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kdarling

macrumors P6
The royalty base is an issue that is being disputed. The established way to do this is to base it on the smallest saleable unit which infringes those patents. In a smartphone, that would be the cost of the baseband chip.

Right, and it makes sense, but it's a relatively new legal concept as applied to these particular patents.

This theory that higher-priced devices subsidise cheaper devices is something I've never heard before.

Yet that is exactly how ETSI FRAND patents have been licensed for the past two decades. Knowing this is key to understanding the background of the cases.

In that way, Apple is not being treated any differently than other licensees.

On the contrary, it's Apple who WANTS to be treated differently. They do not want to pay per price like everyone else has for years. They do not want to play by the rules. They want to change the rules so they make more profit.

This is totally understandable, but it does not make them the victim.
 

pirg

macrumors 6502a
Apr 18, 2013
618
0
Right, and it makes sense, but it's a relatively new legal concept as applied to these particular patents.



Yet that is exactly how ETSI FRAND patents have been licensed for the past two decades. Knowing this is key to understanding the background of the cases.

In that way, Apple is not being treated any differently than other licensees.

On the contrary, it's Apple who WANTS to be treated differently. They do not want to pay per price like everyone else has for years. They do not want to play by the rules. They want to change the rules so they make more profit.

This is totally understandable, but it does not make them the victim.

Ok making more sense now. So really all it boils down to is did samsung offer a reasonable fair rate and was apple really willing to accept a reasonable and fair rate.

We'll find out at appeal if we don't get the obama veto hammer ;)
 

MacBram

macrumors regular
Jan 28, 2002
132
28
Zeeland, Nederland
Yet that is exactly how ETSI FRAND patents have been licensed for the past two decades. Knowing this is key to understanding the background of the cases.

I can understand the subsidy theory as it applies within one company: ie. Samsung has a portfolio of products ranging from low end to high end. The average Samsung pays per device is therefore in the middle.

I cannot quite see how the theory could be or should be applied across an industry in which most competing companies are losing money due to incompetence, and one or two are making some money due to the desirability of their high-end products. It's not Apple's fault that most phone makers can't come up with a profitable product and sell it without BOGOF offers. In fact, it is arguably down to Apple that customers expect more from their "phones" in the first place.

BTW Apple gets high margins precisely because they concentrate on one high-end product, and having actually sold what they had hoped, they continue to make it a further two years and continue to sell hundreds of millions more -- that is good business; it makes the per-unit-price for them come down. Why should this fact subsidize Apple's failing competitors?

Yes, it is perfectly understandable Apple wants to be treated differently. So, one question is whether, in fact, these are the "rules", and that Apple is, as you claim, breaking some kind of rule. I guess we shall see.

And not doing something just because it has been done that way for the last two decades is one of Apple's strengths. Yet, I doubt Apple is playing cavalier here (a trait more applicable to Samsung); Apple is familiar with SEP duties having its own patents as parts of H264 and H265 video, MPEG, Firewire, etc.

Of course the part is paid for and the license is paid on top, I never suggested otherwise; just that the negotiation is done around the part using the patent (as you seem to agree when you note that the deal between Apple and Qualcomm was at the manufacturing level, not the retail level).

Yet Samsung clearly wanted a percentage of retail price (and apparently on top of or apart from whatever was normally negotiated with Qualcomm). I am sure Apple never came out and said that a high-end Sony broadcast camera should subsidize the likes of $50 Flip cameras, trying as one member of the MPEG group to get 2% of $50,000 off Sony... as though a "reasonable" royalty rate is somewhere around 2% of the average cost (wholesale or otherwise) of all video cameras on the planet.
 
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kdarling

macrumors P6
The key distinction being that the patents cross-licensed are typically all SEP patents. Samsung demanded that Apple cross-license Apple's own distinguishing patents with them. Apple rightly refused.

Apple had the right to refuse, but that also means they'll have to pay more than an entity that cross-licenses.

For example, when Apple settled with Nokia, they reportedly cross-licensed some IP to get lower rates.

Samsung cannot then refuse to license SEP patents to Apple, because that is not what SEP and FRAND terms are all about. Apple asks for a reasonable, non-discriminatory rate. Samsung refuses. Samsung asks for an import ban and somehow gets it.

Apple asked for a rate without cross-licensing, then failed to enter into any arbitration or negotiation as ETSI rules suggest. So they got banned.

No, the 2.5% of retail is not reasonable because it is totally out of line with everything else.

Not in the ETSI world. Please see the chart I posted.

And your idea that high-end is supposed to subsidize the low end is a little out of whack. What if the low end is barely a phone and the high-end is a computer with a phone function? It's like saying, "hey, I have this patent on bath drains, I think I will get every swimming pool maker to pay 2% of the retail cost of their swimming pools."

It's not my idea. It's the way it's been done for over two decades.

Heck, before ETSI stepped in, back when Motorola owned more than half the GSM patents, they only had two license methods. Either you bought their hardware, or you cross-licensed everything. No monetary license was even possible.

Here are the ETSI FRAND licensing rules:

(A contributor must be) prepared to grant irrevocable licences on fair, reasonable and non-discriminatory terms and conditions under such IPR to at least the following extent:

● MANUFACTURE, including the right to make or have made customized components and sub-systems to the licensee's own design for use in MANUFACTURE;
● sell, lease, or otherwise dispose of EQUIPMENT so MANUFACTURED;
● repair, use, or operate EQUIPMENT; and
● use METHODS.

The above undertaking may be made subject to the condition that those who seek licences agree to reciprocate.


- ETSI IPR Policy

That's it. That's all the ETSI rules mention for rates.

What is not clear is if the final sentence refers only to other ETSI patents, or to all patents. However, it is public knowlege that if a licensee did not have related patents to share, they have often instead cross-licensed other types of IP (e.g manufacturing patents etc) to lower their rates.
 
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cjmillsnun

macrumors 68020
Aug 28, 2009
2,399
48
Ah yes, thank you :)

But my guess is that the cheaper iPad 2 will be replaced with the iPad 3 or 4 once the iPad 5 comes out. Kind of like what Apple did with the iPhone 3GS, and what they will do with the iPhone 4 when the iPhone 5S comes out. So really, none of these products will be for sale by Apple by the time this takes affect.

iPad 3 infringes... I suspect iPad mini will become the bottom end.
 

xcodeaddict

macrumors 6502a
Mar 2, 2013
602
0
This thread is hilarious in parts, and tedious in whole. Regardless of whether some of Samsungs designs "look like" iOS designs or not, they're still using Android, not iOS... and Samsung's cut of Android is, at best, a very poorly executed joke. If your purchase knowledge is so sparse and ignorant as to think you own a device which is "as good as" an iPhone, just because it uses a few parts that look (garishly) similar... then I laugh, with a respectful, non-mocking "come ON now, seriously?" laughter.

In the UK, we have these young men called "boy racers" who take rust-bucket OLD, OLD cars, and spray paint them and put fibre glass body kits all over them, to attempt to fool themselves into thinking they're driving a premium sports car... can you see the analogy here?

I don't care if Android sells more - MacDonalds sell more burgers than a premium steak restaurant... but so what?
 

MacBram

macrumors regular
Jan 28, 2002
132
28
Zeeland, Nederland
Apple had the right to refuse, but that also means they'll have to pay more than an entity that cross-licenses.

For example, when Apple settled with Nokia, they reportedly cross-licensed some IP to get lower rates.



Apple asked for a rate without cross-licensing, then failed to enter into any arbitration or negotiation as ETSI rules suggest. So they got banned.



Not in the ETSI world. Please see the chart I posted.



It's not my idea. It's the way it's been done for over two decades.

Heck, before ETSI stepped in, back when Motorola owned more than half the GSM patents, they only had two license methods. Either you bought their hardware, or you cross-licensed everything. No monetary license was even possible.

Here are the ETSI FRAND licensing rules:



That's it. That's all the ETSI rules mention for rates.

What is not clear is if the final sentence refers only to other ETSI patents, or to all patents. However, it is public knowlege that if a licensee did not have related patents to share, they have often instead cross-licensed other types of IP (e.g manufacturing patents etc) to lower their rates.

Fair enough. It'll be interesting to see how this plays out.
 

Oletros

macrumors 603
Jul 27, 2009
6,002
60
Premià de Mar
In the UK, we have these young men called "boy racers" who take rust-bucket OLD, OLD cars, and spray paint them and put fibre glass body kits all over them, to attempt to fool themselves into thinking they're driving a premium sports car... can you see the analogy here?

I don't care if Android sells more - MacDonalds sell more burgers than a premium steak restaurant... but so what?

Still with those stupid and wrong analogies?

Well, if you're happy thinking that your products is superior to others, the feel happy.
 

xcodeaddict

macrumors 6502a
Mar 2, 2013
602
0
Still with those stupid and wrong analogies?

Well, if you're happy thinking that your products is superior to others, the feel happy.

"Superior" != plain "better".

I don't think I, or any Apple user is "superior" to the user of another device, but yes - I DEFINITELY think Apple devices are better, to the point of being on a different plane to Android and Win7 entirely.

If they weren't better, they wouldn't cause such a frenzy of anticipation, because we all KNOW that something great is coming, denial or not.
 

samcraig

macrumors P6
Jun 22, 2009
16,779
41,982
USA
It's not Apple's fault that most phone makers can't come up with a profitable product and sell it without BOGOF offers. In fact, it is arguably down to Apple that customers expect more from their "phones" in the first place.

BTW Apple gets high margins precisely because they concentrate on one high-end product,

To be fair - if EVERYONE followed Apple's model - the cell market wouldn't succeed because it would be leaving many people without the ability to own a phone.

You can't have every company making ONE phone and have it be high end. And priced as such.

Further - the one thing some people (not saying you) fails to really accept is that the iPhone would not exist had it not been for other manufacturers spending YEARS of R&D, $$, and creating varieties of phones. Nor the carriers who also helped "groom" customers into increased costs and services. Without everything that came before - Apple wouldn't have been successful.
 

subsonix

macrumors 68040
Feb 2, 2008
3,551
79
To be fair - if EVERYONE followed Apple's model - the cell market wouldn't succeed because it would be leaving many people without the ability to own a phone.

If EVERYONE followed Apple's model, there would be a huge business opportunity for someone to sell low cost phones. That's why EVERYONE isn't following Apple's model, and your point is moot. :D
 

samcraig

macrumors P6
Jun 22, 2009
16,779
41,982
USA
If EVERYONE followed Apple's model, there would be a huge business opportunity for someone to sell low cost phones. That's why EVERYONE isn't following Apple's model, and your point is moot. :D

Exactly my point. Did you see what comment I was REPLYING to?

By the way (and I admit I only learned this a few years back) - that expression (moot) is wrongly used.

http://litreactor.com/columns/20-common-grammar-mistakes-that-almost-everyone-gets-wrong

Moot
Contrary to common misuse, “moot” doesn’t imply something is superfluous. It means a subject is disputable or open to discussion. e.g., The idea that commercial zoning should be allowed in the residential neighborhood was a moot point for the council.
 

2IS

macrumors 68030
Jan 9, 2011
2,938
433
Samsung copied off Apple on the test.
Apple told some teachers.
Now you think it's okay for Samsung to tattle on Apple to the teachers?

Good logic there. Apple didn't start it - Samsung did.

Samsung isnt wrong to defend itself no matter how hard you want to play the "two wrongs don't make a right" card. But most see right through that BS and recognize what you're really saying is "It's ok if apple does it" you might be able to fool yourself but you aren't fooling me.

Like i said, its very telling how you avoided my initial question to you. Speaks volumes.
 

subsonix

macrumors 68040
Feb 2, 2008
3,551
79
Exactly my point. Did you see what comment I was REPLYING to?

No. :D

By the way (and I admit I only learned this a few years back) - that expression (moot) is wrongly used.

http://litreactor.com/columns/20-common-grammar-mistakes-that-almost-everyone-gets-wrong

Moot
Contrary to common misuse, “moot” doesn’t imply something is superfluous. It means a subject is disputable or open to discussion. e.g., The idea that commercial zoning should be allowed in the residential neighborhood was a moot point for the council.

That's it's historical use, from the free dictionary I find:

But in the mid-19th century people also began to look at the hypothetical side of moot as its essential meaning, and they started to use the word to mean "of no significance or relevance." Thus, a moot point, however debatable, is one that has no practical value.
 

samcraig

macrumors P6
Jun 22, 2009
16,779
41,982
USA
Samsung copied off Apple on the test.
Apple told some teachers.
Now you think it's okay for Samsung to tattle on Apple to the teachers?

Good logic there. Apple didn't start it - Samsung did.

No - that analogy is wrong.

More like

Apple some teachers that Samsung copied off their test.
Some of those teachers agree. Some don't. Based on the evidence and criteria.
Both Samsung and Apple continue to argue their position

That is one CASE.

Unrelated except it involves the same parties...

Samsung reported Apple to some teachers because Apple was using Samsung's pencil without paying the same or fair usage rate that other kids who used Samsung's pencil was. And when both parties tried to negotiate what was a fair fee, they couldn't reach a consensus - they they asked the teachers to help them decide.

But ultimately - analogies fail anyway. Because they are never the exact same as what is actually the issue. They may be SIMILAR - but are not the same.

----------

No. :D



That's it's historical use, from the free dictionary I find:

So is our discussion of moot - moot - or not moot? :eek:
 

parish

macrumors 65816
Apr 14, 2009
1,082
2
Wilts., UK
Basically, Samsung is guilty of abusing Standard Essential patents, as usual. What Samsung invariably claims is that their patent(s) are not part of the pool of "Standards Essential" patents subject to FRAND terms despite all the evidence and declarations upheld elsewhere; but Samsung nevertheless claims their patent is essential to the technology that Apple is evidently using in certain products (allegedly "by definition" if an Apple product is claimed to do x,y,z), and therefore Samsung claims Apple must be infringing on the patent.

Apple is disputing that Samsung has a patent that is "essential" to the technology, and yet is somehow not an internationally recognized Standards Essential patent subject to FRAND terms. IF this is even remotely the case, then Apple has done its own work and implemented its own technology to accomplish the same job. Likely, the patent in question has already been declared a Standards Essential Patent subject to FRAND terms elsewhere and for other companies who already license it.

Any patent on specific technology absolutely required by everyone in the business would be/should be deemed a Standards Essential patent that is licensable under FRAND terms. It's just that Samsung/Korea, etc. recognize their international obligations only when it suits them, but are happy to both apply their own rules cavalierly in their own country and play upon bodies like the ITC in other countries. It's shameful. Here we have the ITC looking out for the interests of a cavalier Korean company who has no regard for international declarations, obligations or the rule of law anywhere, including in its own country. It's like dealing with terrorists -- the ITC should have no dealings with them whatsoever. Apple follows all the rules but has to compete with those who follow none.

Thanks for explaining it. Of course irrespective of which company wins or loses we, the consumer, always lose as these horrendously expensive lawsuits are funded by our hard-earned $$$/£££/€€€ :mad:
 

tongxinshe

macrumors 65816
Feb 24, 2008
1,064
651
I'm not arguing that it's fair, but rather suggesting that Apple shouldn't be above playing by the rules.

Apple did try to play by the rules, it's Samsung that intentionally trapped Apple into the situation. A 2.4% rate for this one patent is purely trying to irritate Apple into a "you're crazy, I'm simply ignoring you" outrageous mood. And, Samsung's tactic worked well this time. It's a pity to see this type of evil tactics to play successful role, though.
 

samcraig

macrumors P6
Jun 22, 2009
16,779
41,982
USA
Apple did try to play by the rules, it's Samsung that intentionally trapped Apple into the situation. A 2.4% rate for this one patent is purely trying to irritate Apple into a "you're crazy, I'm simply ignoring you" outrageous mood. And, Samsung's tactic worked well this time. It's a pity to see this type of evil tactics to play successful role, though.

You can easily argue the antagonism was the reverse. We really don't know. So rather than say Company X vs Company Y is evil - just accept that NEITHER company could reach an agreement.
 

tongxinshe

macrumors 65816
Feb 24, 2008
1,064
651
Any thing to back this? Can you show what is paying everyone else?

The clear fact can be deducted very very easily with a very simple calculation -- if you apply a similar rate (2.5% for one patent) to all of the other patents involved in the phone, Apple would have to pay at least 250% of its revenue for the patents held by other companies.
 

samcraig

macrumors P6
Jun 22, 2009
16,779
41,982
USA
The clear fact can be deducted very very easily with a very simple calculation -- if you apply a similar rate (2.5% for one patent) to all of the other patents involved in the phone, Apple would have to pay at least 250% of its revenue for the patents held by other companies.

Your math and logic are wrong.
 

tbrinkma

macrumors 68000
Apr 24, 2006
1,651
93
Pay attention, it is a FRAND patent, so the "Fair" and "Reasonable" part have to apply to the license rate. 2.4% of the whole device for this one patent? Really? Are you suggesting Apple to pay 240000% of their revenue for the 10k patent involved? These are all-in-one devices.

I'm not arguing that it's fair, but rather suggesting that Apple shouldn't be above playing by the rules.

If you aren't arguing that the suggested licensing rate is fair, then you are suggesting that, perhaps, Apple is right to not commit to that rate for a patent encumbered with FRAND (Fair, Reasonable, And Non-Discriminatory) licensing obligation.

Again, if the rate isn't fair, Samsung is violating the FRAND obligation it willingly took on when getting that patent included in the cellular standard. If that's the case, then Apple *is* playing by the rules.
 

tbrinkma

macrumors 68000
Apr 24, 2006
1,651
93
Well, European Courts in the United Kingdom and the Netherlands completely disagreed with that and found that Samsung did NOT copy Apple's "rectangle with rounded corners" design. The last ruling in this regard only happened a few days ago and was made by the Dutch supreme court.

I'm amazed by the people who can't seem to grasp that:
  1. Different countries have different laws. Different laws applied to the same facts, can (and should be expected to) produce different rulings.
  2. EU laws, and US laws differ. Often in significant ways.
  3. Thus, it is no surprise that EU law and US law produced different rulings when applied to the same facts.
 

samcraig

macrumors P6
Jun 22, 2009
16,779
41,982
USA
I'm amazed by the people who can't seem to grasp that:
  1. Different countries have different laws. Different laws applied to the same facts, can (and should be expected to) produce different rulings.
  2. EU laws, and US laws differ. Often in significant ways.
  3. Thus, it is no surprise that EU law and US law produced different rulings when applied to the same facts.

Ok. But where in his post does he not grasp that. He simply stated that the EU courts didn't agree. That's pretty factual.
 
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