Samsung Loses $1 Billion in Market Value After U.S. Veto on Apple Ban, Files Appeal Against Patent Ruling

[Chupa Chupa]

Laws are laws; whether the patent battles are silly or not, a judge rules that a sales ban was necessary and the US government just went over their heads.

You can't logically use the argument "laws are laws" and then state the U.S. went over the judge's head as if it was a rogue effort.

It's the U.S. President's legal right to veto an ITC decision. See: 19 U.S.C. § 1337(j). (If you don't know what that is its a legal site to the U.S LAW that gives the president veto power here -- laws are laws, right?).

Sigh, the president hasn't done anything, it was his ADMINISTRATION who dealt with it all...

Confused by this. The ITC itself is independent of the administrative branch and only Obama, as the U.S. President, has the power to veto an ITC decision. So what exactly do you mean when you say it was his administration that dealt with it? I don't follow as far as the ITC decision and veto are concerned.

 

[SuperKerem]

Great news

 

[duffman9000]

Is 1 billion dollars in market value a lot of money?

 

[Georgij]

The number of people who completely do not know what Samsung did here is mind boggling. The patents in question relate to the 2G/3G GSM/UMTS radios in the Apple products. These were provided by Infineon who had legally licensed the patents from Samsung, including the licensing on behalf of another company that their (Infineons) products were part of. After the success of the 3G/3GS/4, Samsung made the unilateral decision to invalidate the contract that Infineon had for the patents, and then asked Apple for a crazy amount (2.4 or 2.7% depending on where you read it) for each phone sold, and that was to be determined against the ENTIRE cost of the phone (almost $16 for a 16GB model!)! Are you NUTS! They could certainly ask for 2.4% of the cost of the part from Infineon, which was estimated at $11.72, which would have amounted to about 28 cents per phone, but NOT the whole cost of the iPhone. Not realistic and not fair. I would never agree to such robbery either. That is certainly NOT negotiating in good faith by Samsung.

I totally agree with you. It blows my mind how people comment on things they have no clue about.

 

[pirg]

These companies need to grow up.

Remember the 90s, with the Apple vs Microsoft battle? They made a stock deal, shared some intellectual property, and all has been well since.

Why not do the same thing with Samsung? Surely that would have a far better financial impact for both companies than wasting billions on this silly patent war.

Because Samsung wanted to make more money off apple products then their own

I'm being tongue in cheek but the whole point of this battle was that Apple felt they were not being offered fair rates for frand licensing by samsung.

 

[gnasher729]

Well, Apple was found guilty of infringing on Samsung patents. So it was Apple copying Samsung in this case, not the other way round. Honestly, if I were Samsung, I'd probably stop doing business in the US, as the US no longer offers legal equality. US laws apparently only apply to US citizens - if you're a foreigner or a foreign company living in the US or doing business there, you're toast.

It's not quite like that. Samsung has to make these patents available to everyone, including Apple, under fair and non-discriminatory conditions. So if Samsung isn't doing that, what is Apple supposed to do? Not build a phone? Pay extortion money? Or use the patent and let the courts sort out what "fair and non-discriminatory" means?

I think quite recently the Google owned Motorola has been suing Microsoft to get $4 billion in a similar situation, and was finally awarded $2 million, which is 0.05% of what they were asking for. Samsung's situation is quite similar.

 

[rjohnstone]

The ITC ruled that Samsung was negotiating in good faith and that it was Apple who walked away from the table.
The President is playing protectionism politics and it will come back and bite him (politically) in the future.
Remember... FRAND does not mean Free.
And anyone arguing about the deal Samsung had with Infinion fails to understand what the deal was.
It was renewal time and Samsung was under no obligation to renew the licensing deal under the previous terms.

 

[Michael Goff]

I hate SS because they blatantly ripped off Apples design's and on top of that, continue a deceptive and corrupt practice of lies, deceit and illegal activities, especially in Korea. On top of that, their President has already been convicted of corruption charges in the past.

Great company there they have.

At least MS has their own look with their devices and OS.

They did in the past, and they got punished for it. If you can look at modern touchwiz and get it confused for iOS? That says something, but not about Samsung.

 

[Hattig]

Samsung has clearly not managed to buy itself into the white house just yet. It's a signal that they need to do more. There'll be a Samsung factory on US soil soon, just wait for it....

There are Samsung fabs in the USA already IIRC.

I don't think that either company has bought this judgement. Clearly the whole idea of SEP needs some thinking about at the government level because it's a real mess of litigation, and clearly some patent pools are an expensive club for new entrants - which whilst the terms are fair and non-discrimatory under one definition (hey, you all get the same raw deal, and btw you're the only one in this raw deal club), they clearly barking under another (full retail price).

SEP patents in a pool should be purchased at a fixed rate per device, maybe there could be volume discounts, maybe up front fee as well. An external entity to the patent owners should manage the licensing outwards. People contributing to the pool get paid back (so for contributors the pool is cheap or free or a net gain).

 

[Solomani]

The South Korean government has also criticized the decision, saying it had "concern over the possible negative impacts that this kind of decision could have on Samsung Electronics' patent rights".

South Korean government comes to the defense of Samsung... just as US government is defending Apple. Yup, no surprise here. An ugly battle indeed.

 

[Sellewiet]

I remember a while back that Apple had issued an import ban against HTC (which was already struggling amidst giants like Samsung and Apple) and a couple of months HTC couldnt sell phones in the US. But now it's the other way around and the US vetos the decision because for once it's not in their advantage? You can't have it both ways: either you let the market be free and let everybody do what they want, or you listen to EVERY decision the ITC finally makes. Come on USA, have some integrity.

 

[Solomani]

I think you mean FRANDemies.

LOL good one.

 

[oliversl]

Samsung is suing Obama now?

 

[Gasu E.]

Laws are laws; whether the patent battles are silly or not, a judge rules that a sales ban was necessary and the US government just went over their heads.

You are confused by the title "judge", understandably so. The President cannot override the Judicial branch via veto. These "judges" are not part of the Judicial branch-- they are adminstrative law judges, which is something else entirely. They are entirely subject to a veto by The President's Trade Representative.

 

[gnasher729]

Some people failed to understand the importance of this case. If you allow this ban to happen on some trivial patent that's standard/essential, a lot of companies will copy the same tactics to hinder their competitors. That'll definitely hurt the consumers.

Just saying: The question is not at all whether these patents were trivial or not. Nobody has looked at that question at all. The question is whether they were standard essential or not.

----------

I also read that the govt. wanted them to settle this financially not with threats of import bans. As others have said these two companies have to stop already. Mind you I agree with the veto after having read that article, but the govt. stepping in is like your parents coming to your aid in a playground dispute.

It's more like your parents coming to your aid against your older brother who claims to have authority in a playground dispute.

 

[Gasu E.]

Yes it is a HUGE mistake by the ITC, but this is something that should have been further appealed and disputed in it's proper place. It should have gone through the proper channels.

This was the proper and only place to dispute. There is no other appeal route available for an ITC decision such as this other than to request a veto by the President's US Trade Representative. This was the proper, and only, channel.

 

[Solomani]

Samsung is suing Obama now?

If this escalates any further, the Republic of Samsu.... errr I mean, the South Korean republic will soon be inviting Edward Snowden to Seoul and grant him permanent asylum*, just to spite the US government.


* Snowden was only granted a (temporary) 1-year asylum stay in Russia (which may or may not be renewed after 1 year)

 

[osofast240sx]

I remember a while back that Apple had issued an import ban against HTC (which was already struggling amidst giants like Samsung and Apple) and a couple of months HTC couldnt sell phones in the US. But now it's the other way around and the US vetos the decision because for once it's not in their advantage? You can't have it both ways: either you let the market be free and let everybody do what they want, or you listen to EVERY decision the ITC finally makes. Come on USA, have some integrity.

Yep and apple makes more profit off HTC phones than HTC. ITC was clearly in the wrong on this one.

 

[Todd B.]

You want less competition? Notice how Samsung is the only company that is real competition for Apple in the mobile space. They're the only ones making real money.

Maybe that's why you hate them.

Samsung is not competition.

Competition involves more than taking out the photocopiers and making a poor imitation of last years iPhone model.

 

[gnasher729]

What about what happens to companies that invest in developing patents that become SEP?

Why put your patent into a SEP pool if that means anyone can steal it and never pay, and be protected by their government?

It's a really damaging precedent.

But you don't have to put your patents into such a pool. The problem is that if you don't, everyone in the industry will work together to change the standard in question so that your patents are not required. And if that isn't possible, then the standard won't become a standard.

Imagine a company having patents that are essential to implementing the next phone standard and refusing to license these patents. They would have a monopoly. Now imagine _two_ companies refusing to license their patents. You have - nothing. Nobody would be able to build any product. That's the problem that an FRAND pool gets around.

And Apple cannot "steal and never pay". They have the right not to give in to extortion, but they will have to pay at a fair and reasonable rate.

 

[Gasu E.]

The power to veto is also part of the laws of the land. Checks and balances or something

LOL. The President does not have to power to veto the Judicial branch-- the US courts-- that is NOT part of checks and balances.

But the ITC is not part of the Judicial branch. It is subject to the President's veto.

A lot of people are not getting that this veto was a. totally legal, b. nothing to do with your usual perception of courts, and c. the only remediation available under the current law-- there is no 'court of appeals' for these rulings.

 

[cogitodexter]

The South Korean government has also criticized the decision, saying it had "concern over the possible negative impacts that this kind of decision could have on Samsung Electronics' patent rights"

If Samsung weren't trying to extort money on the basis of patents that are, in fact, exhausted then the SK government might have a point. In this instance though, my only reaction is to think "scr** Samsung's patents" if that's what they're going to try and do with them.

 

[duffman9000]

The ITC ruled that Samsung was negotiating in good faith and that it was Apple who walked away from the table.
The President is playing protectionism politics and it will come back and bite him (politically) in the future.

He doesn't have much of a political future besides campaigning for future Democrats. Who in the Senate or House would back Samsung over Apple?

 

[Gasu E.]

Read The Letter From the Trade Reprt

Everyone who wants to have an informed opinion on this should read the ruling by the US Trade Representaive. It outlines the law behind the ruling, the reason for the ruling, prior statements on policy, etc. It's pretty light reading.

 

[Michael Goff]

Samsung is not competition.

Competition involves more than taking out the photocopiers and making a poor imitation of last years iPhone model.

The Galaxy S4 looks like last year's iPhone to you?

Really?