturing in the U.S. As noted above, Samsung and Intel
`do not compete in the applications processor market for smartphones, tablets, and smartwatches.
`8 https://gs.statcounter.com/vendor-market-share/mobile/united-states-of-america; for Q2 2022, see:
`https://www.counterpointresearch.com/us-market-smartphone-share/
`9 https://www.justice.gov/atr/herfindahl-hirschman-
`index#:~:text=The%20HHI%20is%20calculated%20by,%2B%20202%20%3D%202%2C600).
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`than a 1% market share (and a few more manufacturers for good measure) would significantly and
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`negatively impact the competitive conditions in the U.S. for smartphones. Indeed, issuing AGIS’ requested
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`relief would grant Apple a monopoly in the U.S. smartphone market. And even so, Apple could not double
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`its production of U.S. mobile devices to fulfill U.S. demand in a commercially reasonable time.10 In the
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`same manner, excluding every Android provider with more than a 1% market share would significantly and
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`negatively impact the competitive conditions in the U.S. by reducing U.S. consumers’ choices for mobile
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`operating systems from two to one (i.e., iOS).
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`The U.S. market for tablets raises similar concerns. One August 2022 estimate shows the U.S.
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`tablet market supplied by: Apple at 54%; Samsung at 20%; Amazon at 12%; followed by Unknown (11%)
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`and Alcatel and ASUS (<1% each).11 Again, a simple HHI score shows that the U.S. tablet market is already
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`concentrated. Assuming the Proposed Respondents’ sales were proportionately distributed after exclusion,
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`the HHI would rise more than 1,400 points with Apple’s U.S. tablet share exceeding 67%.12 Again, the
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`requested relief would significantly and negatively impact competitive conditions in the U.S. tablet market.
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`U.S. consumers would also be significantly and negatively impacted by the requested remedial
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`orders. As AGIS admits, the products at issue are used by U.S. consumers “for personal, business, and
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`communication purposes.” APIS at 4. In fact, the average U.S. consumer spends 5 hours and 24 minutes a
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`day on their phone.13 Some have described cell phones as a “constant companion:”
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`As many as 71% of us check our phones within 10 minutes of waking up. And 74% of us can’t leave
`our cell phones at home without feeling uneasy. Nor can we imagine our little companions dying—
`48% of people say they feel a sense of panic or anxiety when their cell phone battery goes below
`20%.14
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`10 See, e.g.,
`https://www.gsmarena.com/kuo_apple_facing_shortage_of_1520_million_iphone_14_pros_ahead_of_holiday_shop
`ping_season-news-56696.php
`11 https://gs.statcounter.com/vendor-market-share/tablet/united-states-of-america.
`12 See n.9 above. DoJ and FTC consider a 200 point change in the HHI to raise market power concerns in horizontal
`mergers.
`13 See, e.g., https://www.zippia.com/advice/smartphone-usage-statistics/ ;
`14 See, e.g., https://www.reviews.org/mobile/cell-phone-addiction/
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`Excluding more than 35% of the U.S. smartphone market would result in shortages and as described above,
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`a lack of meaningful choice for U.S. consumers. As Samsung has explained in previous investigations, the
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`follow-on effects would significantly and negatively impact U.S. consumers as well as the general health,
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`welfare, and functioning of American society. 15 Any argument to the contrary is disassociated from the
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`modern realities of life, which have only become more reliant on mobile devices through the COVID years.
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`AGIS’ requested remedy would stymie the Biden Administration’s goal of universal access to high-
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`speed internet and closing the digital divide for both students and agricultural communities.16,17 None of
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`these goals can be met without a healthy competitive environment and adequate supply of mobile devices.
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`In conclusion, the remedy requested in this complaint raises significant concerns and the ITC must
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`ensure careful consideration of the impact on U.S. public health and welfare, competitive conditions, and
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`consumers.
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`15 During the pandemic, smartphones and tablets became the safer and more efficient way to perform the
`requirements of daily life such as seeing a doctor, finding and keeping a job; banking, or seeking mental health
`assistance. As COVID has become endemic, the centrality of mobile devices to American life have persisted. See, e.g.,
`https://www.whitehouse.gov/ope/briefing-room/2022/03/31/broadbandtelehealth/;
`https://www.indeed.com/career-advice/finding-a-job/how-to-use-your-phone-to-search-and-apply-for-jobs;
`https://www.gobankingrates.com/money/jobs/gen-z-best-jobs-you-can-do-from-your-phone/;
`https://www.pymnts.com/digital-first-banking/2022/banks-turn-mobile-banking-into-consumers-financial-tool-of-
`choice/; https://www.cnn.com/2021/08/09/us/how-to-show-vaccination-proof-on-phone-wellness-trnd/index.html;
`https://covid19.nih.gov/news-and-stories/treating-anxiety-depression-during-pandemic-with-mobile-app
`16 See, e.g., https://www.whitehouse.gov/briefing-room/statements-releases/2021/12/22/fact-sheet-biden-harris-
`administration-mobilizes-resources-to-connect-tribal-nations-to-reliable-high-speed-internet/
`17 See, e.g., https://townhall.com/columnists/mariolopez/2022/04/30/needless-patent-disputes-widen-the-digital-
`divide-for-minority-and-lowincome-americans-n2606569; https://www.nationalgrange.org/patent-trolls-threaten-
`efforts-to-expand-rural-broadband-and-smart-agriculture/; https://www.nationalgrange.org/opinion-what-
`government-should-shouldnt-do-toadvance-mobile-tech-in-ag/ ; https://www.ntia.doc.gov/blog/2022/celebrating-
`national-digital-inclusion-week-and-efforts-close-digital-divide-0
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`Respectfully submitted,
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`/s/Karin J. Norton
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`Karin J. Norton
`Vice President and Senior Counsel, Washington DC IP Office
`Samsung Electronics America, Inc.
`700 Pennsylvania Avenue SE, Suite 600
`Washington, DC 20003
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