A complaint to the U.S. International Trade Commission by one of the world’s biggest smartphone companies seeks to halt imports of some aftermarket screens into the U.S., threatening the supply of parts to independent repair shops.
Samsung lodged a complaint with the U.S. International Trade Commission (ITC) over OLED screen patents on Dec. 28 against over a dozen small U.S. repair shops. Chinese OLED manufacturer BOE got involved by filing its own motion in late February, and the case has drawn the eyes of right-to-repair advocates and the independent repair industry.
Samsung’s complaint dealt with four patents for active matrix OLED (AMOLED) displays. The communications giant accused 17 companies of direct and indirect patent infringement, seeking to bar those companies from importing the patented displays with a general exclusion order. It’s also seeking a permanent cease and desist order for the named companies, which are mostly small, independent repair and refurbishing operations.
The document included nearly 200 exhibits and evidence of specific instances of sale or importation, including photos of the products that Samsung claims violate those patents.
Shay Kripalani is the CEO of Injured Gadgets, one of the named companies. He told E-Scrap News that he didn’t even realize Samsung held such a patent until he was served the investigation papers in early January.
Kripalani said a Samsung win would reverberate past aftermarket repair and into the secondary device market, as well as into related industries such as insurance warranty companies.
“The No. 1 part that’s repaired is a screen, so if the cost of the screen goes from $30 … to $300 for an OEM one, you’re killing the secondary market,” he said.
BOE’s motion stated that it got involved to protect its interests, investments and business surrounding AMOLED display panels and because “many of the respondents are small businesses that may not have the desire or the financial resources to defend the case vigorously.”
Samsung did not return E-Scrap News’ requests for comment. BOE declined to comment at this time.
Original complaint details
The complaint from Samsung (referred to in the document as SDC) hinges on its AMOLEDs and Section 337 of the Tariff Act of 1930, which makes “unfair methods of competition and unfair acts in the importation of articles into the United States, or in their sale,” unlawful if they destroy or substantially injure an industry in the U.S.
“Despite the patents covering SDC’s AMOLED display products, SDC has become aware that its designs and technologies are being widely copied in aftermarket displays used as replacement displays for mobile devices,” the complaint stated.
That practice violates Section 337 “through, and in connection with, the unlicensed importation into the United States, sale for importation into the United States, and/or sale within the United States after importation,” the documents noted.
It threatens Samsung’s research and development investments, the documents allege, because in 2020 Samsung Electronics spent $18.45 billion on R&D and in 2021 it spent $19.58 billion. Of those totals, about $1.13 billion and $1.24 billion, respectively, was spent in the United States.
BOE pointed out in its motion that although the complaint does not name BOE or any other AMOLED manufacturer as a respondent, a general exclusion order would certainly affect it, because CBP would likely “detain shipments containing Mianyang BOE replacement screens and, if CBP erroneously believes that Mianyang BOE’s products infringe the asserted patents, it may improperly bar Mianyang BOE products from entry.”
“Mianyang BOE has invested significant resources into the design, development and manufacture of its AMOLED screens and it should be afforded the opportunity to protect those investments by participating as a respondent in this case,” the company noted.
Kripalani from Injured Gadgets said his company never had any legal issues before.
“We always tried to stay very legal and so have most of our competitors, so it was very surprising to hear that they were investigating us,” he said.
Repair industry response
Louis Rossmann, an independent repair technician who was not named in the case, said in a YouTube video posted Jan. 11 that to him it seems that Samsung is trying to block imports of all aftermarket screens, because customs officials won’t be able to tell the difference between those that may violate a patent and those that do not.
“To be clear, when we say aftermarket, we’re not talking about somebody pretending that something has a Samsung logo on it or has a Samsung part when it does not,” Rossmann said. “We are talking about parts that are very clearly branded as refurbished, aftermarket or not original for a mobile device.”
A blanket order may even block the importation of refurbished iPhone screens – those with new glass but which retain the original AMOLED – Rossmann said, and “would result in the independent repair industry being shot dead.”
A fight between giants
Rossmann said in a Feb. 13 video that he thinks there’s more going on with the case than a simple patent complaint, pointing out that Apple recently contracted BOE to make 70% of the screens for its initial order of iPhone 15 displays, up from the 15% or so of iPhone 12 screens. Samsung used to provide the majority of screens for Apple, meaning BOE is now positioned to potentially overtake Samsung as the leading supplier for the iPhone.
Kripalani said for a long time, BOE was focused on making screens for brands that are popular internationally but not in the U.S. If the ITC rules in favor of Samsung, it could “give them a stronghold on service in the U.S.,” he added.
Samsung and Apple have been suing each over back and forth for years over patent issues, Rossman said, and he believes this latest iteration is about “the industry war between China and the U.S.”
Kripalani agreed that it seems like Samsung is going after the supply chain and it’s a fight “between BOE and Samsing and not us, we’re just pawns.”
He said his lawyer estimates the investigation and case will take between 16 and 24 months, and that means all the named companies need to keep paying legal fees. A procedural schedule set a completion target for the investigation of July 3, 2024.
“Legal fees are not cheap,” Kripalani added.
Effect on the public and economy
Samsung is arguing that the investigation “does not present a situation in which the Commission, the parties or the public should expend the time or resources to undertake discovery and trial.”
Under ITC rules, the public only gets to participate in and comment on the case if it’s proven that there is sufficient public interest.
“The public should get a say here,” Rossman said, arguing that the case is certainly in the public interest, because it affects how much consumers will pay to repair a device and whether they will be able to repair the device at all.
Samsung’s complaint stated that the general exclusion order and cease and desist orders would not adversely impact the competitiveness of the United States economy, the production of like or directly competitive articles or United States consumers.
Rossmann disagrees, saying that the effective banning of all screen imports “100% affects the competitive state of the U.S. economy.”
He said the consumer should have the option to choose what kind of screen to buy, even if a cheaper aftermarket screen is potentially of a lower quality.
“I don’t think the public interest is that the manufacturer is the only one who can sell a screen,” he said, because that would force more people to buy new devices when a screen broke.
Samsung also said the proposed remedial orders would not impact the importation of smartphones, tablets or other end-user devices containing AMOLED displays. Again, Rossman disagreed, because “we’re talking about shapes of pixels” and “customs won’t be able to tell the difference.”
“Samsung is looking to ban everybody from importing cell phone screens, functionally,” Rossman said. “Everything will be blocked.”
He added that if Samsung’s requests are granted, it will be “an arrow into the heart of the repair industry.”
