Samsung Defends Royalty Demands of Apple as Fair

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Apple vs. Samsung
More details have emerged in the legal fight between Apple and Samsung that show the companies’ strategy for establishing a licensing fee for Samsung’s standards-essential patents. Apple accused Samsung of demanding multiple times more from Apple than Apple pays for similar patents, while Samsun claims that its offer is fair, and besides, it was only an opening number.

The information came from court documents recently unsealed by Judge Lucy Koh, who is presiding over the companies patent infringement claims against one another. Earlier readings of those documents revealed that Samsung was asking for 2.4 percent of the retail price of Apple’s devices, while Apple said it should have to pay less an a half cent (US) per device. Reuters has added to what’s known with a report that includes a few quotes from both sides.

“Samsung’s royalty demands are multiple times more than Apple has paid any other patentees for licenses to their declared-essential patent portfolios,” Apple said in the documents. This claim is consistent with other comments from other cases around the globe in which Apple has said that Samsung, Motorola, and other standards-essential patent holders have asked for far more from Apple than other companies.

Companies whose patents are accepted as standards-essential technology are obligated to charge fair, reasonable, and nondiscriminatory (FRAND) licensing rates. Those rates are not codified, however, and Apple has said that its competitors are violating their FRAND commitments.

Samsung thinks differently, however. On Wednesday, the South Korean electronics giant said in a new filing that the licensing rate of 2.4 percent, “is consistent with the royalty rates other companies charge.”

The company added that Apple simply never made a counter offer, suggesting that Samsung considered its demand a starting place.

“Instead,” Samsung said, [Apple] simply rejected Samsung’s opening offer, refused to negotiate further and to this day has not paid Samsung a dime for Apple‘s use of Samsung’s standards-essential technology.”

There is zero doubt that Apple will have to pay Samsung royalties for those standards-essential patents it hasn’t already licensed. At issue is how much Apple will pay.

Samsung has tried to get an import ban against Apple based on the standards-essential patents, but Judge Koh and other courts have heretofore declined to grant that request. On the other hand, Apple has also sought import bans against Samsung and other device makers, but those injunction requests were based on patents not covered by FRAND commitments.

Judge Koh granted Apple a preliminary injunction against the Galaxy Tab 10.1 and the Galaxy Nexus smartphone, but Samsung was able to overturn the ban on the Nexus while the two companies continue their court battle.

Comments

geoduck

Companies whose patents are accepted as standards-essential technology are obligated to charge fair, reasonable, and nondiscriminatory

That is the question. Not whether the rate was fair, whether it was more than Samsung charged other companies.

daemon

Part of the licensing Samsung does with other companies includes cross-licensing which is included in calculating the cost of licensing the patent. Apple chose not to cross-license.

John Molloy

That is the question. Not whether the rate was fair, whether it was more than Samsung charged other companies.

Actually Samsung asked Qualcomm not to supply Apple and changed the license with Qualcomm to stop Apple from gaining the license merely by purchasing the chip (Patent Exhaustion). Sound pretty discriminatory to me.

daemon

Actually Samsung asked Qualcomm not to supply Apple and changed the license with Qualcomm to stop Apple from gaining the license merely by purchasing the chip (Patent Exhaustion). Sound pretty discriminatory to me.

Got a source for this info? I mean, it’s cool if you’re the one who renogtiated with Samsung on behalf of Qualcomm for the license…. it’d just be nice to know that’s where you’re getting your information from…

Bryan Chaffin

Part of the licensing Samsung does with other companies includes cross-licensing which is included in calculating the cost of licensing the patent. Apple chose not to cross-license.

That’s one way to see it.

Another way to see it is that Apple recognized Samsung’s tactics as an attempt to force Apple to cross license its own patents. Having recognized it, Apple decided to let the courts force Samsung to license its SEPs at a rate in keeping with its FRAND commitments.

There is zero chance that Apple ever thought it could simply never license these standards-essential patents from Samsung, Moto, etc.

Except for those patents Apple believes are covered by the licenses already paid for by its suppliers. For those patents, it appears that Apple believes it has a case to not have to pay.

But “Apple chose to not cross-license” requires Apple’s management to be irrational.

daemon

Another way to see it is that Apple recognized Samsung?s tactics as an attempt to force Apple to cross license its own patents. Having recognized it, Apple decided to let the courts force Samsung to license its SEPs at a rate in keeping with its FRAND commitments.

You say that like it’s not exactly what was intended by the companies that participated in the standards. If they didn’t intend that from the very begining, what possible reason would they have to particpate? IBM dominated for decades by refusing to allow their IP to be included in standards….

Bryan Chaffin

Today’s SEPs are intended to earn steady royalty income. Realistically speaking, the patents included in these types of standards are worthless without being included in that standard.

This is why Samsung and Moto seeking import bans based on SEPs is considered so unusual.

Another way of putting it is, what good is a wireless patent if no device or network will use it?

These infrastructure patents are vastly different from the types of patents Apple seeks or IBM sought back in the day.

Terrin

Part of the licensing Samsung does with other companies includes cross-licensing which is included in calculating the cost of licensing the patent. Apple chose not to cross-license.

Yes, except I suspect you are guessing as I have never heard Samsung state what you are claiming. Motorola tried to get 2.5 percent from Apple, Judge Posner tossed the case.

daemon

Motorola tried to get 2.5 percent from Apple, Judge Posner tossed the case.

So what? Judge Posner tossed Apple’s case too, and Apple just wanted Motorola’s head on a silver platter…

John Molloy

Got a source for this info? I mean, it?s cool if you?re the one who renogtiated with Samsung on behalf of Qualcomm for the license?. it?d just be nice to know that?s where you?re getting your information from?

You can use Google to find this information. It has been reported by the serious press over the last few years. From the rest of your posts to this article you seem to be expressing the usual anti-Apple information and just denying facts.

BTW. Posner wanted this case, it seems, to merely rant against the patent system. Not something someone in his position should do. Same with the UK judge who seemed to ignore facts to score points against Apple - Apple is hated by the insiders in the UK, look at the BBC’s coverage for example, they love to kick Apple down on any negative news but refuse to release anything positive.

daemon

BTW. Posner wanted this case, it seems, to merely rant against the patent system. Not something someone in his position should do. Same with the UK judge who seemed to ignore facts to score points against Apple - Apple is hated by the insiders in the UK, look at the BBC?s coverage for example, they love to kick Apple down on any negative news but refuse to release anything positive.

You’re paranoid and delusional.

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