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

[typeadam]

And conversely when it's apple suing and winning (for non essential patents mind you) they're "stifling innovation", and when it's samsung suing and winning (on essential patents), "apple deserves this, take that!" It's like someone exposed the hole in your hypocritical world.




the difference of course being essential vs non essential. That's the part that makes the android victory chant seem beyond ridiculous. They're essentially (pardon the pun) cheering for stifled innovation, they're just too dim to realize it.


.

My logic comment wasn't directed at you. I was generalizing.
Lol @ my hypocritical world. Where am I being hypocritical and where did I say that it's what defines my POV? Again - generalizing.

And TBH, regardless whether I am an Android User or an iOS user, the constant volley of litigation news just gets boring after a while. Especially to "geeks" like myself who love tech for what it is - innovation - REGARDLESS of how it arrived (infringement or creativity (not saying I support infringement, just an example)).

 

[pirg]

My logic comment wasn't directed at you. I was generalizing.
Lol @ my hypocritical world. Where am I being hypocritical and where did I say that it's what defines my POV? Again - generalizing.

And TBH, regardless whether I am an Android User or an iOS user, the constant volley of litigation news just gets boring after a while. Especially to "geeks" like myself who love tech for what it is - innovation - REGARDLESS of how it arrived (infringement or creativity (not saying I support infringement, just an example)).

that was the point of my comment. You're doing exactly what you say I'm doing. There's idiots on both sides, and you're only generalizing one side.

I agree that this news is boring. I don't agree that any company should just sit back and let other companies use their patents without paying up, unless they are essential patents in which case every opportunity to come to an agreement should be pursued

I've heard that Google has a patent on the notification center. Don't know if it's true, but if they felt that apple infringed on that they have every right to sue apple.

 

[subsonix]

I'm pretty sure when I said I don't know the rate offered to other licensees that means I don't have intimate knowledge

Yeah I know, all I'm saying is, who here can really tell if the ruling was fair or not? There is room to interpret it either way.

 

[pirg]

Yeah I know, all I'm saying is, who here can really tell if the ruling was fair or not? There is room to interpret it either way.

I agree, it could very well be fair and apple could indeed like kdarling said be using the courts to get a lower rate. That's not right. But if there is an appeal I'm sure apples main argument will be to determine what is fair.

Regardless, this doesn't affect apple much but it is an interesting topic to see where this goes.

 

[samcraig]

Regardless, this doesn't affect apple much but it is an interesting topic to see where this goes.

Doesn't affect either company much. Except for legal fees. It's not like Samsung (for example) has paid any judgement yet either.

But I'm pretty sure we all know where this goes. In a circle. An unending circle. The players involve will continue to sue each other and by the time judgements are made - those products will be EOL and there will be new products that are entered as evidence/etc.

There really needs to be an "iron fist" to stop it once and for all. It's very much like tic-tac-toe. That doesn't mean I support one company infringing on patents, copyrights, trademarks, etc. But does ANYONE really see an end in sight the way things have been going? I don't.

 

[typeadam]

that was the point of my comment. You're doing exactly what you say I'm doing. There's idiots on both sides, and you're only generalizing one side.

I agree that this news is boring. I don't agree that any company should just sit back and let other companies use their patents without paying up, unless they are essential patents.

I've heard that Google has a patent on the notification center. Don't know if it's true, but if they felt that apple infringed on that they have every right to sue apple.

We must not be on the same page. I don't recall "saying" you're doing anything.. I wasn't accusing you of anything, I was commenting, or better yet, reflecting, if you wish.

1. I don't agree when Apple fans bash [insert company].
AND
2. I don't agree when [insert company] fans bash Apple.

I understand fan rivalry and brand loyalty but sometimes it gets out of hand and it makes us (yes, US, b/c I'm sure everyone took part in a little bashing at one time or another) look like juveniles or just ignorant and uninformed.

IP/patent lawsuits obviously have their place and importance - can't argue that - but it just seems like these legal matters fuel forum members like nothing else. And these forum members do not make up the majority of the consumers. In fact, I would bet that the majority of Samsung and Apple consumers either have no idea about these legal battles or don't care.

And if I sound like I'm on the fence about this, it's b/c I am. I can't back one side over the other considering both sides did their fair share of "sinning."
Yes, Apple should file any and all patent infringement suits.
Nevertheless, that right is also granted to every other company. And if companies want to sue for minor or trivial things that's their right.

It would be nice if only the really relevant things made it in front of a judge and that the injunctions, penalties, settlements, etc., were reasonable and not "I'm going to sue you so hard you'll have to sell your soul to pay me" but that's a discussion for another topic.

 

[bbeagle]

Lol I love the logic on this forum: When it's Apple suing and winning, they're in the right. When it's Apple getting sued and losing, "something must not be right."

I don't see any evidence of what you are saying on this forum.

There are more pro-Samsung comments than pro-Apple comments.

 

[omgitsbees]

And what is wrong with getting compensated for the work you perform? I would love to hire you and not pay any wages or commissions.

That is not what he is saying at all. This lawsuit doesn't benefit anyone at best, and hurts consumers at worst. There is no reason to back this, even if someone were a Samsung fanboy.

Lol I love the logic on this forum: When it's Apple suing and winning, they're in the right. When it's Apple getting sued and losing, "something must not be right." It's like someone poked a hole in your perfect world.

Not really, this forum has actually been pretty anti-patent lawsuits all around because the whole system is an absolute mess and everyone but the large corporations realize it.

 

[kdarling]

Apple obviously should not set the rate, but the rate that is offered should be comparable to similar offered rates for the same patent, don't you agree?

You're right that the rates should be comparable to what others buying the same quantity of license are paying. That's part of FRAND.

The thing is, most companies enter into patent cross-licensing contracts, which dramatically lowers the rates. Apple does not like sharing, but they appear to want the sharing rates.

Like I said I don't know what the royalties are on this patent for other licensees, but that would be an interesting discussion to have.

Here are the latest known starting negotation rates for LTE (which includes 3G licenses as well):



It is said that if a company paid the starting rate to everyone it would be over 30% Yet Nokia supposedly pays less than 3%... because they entered into cross-licensing with almost everyone. It makes a dramatic difference.

As to why it's based off the price, that was done so that higher priced devices subsidize the lower priced devices. A phone that wholesales for $30 with a mere $4 profit obviously cannot pay $15 in royalties. But a phone that wholesales for $600 and makes over $200 in net profits certainly can.

This royalty plan worked very well. It allowed almost anyone to buy a cell phone, which is why the huge world cell market that Apple profits so much from, even exists today.

 

[GermanyChris]

Who would seriously buy an iPad 2 over an iPad Mini?

Folks who want a bigger screen?

 

[typeadam]

That is not what he is saying at all. This lawsuit doesn't benefit anyone at best, and hurts consumers at worst. There is no reason to back this, even if someone were a Samsung fanboy.



Not really, this forum has actually been pretty anti-patent lawsuits all around because the whole system is an absolute mess and everyone but the large corporations realize it.

Strong join date to comment content...
But I kid..
You're right though, the forum has been more anti-legal news. (I never said it was pro.) However, what I was pointing out was individual views when these topics DO come up.

 

[samcraig]

Folks who want a bigger screen?

Well that's just CRAZY talk - who needs a bigger screen

 

[MacBram]

Apple seems to want to set the rates themselves. That's not how it works. A patent holder or judge/arbitrator gets to do that.

Recall that Apple had a case thrown out by a US judge who offered to set the rate for paying Motorola. Apple refused to go along unless it was $1 or less, which made the judge realize they were just trying to use courts to lower their rate.

Now, consider this: the last major cell phone ban from the ITC was over Qualcomm chips that it said infringed on a Broadcom patent. The royalty rate for that license was set at $6 per device (!).

Moreover, people act like Motorola or Samsung's starting negotiation rate of ~ 2.5% is high. Yet Apple pays over 3% to Qualcomm. (Q's usual rate is 3.4% these days.)

Apple pays 3 to 3.4% to Qualcomm? You must be joking! Of the cost of the Qualcomm part, maybe! Not of the retail price of the iPhone!

Samsung is asking 2.5% of the retail price of the iPhone! That's $16.25 on $650. Doesn't matter what part the supposed Samsung technology plays in the actual device or as a fraction of the build cost. Samsung is trying to hold only Apple to ransom out of all phone makers, because only Apple is making money.

If Apple pays Qualcomm anywhere near that, then it better be for all the possible essential patents having remotely to do with radio technologies, and that would indemnify Apple against the likes of Samsung.

Of course Samsung turns around to Qualcomm and says, "oh, Apple is a customer of yours? Well, those transferable licenses you signed with us for your customers are now null and void". Guys, Samsung is a snake. Samsung is on record basically saying: "we don't care about the pool of hundreds of SEPs our patent is part of to make radio standards work; without our one patent, Apple doesn't have a phone."

As for the $1 episode, Apple was basically saying: "We will settle here and now, this second, here's my checkbook, if you make it $1 per phone. Otherwise, see you in court, because we have a leg to stand on and you don't." All Samsung had to do was make a reasonable offer.

 

[typeadam]

I don't see any evidence of what you are saying on this forum.

There are more pro-Samsung comments than pro-Apple comments.

Just my observation and yes I was generalizing from what I have read. Thanks.

 

[springsup]

There seems to be confusion, where some people think that FRAND means you cannot use an injunction. On the contrary:

• The ETSI FRAND rules do not prohibit injunctions.
  
  
• Courts around the world have said that injunctions are available for SEP holders in many situations.
  
  
• Even the EU commission (which is also investigating Apple for anti-trust) has explicitly pointed out that a FRAND patent holder does not give up the right to using injunctions, except in the case where a licensee is already negotiating in good faith.
  
  
• Injunctions are most especially always available at the ITC, since they are its only enforcement power. Of note: only about 15% of ITC decisions are overturned by the Court of Appeals.

The cases where FRAND abuse has been found, were when 1) negotiations had started and/or 2) the patent wasn't submitted as FRAND in time.

You are correct that injunctions are not always incompatible with FRAND. However, Samsung and Motorola's conduct is essentially without precedent. It is very unusual that the FRAND-pledging party does not actually want a FRAND royalty license and instead tries to use their FRAND patents as leverage to shotgun a non-FRAND cross-license.

We can look at Google's draft FTC settlement as a guide. The FTC clearly say that Google should not be able to gain an injunction against a willing licensee.

Samsung and Motorola do not want to give Apple a FRAND license. Their next play then is to claim that Apple is not a willing licensee (this is false; Apple does not accept the offer that they made but definitely are willing to license valid and infringed patents for a fair royalty).

Samsung and Motorola do not want to give Apple a FRAND license. The offers they made to Apple ask for extremely high royalties (up to 2.5% of the iPhone's end price), and impose other conditions (such as not being able to challenge the validity of those patents) which the EU have already said are likely to breach anti-trust law. In other words, Apple seem perfectly correct not to have accepted those offers, and rejecting them does not make Apple an 'unwilling licensee'.

 

[Oletros]

Apple pays 3 to 3.4% to Qualcomm? You must be joking! Of the cost of the Qualcomm part, maybe! Not of the retail price of the iPhone!

And why must by joking?

As for the $1 episode, Apple was basically saying: "We will settle here and now, this second, here's my checkbook, if you make it $1 per phone. Otherwise, see you in court, because we have a leg to stand on and you don't."

As for the $1 episode, you have to inform better.

http://thenextweb.com/mobile/2012/1...torola-patents-but-no-more-than-1-per-device/

 

[samcraig]

As for the $1 episode, Apple was basically saying: "We will settle here and now, this second, here's my checkbook, if you make it $1 per phone. Otherwise, see you in court, because we have a leg to stand on and you don't."

That's not really negotiating now is it though. That's not an earnest attempt. And that's why "everyone" is in court over it.

 

[surma884]

Why are they still selling the iPad 2 and the iPhone 3GS in the US anyways? Those devices are very old and they have better alternatives (including non-Apple devices).

 

[springsup]

You're right that the rates should be comparable to what others buying the same quantity of license are paying. That's part of FRAND.

The thing is, most companies enter into patent cross-licensing contracts, which dramatically lowers the rates. Apple does not like sharing, but they appear to want the sharing rates.

Here are the latest known starting negotation rates for LTE (which includes 3G licenses as well):

View attachment 415305

It is said that if a company paid the starting rate to everyone it would be over 30% Yet Nokia supposedly pays less than 3%... because they entered into cross-licensing with almost everyone. It makes a dramatic difference.

As to why it's based off the price, that was done so that higher priced devices subsidize the lower priced devices. A phone that wholesales for $30 with a mere $4 profit obviously cannot pay $15 in royalties. But a phone that wholesales for $600 and makes over $200 in net profits certainly can.

This royalty plan worked very well. It allowed almost anyone to buy a cell phone, which is why the huge world cell market that Apple profits so much from, even exists today.

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.

This theory that higher-priced devices subsidise cheaper devices is something I've never heard before. If a $600 iPhone and a $50 Android smartphone use the exact same baseband chip (which is the only part that communicates with the network), they're using the exact same patents in exactly the same way and should pay the same rate. The price of the baseband chip is the same for both (a supplier like Qualcomm won't give you cheaper parts if your device sells for a lower price; that's like asking for cheaper petrol because you drive an older car).

Also, as for that chart, it's important to note that Nortel's patents are now owned by a consortium including Apple. So Apple does contribute patents to the standard.

Nobody except your direct competitors pay the book price.

 

[pirg]

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.

This theory that higher-priced devices subsidise cheaper devices is something I've never heard before. If a $600 iPhone and a $50 Android smartphone use the exact same baseband chip (which is the only part that communicates with the network), they're using the exact same patents in exactly the same way and should pay the same rate. The price of the baseband chip is the same for both (a supplier like Qualcomm won't give you cheaper parts if your device sells for a lower price; that's like asking for cheaper petrol because you drive an older car).

Also, as for that chart, it's important to note that Nortel's patents are now owned by a consortium including Apple. So Apple does contribute patents to the standard.

Nobody except your direct competitors pay the book price.

This was my thought too. The royalty should be on the part and not on the end price. And since everyone pays the same for the part, any fair and reasonable rate, would be fair and reasonable regardless of what the end price is. Admittedly I don't know much about the subject, but I don't see what's fair about apple (or any company) paying more than anyone else when everyone pays the same price for the part.

I understand giving someone a better deal if they cross license but with an SEP. everyone should get a fair rate. It would amaze me if that is not how it works because it makes no sense.

 

[MacBram]

The thing is, most companies enter into patent cross-licensing contracts, which dramatically lowers the rates. Apple does not like sharing, but they appear to want the sharing rates.

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.

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.

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

 

[samcraig]

Apple asks for a reasonable, non-discriminatory rate. Samsung refuses. Samsung asks for an import ban and somehow gets it.

I think this is really the crux of the issue. Did Apple really ask for something reasonable. Did they try to negotiation in good faith. Honest-to-goodness good faith. And did Samsung refuse outright? How many times were rates discussed/how hard did BOTH sides TRY to reach an agreement?

 

[kdarling]

Apple pays 3 to 3.4% to Qualcomm? You must be joking! Of the cost of the Qualcomm part, maybe! Not of the retail price of the iPhone!

Everyone, including Apple, pays Qualcomm separately for the physical chip, and then the royalty for whatever IP they use to run on the chip.

This is especially necessary with today's all-in-one chips. You would not want, for example, to buy a chip and pay for LTE or CDMA if you're not using LTE or CDMA on a particular phone.

As for the rate being based on the price of the phone, I have covered the reason for that in another post. Basic example: a 3% rate on a $100 phone ($3) would not cover the cost of a $16 chip!

In the particular case of Qualcomm, there are reports that Apple negotiated a deal where they pay royalties on the price they pay Foxconn for each iPhone, not on the actual wholesale price they charge others:

"...the royalties paid to Qualcomm are based on the price Apple pays Foxconn for each iPhone – about $244, they estimate – not the wholesale price that Apple charges carriers like AT&T for iPhones, which they say averages about $590. Assuming those prices and a 4% royalty rate, they estimate that Foxconn pays Qualcomm about $9.70 per iPhone–compared to $23.60 per phone that Apple might pay directly, based on the higher wholesale price." - WSJ - Does Apple enjoy a Licensing Loophole?

As for the $1 episode, Apple was basically saying: "We will settle here and now, this second, here's my checkbook, if you make it $1 per phone. Otherwise, see you in court, because we have a leg to stand on and you don't." All Samsung had to do was make a reasonable offer.

It was Apple and Motorola. And it wasn't up to Motorola. They said they would go along with whatever the judge decided. It was only Apple who refused.

Samsung and Motorola do not want to give Apple a FRAND license. The offers they made to Apple ask for extremely high royalties (up to 2.5% of the iPhone's end price), and impose other conditions (such as not being able to challenge the validity of those patents) which the EU have already said are likely to breach anti-trust law. In other words, Apple seem perfectly correct not to have accepted those offers, and rejecting them does not make Apple an 'unwilling licensee'.

As for the particular example of challenging validity, a US judge ruled last year that the sheer fact that Apple wanted to reserve the right to do so, not only might make it an unwilling licensee, but also make it valid for the patent holder to raise the price.

The real problem going on right now is that injunction restrictions are new, depend on the jurisdiction, and came AFTER Samsung/Motorola tried for injunctions. Governments need to make the rules clear first, then prosecute.

Cheers!

 

[Oletros]

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

Any thing to back this? Can you show what is paying everyone else?

 

[Iconoclysm]

My home is Apple-free, and has a 60" Samsung TV and several Android devices from Samsung.

Aha, so that's why you're on an Apple forum...nothing interesting in the ecosystem you're tied to.