Companies Lining Up in Support of Apple Ahead of Potential Older Model iPhone/iPad Ban in U.S.

Gasu E. said:

It seems to me the issue is narrower here. Since Samsung is required to license the technology to Apple under FRAND, this is a monetary dispute. ....

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From my understanding Samsung, combined their FRAND offer with non-FRAND SEPs and a cross license deal with Apple for Apple's non-FRAND patents (all together in the same agreement). So if Apple wants to use the FRAND patents, it'll have to cross license it's Apple non-FRAND patents to Samsung on Samsung terms.

Apple, obviously rejected the offer and is now infringing the patents. Apple wants more reasonable rates and separate negotiation for FRAND SEP's and non-FRAND patents. (And of course, Apple wants to choose which of their own patents they want to cross-license)

The key issue is what constitutes patent abuse and a reasonable package/offer. The EU started to go after Samsung for anti-trust, and Samsung dropped injunction requests in Europe. In the US (from my understanding), there is timing problem... the ITC did not link anti-trust to Samsung's offer and the DoJ has yet to act. In the meantime Apple continues to use the patents.


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Oletros said:

Motorola against Microsoft in Germany
Phillips in Netherlands

Qualcomm against Broadcom in USA (it was appealed)

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I'm talking about the U.S., not other countries.

aqui said:

Actually, Samsung did not - according to the trial info. In the case, it has been lowered for other companies as it was unsustainably high (2.4%).

How much of a difference is there and what should the actual rate be?
Well, one guy wheeled in as part of the case had mentioned that the FRAND patent was actually worth about 0.01% of the actual technology (it's a small piece of code within the technology, not the UTMS technology itself as some people have been reporting) or to put it another way accounts for 0.000375% of the UMTS standard. Or at least that is what Dr. Niles Rydbeck former CTO at Erikson mentioned.

So yeah, I guess Apple did balk at getting ripped off by the world's largest cell phone manufacturer. I think I would too.

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FRAUD does not mean free.
Generally that is a starting point and others cut deal by sharing their patents.
Apple does not want to add anything into the pool so guess what they pay a higher rate.

Apple is reaping what they started. They refuse to play ball so guess what they get to pay up now. I do not think this ban should be over ridden. Those same companies companies about it should be bitching at Apple and tell Apple to pay up.

MegamanX said:

FRAUD does not mean free.
Generally that is a starting point and others cut deal by sharing their patents.
Apple does not want to add anything into the pool so guess what they pay a higher rate.

Apple is reaping what they started. They refuse to play ball so guess what they get to pay up now. I do not think this ban should be over ridden. Those same companies companies about it should be bitching at Apple and tell Apple to pay up.

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You don't understand that the standards bodies didn't intend for FRAND patents to be abused to force vendors who don't have many patents to share them with the incumbents who have thousands of patents. Apple does have many non-SEP patents, but Apple doesn't have to cross license it's non-SEP patents to gain access to Samsung's SEP patents. Apple could lower Samsung's ridiculous* starting rate by including non-SEPs.

*Why is that ridiculous? If every vendor that owns SEPs would ask for a similar rate the price of phones would skyrocket.

And furthermore, I don't think courts have defined the monetary value of FRAND. Is Samsung's rate too high or is 0.00005% appropriate?

duffman9000 said:

You don't understand that the standards bodies didn't intend for FRAND patents to be abused to force vendors who don't have many patents to share them with the incumbents who have thousands of patents. Apple does have many non-SEP patents, but Apple doesn't have to cross license it's non-SEP patents to gain access to Samsung's SEP patents. Apple could lower Samsung's ridiculous* starting rate by including non-SEPs.

*Why is that ridiculous? If every vendor that owns SEPs would ask for a similar rate the price of phones would skyrocket.

And furthermore, I don't think courts have defined the monetary value of FRAND. Is Samsung's rate too high or is 0.00005% appropriate?

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The rate everyone pays has been what it is for a while. That was the near the agreed rate way back when. They are allowed to cut deals to lower said payment rate that or they cross dealing causes the rate to fall.

Apple is not willing to pay up and the courts ruled the deal samsung offered was FRAND. Apple was not coming any where close in the deal and refused to pay up. Hammer comes down and time for Apple to pay up.

chances are Apple will have to pay a lot more now than if they had been willing to cut a deal. Now Samsung can more or less force Apple to pay the full amount.

MegamanX said:

The rate everyone pays has been what it is for a while. That was the near the agreed rate way back when. They are allowed to cut deals to lower said payment rate that or they cross dealing causes the rate to fall.

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No one was crazy enough to test that the starting negotiating rate was valid. Furthermore, if a vendor had little-to-no non-SEPs and no SEPs, then the other SEP holders like Motorola, Samsung, and IBM (I'm not going to list everyone) could effectively shut out competition.

duffman9000 said:

No one was crazy enough to test that the starting negotiating rate was valid. Furthermore, if a vendor had little-to-no non-SEPs and no SEPs, then the other SEP holders like Motorola, Samsung, and IBM (I'm not going to list everyone) could effectively shut out competition.

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Just keep repeating stuff.

Does not change the fact that they ruled Samsung offer FRAND terms and Apple did not nor was willing to negotiated in good faith. Hammer comes down. Apple has to pay up.

MegamanX said:

Just keep repeating stuff.

Does not change the fact that they ruled Samsung offer FRAND terms and Apple did not nor was willing to negotiated in good faith. Hammer comes down. Apple has to pay up.

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You keep repeating stuff. You forget that this up for a Presidential VETO. Keep dropping the hammer because it won't matter.

duffman9000 said:

You keep repeating stuff. You forget that this up for a Presidential VETO. Keep dropping the hammer because it won't matter.

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chances are if he follow the pattern set by most presidents is he will do nothing. Hell in the past Verizon ended up coughing up the money so they could keep phones being imported in the same issue with Quadcomm.
From this ruling apple could now be nail for willful infringing when it goes to full court and they can and more than likely will get slapped with a 3x.

MegamanX said:

From this ruling apple could now be nail for willful infringing when it goes to full court and they can and more than likely will get slapped with a 3x.

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I have no idea what you're trying to say. What's a 3x?

duffman9000 said:

I have no idea what you're trying to say. What's a 3x?

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basically take the fee multiply it by 3 for willful infringing.

Do not expect a Veto. It would set a bad precedence. Chances are Obama will do nothing like all the presidents before him. You have to make a good case that it hurts the american people. Not being able to get a low cost iPhone is not one of them as there are a lot of other choices.

duffman9000 said:

You don't understand that the standards bodies didn't intend for FRAND patents to be abused to force vendors who don't have many patents to share them with the incumbents who have thousands of patents.

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Not this standards body. Its primary members were happy to accept whatever IP a licensee had to trade. In fact, I think they were really used to it. That's the main reason why there's no history of higher rates being accepted before.

That's also why Apple's refusal to trade its own patents kind of threw a wrench into the whole works. I don't think anybody had rate plans for that.

duffman9000 said:

Proof? I didn't know negotiations were public?.

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Actually, if you go to the ITC's Electronic Document Information System here, you can register and then look at the public documents.

Be prepared for bleeding eyeballs, though. The evidence in this case was well over 800 pages, and the decision alone was like 700+ pages, IIRC.

Apparently Samsung started with the 2.4% of the phone price. Apple says they responded with a counteroffer, which Samsung claimed was more like a critique instead. Anyway, Apple's response was a proposal to base small royalties on the price of the broadband chip.

Apple never responded to Samsung after that, as they decided to switch over to suing in the Federal courts, which the ITC didn't appreciate.

Around page 466 of the decision is the ITC's primary FRAND ruling, which I have dug up for you here:

"The Administrative Law Judge concludes that the evidence does not support Apple’s allegation that Sarnsung failed to offer Apple licenses to Samsung’s declared-essential patents on FRAND terms. Patents have the attributes of personal property. 35 U.S.C. § 261. Their value, in terms of licensing, varies according to a myriad of factors, and it is not enough for Apple to say that Samsung’s license offer was unreasonable based on Apple’s rationale.

"Remarkably, even though Apple complains that Samsung’s license offer was not FRAND, Apple has not shown that, as a member to ETSI, it ever availed itself of the process and procedures of the ETSI under Clause 4.3 of the ETSI Guide on IPRs, which provides for mediation by ETSI Members or the Secretariat. (RX-0713 at Clause 4.3.)

"It is not enough for Apple to complain that Samsung’s license offer of 2.4 percent of the selling prices of Apple’s devices, is unreasonable, since there is insufficient evidence of customs and practices of industry participants showing that Samsung’s demand is invidious with respect to Apple.

"Furthermore, negotiations often involve a process of offer and counteroffer before the parties arrive at an agreed price, but Apple’s evidence does not demonstrate that Apple put forth a sincere, bona tide effort to bargain with Samsung. Rather, it appears that Apple and Samsung both decided to negotiate licensing terms between each other through the tortuous, and expensive, process of litigation.

"More than what has been cited by Apple is necessary in order to establish that Samsung violated its obligations under Clause 6.1 of Annex 6: ETSI Intellectual Property Rights Policy. More than that, Apple needs to establish a legal basis for foreclosing enforcement under Section 337 in this investigation, which Apple has not done."

- ITC case 337-794

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Personally I think the ITC should've given Apple one more change to make a deal, before imposing the ban.

kdarling said:

Not this standards body. Its primary members were happy to accept whatever IP a licensee had to trade. In fact, I think they were really used to it. That's the main reason why there's no history of higher rates being accepted before.

That's why Apple's refusal to trade its own patents kind of threw a wrench into the whole works. It was unprecedented.



Actually, if you go to the ITC's Electronic Document Information System here, you can register and then look at the public documents.

Be prepared for bleeding eyeballs, though. The evidence in this case was well over 800 pages, and the decision alone was like 700+ pages, IIRC.

Apparently Samsung started with the 2.4% of the phone price. Apple says they responded with a counteroffer, which Samsung claimed was more like a critique instead. Anyway, Apple's response was a proposal to base small royalties on the price of the broadband chip.

Apple never responded to Samsung after that, as they decided to switch over to suing in the Federal courts, which the ITC didn't appreciate.

Around page 466 of the decision is the ITC's primary FRAND ruling, which I have dug up for you here:



Personally I think the ITC should've given Apple one more change to make a deal, before imposing the ban.

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because the ITC probably felt Apple wasn't going to budge from their 33 cent offer.

heov said:

Very analogous to bailouts and "too big to fail."

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Agreed. Suddenly the patented technology is "too important to ban". That's BS. The infringing Apple products should be banned. The only thing companies understand is significant economic impact. Steal technology without paying a licensing fee, and you don't do business. Simple as that.

Of course, Apple will win, and there will continue to be no drawback to stealing patented tech.

KPOM said:

AT&T versions of the iPhone 4 and iPad 2 with 3G.



I believe at one point Apple disputed the validity of the patent (as Samsung has done with some of Apple's). If it were solely a dispute about how much Apple has to pay Samsung, the federal courts are a better venue. That's essentially the message of the other companies who are petitioning for a veto of the ITC's order (or a reversal). My guess is that they'd do the same if Apple had won an import ban on a Samsung product. At one point Apple did win an import ban on some old HTC phones, but then the two parties entered into a broader licensing agreement to resolve all their patent disputes.

I'm sure Samsung's hoping that an import ban, however, short, might force Apple into entering into a cross-licensing agreement similar to Apple's with HTC, but that doesn't seem likely. With the rumored plastic iPhone looking to replace the iPhone 4 soon, it's probably not worth it for Apple (they can lower the price of the AT&T iPhone 4S in the meantime - and probably would have anyway given that we're close to an iPhone 5 refresh).

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OK, thank you. Was just trying to put this in perspective.

scoobydoo99 said:

Agreed. Suddenly the patented technology is "too important to ban". That's BS. The infringing Apple products should be banned. The only thing companies understand is significant economic impact. Steal technology without paying a licensing fee, and you don't do business. Simple as that.

Of course, Apple will win, and there will continue to be no drawback to stealing patented tech.

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You can get off your high horse. The patents at issue are standards essential and the only thing that should be at issue is the royalty. There are about 250,000 patents relevant to a mobile phone. The only reason any of the SEPs has any value is that the standards setter decided to go with one implementation vs potentially dozens of others that would have done the same thing. Samsung is entitled to money but it is ludicrous for them (or Apple for that matter) to be able to win a ban over a dispute over a relatively small sum of money. Unfortunately the ITC can't award monetary damages. They can only ban products.

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lazard said:

because the ITC probably felt Apple wasn't going to budge from their 33 cent offer.

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However that's an argument for expanding the ITC's available remedies. Right now all they can do is levy import bans. That's a nuclear option that isn't consistent with the aim of IP law. If the ITC thinks $2 is reasonable (or some other figure) perhaps they should have the ability to order such a remedy. Apple could post a bond for that amount while continuing to appeal.

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kdarling said:

Not this standards body. Its primary members were happy to accept whatever IP a licensee had to trade. In fact, I think they were really used to it. That's the main reason why there's no history of higher rates being accepted before.

That's also why Apple's refusal to trade its own patents kind of threw a wrench into the whole works. I don't think anybody had rate plans

Personally I think the ITC should've given Apple one more change to make a deal, before imposing the ban.

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The difference is that none of Apple's patents are standards essential. No one has to use them in order to make a usable product. Everyone has to use Samsung's.

As for the remedies the ITC has only one, nuclear option. Perhaps they should have more powers to levy financial remedies.

lazard said:

Samsung offered to license the patent to Apple at the standard FRAND rate they charged other companies. Not their fault that Apple balked.

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The timeframes are hard to follow maybe you can jog my memory.
Are we talking about the Patent Samsung license on FRAND terms to the people who make the the 3G chip, generally allowing them to on sell that chip to OEM's with no further cost in providing 3G support, until they signed a deal to provide to Apple for the iPhone or a different patent?

Glideslope said:

...

Barry Obama is going to have to choose.

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Guess: you drive a pickup truck in Arizona ?

kdarling said:

Actually, if you go to the ITC's Electronic Document Information System here, you can register and then look at the public documents.

Be prepared for bleeding eyeballs, though. The evidence in this case was well over 800 pages, and the decision alone was like 700+ pages, IIRC.

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Thanks for the info. I'll start reading this the next time I really want to fall asleep.

For everyone slamming Apple for suing Samsung...have you seen the "Samsung experience" shops? Its so blatantly obvious that Samsung is trying to ride on the iPhones success by stealing ideas, or coming dangerously close to stealing ideas, but still getting away with it. Its funny that they then, paint the iPhone out to be some inferior device, after mimicking it so much. - Alright now I'm done with that rant.

Apple caught them when they stepped a little too far over the line. Now they're pissy and trying to get back at Apple for something that is not a aesthetic or unique design idea, but rather a NECESSARY technology.

Could someone explain why the US government would rule in favor of a patent made by a foreign business vs a domestic business? I can't seem to wrap my head around it, yes Apple should be forced to pay the fair licensing to Samsung, the same as everyone else, but I don't see why a court would rule that more money should go to a foreign country.

By the way I'm new here. Hi

TylerD554 said:

Could someone explain why the US government would rule in favor of a patent made by a foreign business vs a domestic business?

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Perhaps because the company nationality doesn't have to have anything with justice?

jasvncnt said:

like........a flat, clear, black-colored, rectangular front surface with four evenly rounded corners

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You need to learn what trade dress is and isn't.

Westside guy said:

You need to learn what trade dress is and isn't.

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Design patents or community designs are not trade dress, are they?

when samsung faces a loss no one cares when apple faces a loss the govt gets involved, that's totally unfair.

keysofanxiety said:

With respect, did you even read the article? Samsung have something patented that is essential for 3G to work. That isn't just limited to Apple, that includes every single manufacturer who have 3G working on their smartphones.

Samsung = extremely dangerous, and considering how much they contribute to the Korean economy they have a lot more political power than people think.

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I respectfully suggest you too read up a little too. What Apple is doing is called reverse holdup. The FTC has recognized this and said injunctions are ok in such a case. So it is not fair for Apple to use any stuff that is patented by others (SEPs or not) and not pay for them citing the fact that you cannot grant injunctions for SEPs as a reason, for ever or offer to pay a pittance for using those patents just because they are SEPs.. Apple will hopefully learn a lesson or two..