ITC Rules Apple Infringed on Samsung Patents, Issues Cease and Desist Order for Older Apple Devices

[MegamanX]

But Apple does have Patents that are in the pool , ones the acquired from Nortel and Freescale. What Samsung wanted was not only payment based on FRAND but they ALSO demanded that Apple give them access to non related patents which went well beyond what they were entitled to.

but they did not have them on those devices or doing that time. Plus given how Apple has been treating everyone why would anyone want to cut a deal with Apple. Apple is a VERY untrustworthy company.

 

[kdarling]

But Apple does have Patents that are in the pool , ones the acquired from Nortel and Freescale. What Samsung wanted was not only payment based on FRAND but they ALSO demanded that Apple give them access to non related patents which went well beyond what they were entitled to.

Got a source for such a demand?

Let's try to deal in facts. (I signed up at the ITC, searched through almost 700 documents for this case, and found the almost 800 page ruling and evidence. (Since non-members cannot link to that info, here's a copy of the best parts at Groklaw.)

The ruling mentions previous offers to Apple for licensing Samsung's tech, with no response from Apple. There is no record of any demand as claimed above.

Here is what the ITC originally ruled about the FRAND offers:

"The Administrative Law Judge concludes that the evidence does not support Apple's allegation that Samsung 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 fide 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 Ruling pg 469-470

Normally a court would impose a royalty for infringements like this. The ITC has no such power. They can only ban imports and sale. (Which is, of course, exactly why so many companies... Apple included... often run to the ITC first.)

 

[Jvanleuvan]

It'd be no different than if an auto manufacturer included a cell phone in an expensive car :

The royalty would be paid on the system that uses the chip, not on the vehicle carrying the system.

(This assumes the system maker hadn't negotiated a different way of determining royalties, of course. It's not set in stone that the rate MUST be per price. It's simply one of the more common methods that also made sense when trying to promote widespread inexpensive phone usage.)

Okay, that sounds reasonable. So couldn’t (shouldn't) apple just pay on the system that uses the chip, i.e. the 3g subsystem.

Realistically a Smartphone is a hand-held computer that contains many systems. (touch screen, CPU, GPU, Battery, Charging Controller, Memory, Flash Storage, Casing, Wifi Communications, Bluetooth Communications, Cellular Communications, Compass/Accelerometer, Camera, etc...)

In my mind, similar to a "Plane" or a "Car", a single "consumer" product composed of many many subsystems. One of which may be a 3g Cellular communications system, shouldn’t then Airbus, Mercedes, or Apple only owe royalties on the value of the subsystem that uses the patent? As opposed to the entire finished consumer product? So, that would be ~2.4% of what $10 (for the chip)



Also, I'm confused as to why Apple owes Samsung anything, doesn't Apple BUY the 3g chips from QUALCOMM? Shouldn't the royalties due on the manufacture of 3g technology, be played by the manufacturer of the 3g components that actually use the technology? then those costs would be passed on to QUALCOMM’s customers?


The reason I ask, is that it seems counter-intuitive: If I build widgets, and I use some bolts to assemble the widgets, bolts I purchased through Granger, or the like, I would be SHOCKED if the patent owner of the bolt-making process came after a chunk of the value of my widgets? I DON’T make bolts, I make widgets, I buy bolts.

and if the Bolt making company can come after Me because my widgets use his patented bolts (which I bought) Couldn't he go after MY customers because their Doodads use my widgets which use his Bolts! That I bought from Granger? Where does this stop?


Thanks
your explanations are very helpful

 

[kdarling]

Okay, that sounds reasonable. So couldn’t (shouldn't) apple just pay on the system that uses the chip, i.e. the 3g subsystem.

Yes, of course that always sounds reasonable.

It's not just Apple who would like that, either. No doubt Samsung would also love to not pay high royalties on their own flagship phones. Including the high payments to Qualcomm. Who in turn, has to pay others.

Not to mention Vertu and their over $10,000 phones! And we think Apple and Samsung have problems... ha. Still, I suspect there's an upper limit on the rate somewhere.

The advantage of the method is that it allows for incredibly inexpensive ($20-$30 wholesale) phones used by hundreds of millions in emerging markets. Take away the pro-rated rates, and prices would have to go up across the board. It could be a social disaster.

In a similar way, Apple always charges 30% to app developers, even though the cost of storing an app should be the same no matter what its price is. They also use that extra revenue to subsidize free apps.

Also, I'm confused as to why Apple owes Samsung anything, doesn't Apple BUY the 3g chips from QUALCOMM?

Newer devices using Qualcomm chips are not affected by this ruling.

This is for Intel / Infineon chips.

The reason I ask, is that it seems counter-intuitive: If I build widgets, and I use some bolts to assemble the widgets, ...

Okay, that's a common question. Consider:

Anyone can buy all the parts needed to make an iPod. No license needed, right? However, if you actually built and sold an iPod, you would infringe on Apple IP.

Likewise, anyone can buy a radio chip. You could probably even cobble up a custom network. But you will need certain broadband code on those chips to talk to standard networks, and that's where you run into IP belonging to someone OTHER than the chip maker (who has his own hardware licensing problems to deal with - grin).

Regards.

 

[samcraig]

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 fide 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.

And this is what I've been asserting in these threads without having done the same due diligence as you. Thanks for posting.

 

[funkybudda]

nice

good one by Samsung, keep it up.

 

[tongxinshe]

What you have replied doesn't shows a ****. Companies has been paying a percentage of the retail price since decades. Qualcomm has been licensing it products for a 3% of the retail price.

I know the tradition has been to set the royalty rate against the product price, but that doesn't mean you can set an obvious inactionable rate for a FRAND patent.

The 3% rate for Qualcomm is a lump sum, not for one single patent. Beware that Qualcomm holds almost all of the real critical patents for 3G technology.

 

[tongxinshe]

Who are you accusing of being a paid commentator?

At least the 4 who clicked "like" immediately after your meaningless comment was posted. Given the time interval, they were well disciplined. As to you, maybe, but maybe not that obvious, either.

And the error is obvious. First of all - how did you arrive at the notion that the iPhone has 100 patents that it uses. And also - how did you arrive that each patent would be worth 2.5% of the phone if used?

So you don't know the meaning of phrase "at least" or simply try to tweak other people's meaning for the sole purpose of winning a debate?

Well, even if you did not graduate the elementary school and never knew the meaning of "at least", it is still a good sign of lacking basic logics or math knowledge to think that 250% can only be made of 100 pieces of 2.5%.

 

[sir1963nz]

but they did not have them on those devices or doing that time. Plus given how Apple has been treating everyone why would anyone want to cut a deal with Apple. Apple is a VERY untrustworthy company.

Apple has treated everyone ????
Exactly how would you treat someone who was stealing YOUR stuff

 

[SILen(e]

but they did not have them on those devices or doing that time. Plus given how Apple has been treating everyone why would anyone want to cut a deal with Apple. Apple is a VERY untrustworthy company.

Which company is less trustworthy, the company which is being paid to manufacture and sometimes develop components and 2-3 years later, they start selling devices that look the same and always have that slight advantage performance-wise or the company that sues the former company for said cloning?

Just imagine you invented a new type of alarm clock.
You're an IP company, you know how to invent cool stuff, but you lack the expertise to manufacture said cool stuff.
So you - like so many other companies - pay a Chinese (I know that Samsung is South-Korean, but Chinese works best in this example) company to manufacture the alarm clock to your design.

It is a success and people start buying it in the hundreds of thousands.

9 Months later, the company which you paid to build your alarm clocks starts selling their own alarm clock, which looks and works almost the same, but is priced cheaper.

1. This has happened countless times with all kinds of products
2. You'd be pissed!



Samsung does this because they know they will benefit in the end, they have way too much money and power to not be successful with this strategy, they have cloned products of other companies for years.
They got sued, settled out of court and never had to pay fees remotely as high as they had earned money from this approach.

The case with Samsung and Apple is even more grave and also a bit different:
Samsung is not just cloning a product of some other company, but a product of a company which is paying them for components, they are in a business relationship.

This means that Apple will be even more pissed than if some random chinese company cloned the iPhone (which also happens) and that Samsung is able to profit from the knowledge they gain from Apple.

Apple is ordering new smaller or larger displays? Oh, so Apple must be developing a smaller iPad or a larger iPhone.

You're a fool if you don't think Samsung is giving such information to other parts of their company, like Samsung Semiconductors giving information about Apples SoCs to Samsung Mobile.

A manager from Samsung sold information about the iPad display size to analysts before the iPad was unveiled in 2010, so if people are selling information to outsiders, i very much doubt that they are not giving them secretly to other branches of their company.

Another reason why Apple will be even more pissed at Samsung.


But what is the other difference?

Apple, especially under Steve Jobs, doesn't want to settle out of court and allow some other company to sell devices that look or behave like Apples devices, they won't stop until the infringing company stops it.

 

[Oletros]

You're a fool if you don't think Samsung is giving such information to other parts of their company, like Samsung Semiconductors giving information about Apples SoCs to Samsung Mobile.

Proof or it is just your opinion?

A manager from Samsung sold information about the iPad display size to analysts before the iPad was unveiled in 2010, so if people are selling information to outsiders, i very much doubt that they are not giving them secretly to other branches of their company.

Any link to that story?

 

[samcraig]

At least the 4 who clicked "like" immediately after your meaningless comment was posted. Given the time interval, they were well disciplined. As to you, maybe, but maybe not that obvious, either.

So you don't know the meaning of phrase "at least" or simply try to tweak other people's meaning for the sole purpose of winning a debate?

Well, even if you did not graduate the elementary school and never knew the meaning of "at least", it is still a good sign of lacking basic logics or math knowledge to think that 250% can only be made of 100 pieces of 2.5%.

Unlike you - I won't hurl an insult back at you. You can continue to believe what you think is logical.

And the 4 people that liked my post might simply agree with me. Whether or not they are Apple fans or Samsung Fans - or like me - technology agnostic.

But again - you just keep on believing what you want.

 

[SILen(e]

You're a fool if you don't think Samsung is giving such information to other parts of their company, like Samsung Semiconductors giving information about Apples SoCs to Samsung Mobile.

Proof or it is just your opinion?



Any link to that story?

http://gigaom.com/2011/09/15/samsung-manager-testifies-to-early-ipad-info-leaks/

And proof for my guess that Samsung Semiconductors and Samsung Displays is giving information about Apples orders to Samsung mobile?

Hey, that company has been cloning every detail of the iPhone and iPad, they even used screenshots of iOS-applications on one of their websites for the Galaxy Player, they are absolutely shameless and ruthless in their business practices, have bribed judges and officials in South Korea.

They created a 123 pages long document on how to clone the iPhone .



Is there ANY doubt that one of the higher-ups at Samsung Displays won't say "Hm, no, can't give you that information" when someone from Samsung Mobile asks what display Apple will be using in the next iPhone, iPad or MacBook?

 

[pirg]

http://gigaom.com/2011/09/15/samsung-manager-testifies-to-early-ipad-info-leaks/

And proof for my guess that Samsung Semiconductors and Samsung Displays is giving information about Apples orders to Samsung mobile?

Hey, that company has been cloning every detail of the iPhone and iPad, they even used screenshots of iOS-applications on one of their websites for the Galaxy Player, they are absolutely shameless and ruthless in their business practices, have bribed judges and officials in South Korea.

They created a 123 pages long document on how to clone the iPhone .



Is there ANY doubt that one of the higher-ups at Samsung Displays won't say "Hm, no, can't give you that information" when someone from Samsung Mobile asks what display Apple will be using in the next iPhone, iPad or MacBook?

Wow, I knew about the 123 page document, didn't know about the other two things.

Samsung really is a crap company

 

[Oletros]

http://gigaom.com/2011/09/15/samsung-manager-testifies-to-early-ipad-info-leaks/

And proof for my guess that Samsung Semiconductors and Samsung Displays is giving information about Apples orders to Samsung mobile?

Hey, that company has been cloning every detail of the iPhone and iPad, they even used screenshots of iOS-applications on one of their websites for the Galaxy Player, they are absolutely shameless and ruthless in their business practices, have bribed judges and officials in South Korea.

They created a 123 pages long document on how to clone the iPhone .

Thanks for the link.

And do you really believe that they need any insider information to look at the outside of the iPhone or the icons? Really? Do you think that they are so stupid that they can buy an iPhone or an iPad and they need insider information. By the way what insider information because Samsung doesn't make nor the OS nor the case

Really, do you really say with a straight face that that Maps screenshot has put to look like an iPhone?

 

[pirg]

Thanks for the link.

And do you really believe that they need any insider information to look at the outside of the iPhone or the icons? Really? Do you think that they are so stupid that they can buy an iPhone or an iPad and they need insider information. By the way what insider information because Samsung doesn't make nor the OS nor the case

Really, do you really say with a straight face that that Maps screenshot has put to look like an iPhone?

You seem to have missed the point. He's saying with Samsung's track record of copying, and giving information about the ipad before it's release, why would you trust them not to give up any other information if asked.

It's a simple inference and it's a sound one.

 

[samcraig]

You seem to have missed the point. He's saying with Samsung's track record of copying, and giving information about the ipad before it's release, why would you trust them not to give up any other information if asked.

It's a simple inference and it's a sound one.

Oh it's an inference. Whether it's sound is debatable. And I don't think Oletros missed any point. He simply disagrees with the inference.

 

[SILen(e]

Thanks for the link.

And do you really believe that they need any insider information to look at the outside of the iPhone or the icons? Really? Do you think that they are so stupid that they can buy an iPhone or an iPad and they need insider information. By the way what insider information because Samsung doesn't make nor the OS nor the case

Really, do you really say with a straight face that that Maps screenshot has put to look like an iPhone?

If you want to beat your competitor by selling the same product with some benefit the original company does not have, it helps if you know what their next product will be like.

Android smartphones (at least in the higher end sector) are often sold on tech specs - don't you think it helped Samsung to know that Apple ordered a 3.5" 960x640 display and a SoC with a PowerVR SGX 435 in 2008 or 2009?
Et voila, in 2010 Samsung releases their iPhone clone, which looks like an iPhone 3G/3GS - they had no knowledge of how the iPhone 4 might look like (well, that changed before they started the design of the Galaxy Ace), but how fortunately for Samsung, that the SGS featured a 4.0" screen and a PowerVR SGX 440 GPU, so they were selling an "iPhone" with "better" specs.

Of course are a number of the iPhones and iPads sold in South Korea shipped directly to th labs of Samsung, we know this for certain after the release of the cloning-document and it was always obvious, but having insights in developement helps with the time to market of new clones.

It's certainly no coincidence that Samsung had TWO GalaxyTab 10.1 in developement before Apple released the iPad 2.

One looked like the iPad 1 and the GalaxyTab 10.1N was released 3 months later and looked like the iPad 2^^



And about the maps screenshot:

Oh, I have the straightest face imaginable when I say that Samsung used a screenshot from an iPhone to illustrate their Galaxy Player (an iPod Touch clone, they also had some nice product images that tried to imitate the pictures Apple created to sell the iPod Touch^^).

And you won't be able to argue that "All maps look similar, there's no other way to design a map!"!

That screenshot was lifted directly from an iPhone or iPod Touch, it's featuring freaking iOS UI-elements!

Some designer at Samsung or Samsungs marketing agency googled for pictures showing a map on a smartphone, found this picture and replaced the titlebar with Androids notification bar.



@samcraig

So, Samsung is some dude who robbed a bank and shot the cashier/bank teller, he fled to his car, shot a cop dead and is now fleeing from the police in a highspeed car chase.

He ran over an old lady who tried to cross the street and wants to reach the state border to escape.

Do you really think that man will stop a few hundred meters from the border so that a familiy of ducks can cross the street safely?

 

[Oletros]

Android smartphones (at least in the higher end sector) are often sold on tech specs - don't you think it helped Samsung to know that Apple ordered a 3.5" 960x640 display and a SoC with a PowerVR SGX 435 in 2008 or 2009?
Et voila, in 2010 Samsung releases their iPhone clone, which looks like an iPhone 3G/3GS - they had no knowledge of how the iPhone 4 might look like (well, that changed before they started the design of the Galaxy Ace), but how fortunately for Samsung, that the SGS featured a 4.0" screen and a PowerVR SGX 440 GPU, so they were selling an "iPhone" with "better" specs.

If you think that they needed inside information to make the Galaxy S TWO years after the 3G then it is clear that you're not serious

It's certainly no coincidence that Samsung had TWO GalaxyTab 10.1 in developement before Apple released the iPad 2.

One looked like the iPad 1 and the GalaxyTab 10.1N was released 3 months later and looked like the iPad 2^^

WRONG, the TWO Galaxy Tab 10.1 looked the same, the only difference was that the second was slimmer. And I repeat, if you think they needed inside information to make the Tab slimmer AFTER the iPad 2 was shown, you're not serious.

And about the maps screenshot:

Oh, I have the straightest face imaginable when I say that Samsung used a screenshot from an iPhone to illustrate their Galaxy Player (an iPod Touch clone, they also had some nice product images that tried to imitate the pictures Apple created to sell the iPod Touch^^).

And you won't be able to argue that "All maps look similar, there's no other way to design a map!"!

That screenshot was lifted directly from an iPhone or iPod Touch, it's featuring freaking iOS UI-elements!

Some designer at Samsung or Samsungs marketing agency googled for pictures showing a map on a smartphone, found this picture and replaced the titlebar with Androids notification bar.

Really, if you think that the ad agency put that screenshot to look like an iPhone having Google Maps it is clear that you're not serious.

 

[predation]

does this mean i can take my iphone 4 with a wacky home button and get it exchanged for a 4s today? obviously i would pay the $149

 

[alexxxhp]

The New S

Best Phone Ever!!! What do you think?
Comes with free Ice Cream.

Can't we all just get along?

 

[alexxxhp]

Improved S

Improved and pure Innovation..

 

[kdarling]

Android smartphones (at least in the higher end sector) are often sold on tech specs - don't you think it helped Samsung to know that Apple ordered a 3.5" 960x640 display and a SoC with a PowerVR SGX 435 in 2008 or 2009?

They could only have known about the CPU.

Samsung didn't supply the retina screen for the iPhone 4. LG did.

It's certainly no coincidence that Samsung had TWO GalaxyTab 10.1 in developement before Apple released the iPad 2.

One looked like the iPad 1 and the GalaxyTab 10.1N was released 3 months later and looked like the iPad 2^^

Samsung would've had no idea what the tablet cases looked like before they went on sale. Only the case maker (Pegatron) and Foxconn would've.

They created a 123 pages long document on how to clone[/URL] the iPhone .

You know, I bet that I'm the only developer on the planet who's actually read through that document. It's not what news reporters think it is.

It was a not uncommon UI/UX review, and most of it was about figuring out how to get a nicer user experience without copying Apple.

I even took the time to check on each entry. Of 112 items comparing their UI to the iPhone's:

_ 60 were not implemented at all
_ 20 were common ideas to any phone
_ 10 were actually directly used in an S2/S3

And even most of those last ten direct "copies" were hardly critical Apple inventions. (They were suggestions like making the Call End button bigger, using a microphone for the voice recorder app, adding a camera button to the MMS app, showing the Bluetooth connection type, etc.)

Don't get me wrong. I think Samsung tried to get the same general look and feel. But they were trying to do so without direct copying. As any designer can tell you, that's harder than it sounds.

 

[samcraig]

They could only have known about the CPU.

Samsung didn't supply the retina screen for the iPhone 4. LG did.



Samsung would've had no idea what the tablet cases looked like before they went on sale. Only the case maker (Pegatron) and Foxconn would've.



You know, I bet that I'm the only developer on the planet who's actually read through that document. It's not what news reporters think it is.

It was a not uncommon UI/UX review, and most of it was about figuring out how to get a nicer user experience without copying Apple.

I even took the time to check on each entry. Of 112 items comparing their UI to the iPhone's:

_ 60 were not implemented at all
_ 20 were common ideas to any phone
_ 10 were actually directly used in an S2/S3

And even most of those last ten direct "copies" were hardly critical Apple inventions. (They were suggestions like making the Call End button bigger, using a microphone for the voice recorder app, adding a camera button to the MMS app, showing the Bluetooth connection type, etc.)

Don't get me wrong. I think Samsung tried to get the same general look and feel. But they were trying to do so without direct copying. As any designer can tell you, that's harder than it sounds.

All of the above has been stated several times on this forum (not thread) and yet the BS still continues...

 

[SILen(e]

Really, if you think that the ad agency put that screenshot to look like an iPhone having Google Maps it is clear that you're not serious.

Hm?

That screenshot IS from an iPhone and has been manipulated in photoshop to change the titlebar.
It's a screenshot that Laura Scott uploaded in December 14 2008 to Flickr.

And they did this in 2011, when even a half-brained intern ad the ad agency should have known that you shall:
1. Not take pictures from the internet to use them in your ads
2. Take pictures of the product YOU'RE selling
3. Not take pictures from the product your COMPETITOR is selling.

It's like you handed in a print of the Mona Lisa in art classes at school and said that you painted it.


This shows that Samsung simply does not care about these things.
That they have no scruples to use stuff that others created for their own benefit.