Apple accuses Samsung of abusing its 3G power Apple got in one last dig against Samsung in the US on Friday, claiming that the Korean tech giant abused its "monopoly power" gained by its ownership of wireless patents and demanded unreasonable royalties from Apple for its iDevices. The two firms raced to persuade the jury, which is due to start deliberating later this week …
"Funny how Nokia were able to happily make a million phones a day and not have a the slightest problem with Samsung's "power over the entire phone market" while Apple fined it impossible."
That would be why the rules on SEPs state that they must be 'Non Discriminatory'. Each licensee can still do separate deals, but they're supposed to give everyone a fair shake - regardless of how successful they are, how much of a competitor they are, or indeed how pally-pally you are with them.
The accusation is that they're using their patents either to shake Apple down, or to hurt their ability to compete. Problem is they signed away their right to do that with these patents when they were granted SEP status.
You missed out Reasonable. If the two are charging 10% royalties then they have to show that 10% is reasonable and its similar to the amounts charged by others in the patent pool. There are about 30 companies in the pool, so if each asked 10% then anyone not in the pool would have to pay 300%, which manifestly ISN'T reasonable.
They do so knowing that what is considered reasonable in FRAND terms is much less than normal patents, but in doing so they will get much more total income. Someone charging 10 cents per device on 3G patents would have made over 100 million last year. They'll keep on making that or more until their patent expires, easily over a billion dollars total, not bad considering that they only have to collect it, not make anything.
The standards setting body will deliberately try to remove or engineer out any patent that is considered too expensive. The technology is also in competition with other patents, the prize being to be included in the standard. The result is that what's on offer must be both cheap and good. Part of the objection here is that Samsung were late in declaring that part of the 3G spec was covered by one of their patents, making it hard to remove in favour of competing technology. This was a breach of the rules also.
If it shouldn't be included under FRAND then they can charge what they like. If it's a required part of the technology but was declared too late to be removed in favour of other technology which was declared even later, then who really cares?
If something is worth paying for then people will pay for it (unless they can steal it). If the technology adds no value then it has no value, but it does add value so it should be paid for.
Erm, if they are so non-essential then why did Samsung bother to look at the iPhone and then replicate how it looked?
They know all too well that appearances matter. People don't all wear grey clothes made of hessian and wear clogs, they like to wear nice clothes so they look and feel good.
All sports shoes need to look like Nikes? Different does not imply "won't sell". Samsung didn't try to work out what they could do differently and possibly better, they just assumed that all of Apple's choices were right and copied them as close as they thought they could get away with. Apple says that was too close.
"They know all too well that appearances matter. People don't all wear grey clothes made of hessian and wear clogs, they like to wear nice clothes"
I think you dumped on your own argument there. People LIKE to wear nice clothes but they are hardly essential for survival. An iPhone-like UI may be the best way to make money but a drab and unusable UI doesn't make a device technically incapable of operating on a standard cellular network which is the single qualification for an SEP.
When making existing technology look pretty is what earn you billions, you can see how they get seduced into thinking that is worth so much more than the technology behind it. Unfortunately in a society where you can triple the price of a pair of jeans just by putting a label on it, there is some truth to that argument.
It seems to me that this was the strategy all along. Apple's technical arguments seem weak, so it appears their lawyers felt their best shot was to paint Samsung as the bad guy. I really hope the Jury doesn't get swayed by this and decides the case on the strength of the arguments presented - irrespective of who they decide for/against.
That said, the fact that they didn't get to see all of the evidence (both Apple and Samsung wanted to show more) will mean an Appeal will be made. If an appeal goes ahead, then "what was the point in having the trial"?
IMHO you hit the nail right on the head. If this farce was giving the go ahead the evidence should have been allowed, I know samsung were late but without it if they lose this has got to be great grounds for an appeal. Course, I don't know the law and not sure if it can even be allowed in an appeal.
Citation needed, please point me to somewhere that claim Samsung want half the cost of an iphone. Most reports on the subject seem to agree that they asked 2.5% which covered all their relevant patents and not 2.5% per patent which is the only way I can think you have come up with that ridiculous figure.
Both Samsung and Apple are winners here, they are both gaining a huge amount of publicity, albeit at the expense of each other.
Ï would love to see Koh give both of them a kick up the arse and make them both pay for wasting everyones time. The fines could go to some worthwhile cause.
... and this is definately not a response to Apple suing everyone and everything remotely able to compete with their products?
So to sum it up: Apple suing everyone because of rounded corners or a software version of a sliding lock is good for innovation? Google and Motorola responding to it, is bad?
This is exactly what Samsung should have done ages ago. They should never have waited until apple took them to court before they upped the ante for apples failure to license their patents (yes I know they are frand but they still need to be licensed). Motorola and apple have been at logger heads for ages, predating google's aquisition by far and Googles really need to be seen doing something about the uncertainty of android,
Hopefully something will come out of this that provides some stability to the android ecosystem rather than just motorola. Maybe one or two conflicts like this between huge companies is what is required to either force everyone to cross license or get the US government to address the mess. It's helping nobody but lawyers, who probably don't spend most the cash and just dump their money into some tax saving scheme.
"Motorola are now in on the act. So those who think Google are nice people who don't sue people or try to restrict competition should think again."
I have thought again. And my thoughts were "Awww, shame, poor Apple."
Closely followed by "HA HA!" in the voice of Nelson Muntz.
Motorola want to be paid for their work, Apple want to stop anyone using ideas similar to their own. So only 1 of them is using the patent system to restrict competition. But if Apple decides not to pay for other's work then the only option is the courts, and threats of a ban.
Though my understanding is that Apple started this case, not Samsung. And it's Samsung devices that are banned in the US in the meantime, not Apple's. So it's not really as case of "they're as bad as each other" - it's rather one-sided, and Samsung are just quite reasonably doing their best to fight against this.
We take representatives from Apple and Samsung, and while we're at it, representatives from the Patent office and other litigious patent holders. We lock them in a room with a half brick each and declare the last man standing as the winner.
The sad thing is that the outcome would be no worse than the current situation.
"We take representatives from Apple and Samsung, and while we're at it, representatives from the Patent office and other litigious patent holders. We lock them in a room with a half brick each and declare the last man standing as the winner…”
…and then engage the halon system.
Why settle for half measures? Let's round up everyone who bought a Samsung phone because it looked like an iPhone and shoot them. I think Samsung would settle for a 0.1% loss in future revenue to have the matter settled once and for all.
Then, in the interests of fairness, we can do the same thing to everyone who bought an iPhone because it looked like an iPhone. Apple have plenty of cash, they can stand to lose 75% of their customers.
The jury were too busy falling asleep to laugh. That's why judge Koh regularly asked if anyone needed caffeine throughout the jury days.
Don't know what to read into that but I really hope it's because they found Apples design patents so ludicrous they couldn't maintain any interest in the horse shit Apple were shovelling ;)
These essential patents that Samsung are massively overcharging for...
Several articles around the web mention that Sammy already have licencing deals with intel etc for these patents. If the complaint from Apple is that Sammy are charging too much for it to be Fair, Reasonable and Non-Discriminatory - surely the total cost if everyone charged the same (50% of phone value as reported above) is irrelevant. The only thing that would make Unfair, Unreasonable or discriminating is if they charge Apple more than Intel (or whoever) to licence the same patent.
Or am I missing something?
I don't think Samsung managed to show anyone was paying 2.5% of the RRP of a completed device. Most companies get their license as part of the cost of their baseband chip. These sell for about $10. I'm sure Apple would have no problems with paying a fixed 25 cents per phone (they were getting this via Qualcomm until Samsung cancelled their cross-licensing deal with them), but the idea that anything with 3G needs to pay Samsung 2.5% of RRP is against FRAND principles.
cant just consider the cost of the patent on its own. Samsung had put in an offer for cross-licensing patents.
the cost of the frand patent might be lower to other vendors, but if theres cross licensing then the cost is being lowered as a result. apple not being willing to share anything means it gets an unsubsidised rate and they're not happy.
curiously enough apple want to cross license now with their $30/40 fee per handset (resulting in a 20% "discount") for their rectangle with rounded corners BS,
They don't treat the cost of a cross-licenced patent as zero, something that adds nothing to the cost of their devices. They had to forgo charging for their own patents, and that lost them money. The profit margin of completed chips includes this factor.
If you extend the argument, should Samsung be due 2.4% of the retail cost of a car with a built-in phone? What about a jet airliner with built-in phones? By convention only the module that provides the functionality attracts the fee.
Even if you assume that Apple charge $100 for the 3G chip (wildly inaccurate, the BOM shows a mark-up of about 3x on cost, which would put the 3G chip at around $30-50) then Samsung would only be due $2.50 per phone. They are asking about $15, i.e. they are basing their prices on RRP.
There's no need to assume but yes, I was wildly inaccurate.
Without cellular: 16Gb: $499, 32Gb: $599, 64Gb: $699.
With cellular: 16Gb: $629, 32Gb: $729, 64Gb: $829.
So Apple charge $130 for the chip when it's in an Ipad. How much have they offered to the people who did the work which adds $130 to the value of their product?
You forget that the 3G option isn't ONLY 3G, you get an AGPS/GLONAS positioning chip, assorted aerials (some 3G, some GPS, but covered by separate patents), a SIM socket and carrier (again separate patents) etc. Apple's charge for the 3G chip/radio stack isn't all of the $100.
Once again, most of the rest of the marketplace buys their baseband chips from someone like Qualcomm or Intel. They buy them license paid, that is to say that all of the required 3G patents are covered in the price of the chip. Why is it non-discriminatory for Samsung to revoke this license and try to charge Apple more?
Just about every major mobe manufacturer has technological patents that offset the costs of using other manufacturers necessary patents. I don't see it as unreasonable that anyone who comes barging into the field without having made any contribution to it pays a significant sum for the use of the required technology. Apple are the kid that turns up at the bring-a-bottle party armed with a corkscrew and oversized glass.
it's the idea of FRAND going right over your head. The idea is to DELIBERATELY prevent cartels of incumbent companies from using their patents to block new entrants to the market. What did Samsung or HTC bring to the table when they first started in the 2G market? Sod all, but FRAND allowed them to enter and become major players. It's one of the reasons that GSM was such a global success, it was easy for companies with new ideas and products to bring them to the market and compete.
Its exacly what this is about.
It would be unfair for all parties to ask large sums amouth of money for frand patents. It doesn't allow new mob companies to join the party.
Its like you going to a new pub and they ask 50usd entry fee, while the regular bloke can come in for 1usd. That you are new to something doesnt mean you have to pay much more.
... Quote: "if all SEP owners demanded the same level of licensing fees, the costs would amount to half of the price of iPhones" ... well, then, the price tag, on iPhones, would actually make sens ... "accusing Samsung of being downright unfair when it comes to its standards essential patents (SEP)" ... now ... is just childish (as seen before with Apple) ...
Today could be the most important, the jury instructions control what the jury can do to the squabbling litigants and they're unlikely to go outside them. Koh would simply ignore them if they did in any case. Expect a tooth&claw fight between the lawyers.
What I want to see is the jury having the opportunity to rule that both sides lose. If there's no option to rule Apples design patents invalid the entire affair was just a waste. Samsung losing on FRAND just leaves Apple forced to pay up a smaller amount... actually forced to hand over real money with no more delay. TBH though I expect them to rule Apple is covered by Intel's licences.
Still, both sides losing would be great news for Samsung. The injunction lifts and they don't collect excessive fees they never expected to get and asked for in retaliation. For Apple it's game over, they'll lose their ludicrous patents. That's got to be good for almost everyone.
>Donaldson added that if all SEP owners demanded the same level of licensing fees, the costs would amount
>to half of the price of iPhones.
That's not relevant (to my IANAL mind). Apple & Samsung are not the only 3G handsets manufacturers, so the questions that should be asked are:
- Have Samsung licensed the other manufacturers ?
- If yes, is there anything different in their license agreement compared to what Apple were offered ?
- Are Apple the only ones to have a problem with Samsung licenses and why?
The difference is the other manufacturers actually have valid technology patents and so they all cross license between themselves. Apple have absolutely nothing to offer except dubious 'dress' patents that until recently they refused to licence and the rest of the industry does not see them as valid and so refuse to cross licence their real patents with Apples dubious ones. This makes it look like Apple are being asked to pay more but in fact they aren't.
Come on now, everyone actually knows it's because they are tossers and can't play nice, and their main interest appears to be disguising an international smartphone trade war as "innovation". And they'ŗe doing this because they failed in their primary market, so they logically enough dropped the "Computer" part from their name :)
Jobs demand as on person said here, $30 per device. PLUS tax. PLUS,PLUS,PLUS.... Judge Koh, you allow the Jury to feel you accept that as Fair and Reasonable, right? Where the hell is SHE from... YOu'd think theSytem would put in place a more OBJECTIVE Judge. OR a more experienced one...
Samsung, Too many times you allowed the fruity ones to DEFINE the argument. YOu may loose in that you come accross as a counter-puncher, and not a good one at that.
Fellow Androids. MOST of us just wanted a more cost effective Alternate. Google I felt was COOL. Apple raided a former employer of mine of ALL ( virtually ) of the GUI IP ( XEROX ) I worked there (XRX) just before Apple came out with it's STOLEN GUI. We noted the UNCANNY similarity. BUT figured Corporate couldn't do anything about it... Sad.... The 2nd best idea you come up with, and an opportunist smoothe talks his way into your bedroom and makes off with your closest guarded secrets. Then cries like a baby when the only way to design a SQUARE based product is similarly done... DOnt look now, but the entire present day GUI is still an art stolen from XEROX...
CIAO
Before someone comments that it was all lovey-dovey, agreed and paid for
http://www.nytimes.com/1989/12/20/business/xerox-vs-apple-standard-dashboard-is-at-issue.html
Page 2 is particularly relevant to today, but now it's not new tech under discussion, it who should be allowed to use sliders and icons in...decade-old form factors.
Apple didn't try to sue over the ideas they got from Xerox (bought and paid for in pre IPO stock lest we forget), but for the ideas they had then built on top. Star didn't have the concept of an explorer/finder app, it didn't repaint uncovered sections of window etc. Xerox had their case tossed out of court.
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