Samsung Reprimanded Over Use of Standards-Essential Patents for Import Ban

[Imhotep397]

How is this different than Apple wanting to ban Samsung products?

The difference is that Samsung agreed to and is legally bound by the terms of FRAND for the patents in question. Apple never proposed or agreed to the idea of the capacitive touch mobile computer with phone capabilities existing under standards essential patent terms, yet Samsung and other phone manufacturers use them without paying any patent fees whatsoever without being pressured with extremely aggressive litigation.

The reason this all has become a sh@#!storm of lawsuits is basically because Apple attempted to negotiate with companies out of court in the first 2-4 years of the existence of the iPhone. Once the phone manufacturers ignored Apple, copied the phone and the market shifted to 90% of mobile phone users were using smart iphone clones it became an issue of market manipulation. The only way Apple really gets out of this eventually owning what they created in the first place is if smartphone sales nosedive and don't account for 90% of the mobile phone market. At that point Apple wouldn't be accused of monopolistic tactics in litigation proceedings. With the cost of data plans for these phones being insane or reasonable for a short period of time and then insane it could happen.

 

[2457282]

The coverage and debate on this topic is often too simplistic.

For one thing, Samsung did nothing illegal requesting the ITC import ban over FRAND patents, otherwise the request would not even have been accepted. It has been a standard legal move for decades. It's only in the past year that the DOJ began to push for not allowing them.

The main article also left out a critical beginning phrase from the DOJ statement:

"While there are certain circumstances where an exclusion order as a remedy for infringement of such patents could be appropriate, in many cases there is a risk ..."

What are the "certain circumstances"? Well, when the US Trade Representative overruled the ITC ban, he noted that a failure to negotiate was a valid reason for an import ban request:

View attachment 460065

And in fact, a lack of Apple good faith negotiation is what the ITC used as its main basis for the import ban:

View attachment 460064

Thus the ITC import ban decision was actually in line with the DOJ's public stance. So why overturn their ruling? Was it a legal turf war between the DOJ and ITC? A Presidential fear of iPhone buyer backlash? That's for history to decide.

One good outcome of all this, is that the DOJ has come up with clearer guidelines for the future. In particular, these rules spell out time limits. If a potential licensee fails to negotiate within a certain time period, the patent holder can then ask for arbitrated rates. If the licensee still fails to pay those, then an injunction is allowed.

If used, such time limits and forced arbitration will hopefully prevent long, drawn out court battles, and be fairer to all parties.

Great, well thought out response. The only question I have here, is about the initial negotiation before forced arbitration. In this case it looks like there was some level of an attempt but apple and Samsung did not agree on the license fee. So the question is if there are guidelines for determining what is fair and reasonable? I am assuming that Samsung went in hight thinking it would negotiate to a point that they believed to be fair and reasonable. At the other end apple probably went in low ready to negotiate to what they felt was fair and reasonable. So why were their limits so far of that they were unable to agree? Who determines that patten x is worth $1/device while another is worth $2/device? I am not a proponent on government meddling, but some guidelines by the industry or DOJ would help initially and certainly in arbitration.

 

[camnchar]

The coverage and debate on this topic is often too simplistic.

For one thing, Samsung did nothing illegal requesting the ITC import ban over FRAND patents, otherwise the request would not even have been accepted. It has been a standard legal move for decades. It's only in the past year that the DOJ began to push for not allowing them.

<SNIP>

One of the best posts I've seen on the subject. Thanks and +1.

 

[kdarling]

The difference is that Samsung agreed to and is legally bound by the terms of FRAND for the patents in question.

Yes, they are. However, the FRAND terms they signed are not as complicated as people think. Here are the actual ETSI rules for licensing:



That's it. The rates and other contract details are left up to the patent holder. (This works out, because if the rates are too high, the other members will find another method to use.)

Note that the rules explicitly allow reciprocal licensing to be a basis for rates. It's extremely common to do this. As a major example, years ago when cellular first began, Motorola... who owned over half the SEPs at the time... had no cash license rate at all. They only accepted full cross-licensing.

More importantly in this case, Apple is also a member of ETSI, and is bound by the same rules.

In fact, a major reason why the ITC imposed the ban was because Apple failed to follow the same set of rules that they demanded Samsung follow.

(One of the rules was that Apple should've at least gone to ETSI for help finding arbitration. But they did not.)

 

[kdarling]

Samsung has been reprimanded by the U.S. Justice Department...

Can you please point to where in the DOJ statement that they "reprimand" Samsung? I can't find it. Thanks!

So the question is if there are guidelines for determining what is fair and reasonable? I am assuming that Samsung went in high thinking it would negotiate to a point that they believed to be fair and reasonable. At the other end apple probably went in low ready to negotiate to what they felt was fair and reasonable.

You're correct about how it began.

Samsung started negotiations with a high royalty rate based on the entire device cost.

Apple responded with a lowball rate based on the market price of one chip.

So far, so good. Typical starting moves, and everyone expected the negotiations to continue from there.

However, even though Samsung continued to make a few lower offers, Apple refused to make counter-offers or engage in arbitration, and that's why the ITC imposed the ban. As the Judge put it, it was not up to Apple to unilaterally decide what was a fair price.

So why were their limits so far of that they were unable to agree? Who determines that patten x is worth $1/device while another is worth $2/device?

Good question. Many SEP holders do publish their initial offer rates. They rarely tell what the final negotiated rates are, though.

In this case, an initial problem was that Samsung had never before needed to come up with a rate that didn't include at least some kind of cross-licensing.

Everyone else cross licenses to get low or even zero rates. Even small companies with no smartphone patents to offer, will usually get a deal by cross-licensing their manufacturing patents.

Mind you, I'm sympathetic to Apple not wanting to cross license. However, they wanted to get the same low rates as others, but without any cross licensing. That's neither fair nor non-discriminatory to those who did cross license.

I am not a proponent on government meddling, but some guidelines by the industry or DOJ would help initially and certainly in arbitration.

You would think. Yet companies on both sides really dislike the idea of letting the government set rates.

Apple avoids this as well. For instance, when Wisconsin District Judge Crabb offered to determine a FRAND royalty rate for Apple to pay Motorola, Apple's lawyers backed off and said they'd only agree if her rate was $1 per phone or less.

So, just as Judge Posner had done a few months previously, Judge Crabb dismissed Apple's FRAND complaints with prejudice. She said it had become clear that Apple was only using the legal system to try to get lower rates, not to just get fair rates.

 

[mccldwll]

How is this different than Apple wanting to ban Samsung products?

You post nonstop anti-Apple. How many won in a dollar?

 

[goobot]

Screw all these idiotic patent wars. More competition is good in this industry. We don't want one player to own it all.

How is copying ones intellectual property good for anyone? It just causes people to not even try to make new things since all the work and money put into it will be ripped off and you won't even profit from your own work.

 

[Wololo]

Competition is good. See: Google Now

Copying is bad. See: S Voice

Exactly. Also see the Hyundai Genesis. What is it with South Korean companies and copying?

 

[vvswarup]

If Samsung can't make too much money on this stuff, it stymies real innovation. "Bounce back" v. 3G; I think Bounce back is worth more and should command more money.

Seriously...what's more important? A FRAND patent or one of the things Apple's suing over? One makes a phone work. One gives a visual effect. Innovation, in my opinion, should mean more standards. Anything Apple develops that should be a standard? They refuse to open and license.

iOS? Apple only. Facetime? Apple only. iMessage? Apple only. And the beat goes on...

Innovation should mean more standards? Why? If an entity, be it a person or corporation, invests resources into coming out with a cool concept, that entity should have the right to benefit and get legal protection from others being able to use that concept without any compensation.

And you say Apple doesn't open or license, citing examples such as FaceTime and iMessage. Why should Apple open and license these technologies? Apple invested resources into developing these. Is Microsoft Office for Mac as good as the one for Windows? No. Is Office available on iOS? No. Was Google Maps on iOS as good as the one on Android, with features such as turn-by-turn and vector-based mapping? No. If other companies don't open and license, and instead want to protect their turf, Apple is well within their rights to do so as well.

 

[Parasprite]

My favourite Samsung patent claim "Wireless video transmission & reception to and from a portable device."

I was thinking I might be able to patent "breathing air by a human" as well.

I couldn't find a patent with that exact name, any chance you could link it to me?

I found several others that were granted to Samsung which outlined various methods related to digital transmission of video on mobile devices (ways to compress data, error tolerance, methods of encoding and decoding of video, etc.) but my google-fu is apparently failing me tonight.

 

[kdarling]

I couldn't find a patent with that exact name, any chance you could link it to me?

I think he meant patent 5,579,239 ... "Remote video transmission system."

It was an invention of a group of guys in Oklahoma. They filed for a patent in 1994 and got it in 1996, meaning it's good until 2016.

IIRC, Samsung bought it last year as a weapon just for this trial.

The patent claims being used against Apple, are numbers (1) digitizing, compressing and transmitting a composite signal... and then uncompressing it on the other side, and (15) doing realtime video compression and sending over cellular.

Like many software patents, it's simple, obvious and should never have been granted. So there's almost poetic justice in using it in a fight where Apple is using similarly simplistic patents for asynchronous sync'ing, universal search, and slide to unlock.

This trial is a poster child for why software patents should not exist, and how the only winners are the law firms.

 

[joecool99]

Jesus, just how many times do they have to be "reprimanded" over this? How about some fines?

great signature ;-)
* and much needed reminder for lot of "us" computer addicts.

 

[rdlink]

This trial is a poster child for why software patents should not exist, and how the only winners are the law firms.

And now all of your reasonable posts on this topic up to this point are called into question.

Those are the words of a person who has never had an original idea. And I know that's not a description of you...

 

[kdarling]

And now all of your reasonable posts on this topic up to this point are called into question.

My factual posts are still factual posts. My opinions about software patents are a separate thing and should be obvious as being opinions that each person can take or leave.

Those are the words of a person who has never had an original idea. And I know that's not a description of you...

Well, thanks, I guess

Actually I would go the other way, and say that people who are in support of software patents probably have not done much programming or inventing. Or if they did, they have an inflated sense of being unique in that ability.

Heck, I've been programming for decades, and I'm damned good. That doesn't mean I'm conceited enough to think that no one else could ever think of the same ideas and solutions.

And that's the point. The biggest problem with software patents is that almost none of these trials are about copying.... instead they're about developers independently coming up with the same method of implementing an idea.

Such coincidences must happen thousands of times a week all over the world.

When simultaneous invention like that is so easy to do in a field, then it's pretty clear that the trials are only about who had time and money and ability to file or file first. And that's a silly reason to give one person the right to prevent others from using their own independently conceived ideas.

--

It's even dumber when the trial outcome depends on where a single comma is placed in the patent claims, and how the judge... usually with no technical training... interprets them. At that point it's no longer a trial, it's a game of chance. (In this trial coming up, claim interpretation has even come down to what year dictionary should be used.)

It's too bad more judges aren't engineers. My favorite judge moment was in the Oracle-Google trial about Java when the Oracle lawyer went on and on about how a range check piece of code would take him a year to write, and how unique it was. Unfortunately for him, the judge knew how to program and pointed out that he himself had written dozens of such range checks ... and they took just minutes to do.

Mind you, I'm being pushed into patenting more and more of what I do. However, that's for corporate self-defense, not for attack. Get rid of software patents and we can all stop wasting time on such nonsense.

--

TL;DR - The reason why so many US companies are filing software patents like crazy, is not because such ideas are so hard to come up with, but because they're so EASY to come up with... and they all feel a need to protect their work from being denied to them, just because someone else filed first for the same idea.

.

 

[jasonbogen]

The reason why so many US companies are filing software patents like crazy, is not because such ideas are so hard to come up with, but because they're so EASY to come up with... and they all feel a need to protect their work from being denied to them, just because someone else filed first for the same idea.

.

To me, at the very least it should be much harder to obtain a software patent and include some serious and specific innovation that cannot be traced to any existing software. That wouldn't include much, but the way it is now, the idea of patenting humans breathing air is not much of an exaggeration compared to what is accepted as a patent now. If this standard was upheld, the idea of it just being a race to be the first to file wouldn't be an issue.

I honestly haven't put much thought into what I think they should do, but as a software developer myself, I find many of the patents I see absolutely absurd. It's a system that needs a massive overhaul and will have major economic consequences IMO if not fixed.

 

[r3m1]

FRANDs, are like ethics, they become elastic when people start pulling at it (economcis/politics/etc.) - allowing for more or less than the original intent or nature.

 

[akbarali.ch]

Screw all these idiotic patent wars. More competition is good in this industry. We don't want one player to own it all.

A 'healthy' competition is good. Samsung's way is bad.

Now imagine someone copies Google glass and makes a replica. All the effort (Money, time, man power, technology) invested by Google will benefit some other company. That way Google loses return it should get from its invention/creation. And if this continues, the industry would rather wait to copy rather than INVEST AND INVENT as copying would be more profitable. They dont need to get the best engineers, dont need to have RnD lab, no need for market research, nothing, just wait to copy. That would hurt no other than we consumers.

But there are lot of stupid patent claims. One made famous by Lodsys.

 

[John.B]

Try 15th century Venice, and the Venetian Patent Statute from 1474.

The commenter was complaining about US patents.

 

[Gasu E.]

I was thinking I might be able to patent "breathing air by a human" as well.

I'm going to patent lame "I'm going to patent XXX" jokes. And then I'll sue the lot of you!

 

[clibinarius]

Innovation should mean more standards? Why? If an entity, be it a person or corporation, invests resources into coming out with a cool concept, that entity should have the right to benefit and get legal protection from others being able to use that concept without any compensation.

And you say Apple doesn't open or license, citing examples such as FaceTime and iMessage. Why should Apple open and license these technologies? Apple invested resources into developing these. Is Microsoft Office for Mac as good as the one for Windows? No. Is Office available on iOS? No. Was Google Maps on iOS as good as the one on Android, with features such as turn-by-turn and vector-based mapping? No. If other companies don't open and license, and instead want to protect their turf, Apple is well within their rights to do so as well.

Google Maps has been shown to not be as good because Apple and Google couldn't get along on the product; similarly, we don't know why Office isn't available on iOS, but it is available on Apple products.

I can't think of too much that Apple does that is useful for non-Apple users. And that is something that doesn't sit well with me, in the sense that companies like Motorola, RIM, Google and Microsoft are setting standards and licensing their products pretty much across the board. Apple gives the world aesthetic choices and refuses to share a lot of their technologies from what I see-heck, their innovation comes from buying companies outright and taking them off the market. That's not innovation.

The iPhone was innovation when it came out in many ways, but Apple's war on Android was about having full rights to a concept, which I think they've been gradually losing and falling behind on because they've refused to work with others. We've seen this with Microsoft too-and I would add, when Apple did agree to license, Microsoft committed to selling their software on Mac OS (which probably was a bad move in retrospect for Apple but I believe Linux would've eventually overtaken them in marketshare if not Microsoft because Apple is obsessed with price control).

Let's face it: Apple is content selling to 20% of the market and charging a monopolist price on that 20%, and will take excess of that. Their Mac software seems to indicate that (it isn't 20% yet).

But the great Apple innovations? LTE is other R&D (Not Apple). Siri? Other R&D bought by Apple. Fingerprint Scanner? R&D bought by Apple. I can't think of anything Apple has outright done themselves for a while. But, perhaps you can explain to me why bounce back shouldn't be licensed but Samsung should have to sell the people who are suing them over aesthetics at the same market rates as those who aren't suing them. Let Apple innovate another standard. The same way Samsung has to innovate a new interface. And if the product simply doesn't work or can't be built, tough.

I'm sincere in my distaste over Apple on this issue. Apple is behind on FRAND and suing over aesthetics. And frankly, I think most companies should say, unless Apple licenses, they shouldn't. And maybe they'll wise up, stop doing FRAND and start doing Patent-use for Patent-use deals, which would paint Apple into a corner: Share your tech, or don't build modern phones.