Samsung Ready to Strip Galaxy Tab Features in Australia

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Samsung is offering to cut features from its Galaxy Tab 10.1 tablet in Australia as part of a deal with Apple so it can sell its iPad competitor in the country, according to the BBC. The two companies have been locked in a patent infringement legal battle in the country over mobile device patents.

Samsung ready to gut the Galaxy TabSamsung ready to strip away Galaxy Tab features in Australia

Samsung agreed to delay the launch of the Galaxy Tab 10.1 in the country until the beginning of October while a judge reviewed the case, but faced the potential of an court-ordered ban on its tablets thanks to a request from Apple for an injunction blocking the sale of the company’s multimedia tablet. The company said last week that it wants to swing a deal with Apple to avoid a court battle, too.

Apple and Samsung have been locked in a legal battle over patent infringement claims for several months. Both companies have alleged that the other’s mobile devices use patented technologies without proper licensing, and have filed lawsuits against each other in the U.S. and other countries.

A German court recently upheld an injunction blocking the sale of Samsung’s Galaxy Tab 10.1 tablet in the country. Samsung has filed an appeal in hopes of overturning that ruling. Apple was also awarded a temporary injunction through a Dutch court blocking the sale of some Galaxy devices in the European Union.

There isn’t any word yet on which features Samsung is ready to axe, of if the company would consider stripping the same functionality from its tablet in other countries, too.

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9 Comments Leave Your Own

BurmaYank

There isn?t any word yet on which features Samsung is ready to axe, of if the company would consider stripping the same functionality from its tablet in other countries, too.”

My guess is that neither Samsung nor Apple is really very interested in the question of which features Samsung should/shouldn’t axe - but rather, the heart of the issue is whether or not Apple would/must accept ANY such precedent-setting concessions by Samsung, which might allow any other infringements against Apple’s IP by Samsung’s iPad-clones to continue standing in the marketplace as part of “the deal”.  Any such precedent-setting concessions by Samsung would be the Samsung camel’s legal nose under Apple’s iPad IP tent.

Does SJ have any say in this call?  If not, what if any Samsung Galaxy Tab 10.1 tablet fixes would he have tolerated as CEO?  (My hunch is: “NONE”.  This may be an interesting turning point in Apple’s history).

Nemo

A couple of things.  First, kudos to the BBC for getting this story.  These types of settlement negotiations are top secret, and even though this is probably a controlled leak from one side, probably Samsung, to influence either the court or the negotiations or both, it is still good reporting.

Second, no bad precedent is set by merely have the Apple and Samsung conclude their dispute in Australia by settlement.  The terms of the settlement, as evidenced by what get removed from Samsung’s Galaxy products, determine whether the settlement is a bad or good precedent for Apple.  If the settlement, the authorized public statements about it, and what is removed from Samsung’s Galaxy products show that Apple obliged Samsung to remove its IP or at least the critical items of its IP from Samsung’s Galaxy products, then that is a victory for Apple and would be a very good settlement and a very good precedent. 

So in a complete settlement, Apple would be negotiating to achieve several things:  (1) Cease and halt all of Samsung’s current and future infringement of Apple’s IP; (2) Make Samsung pay so it is clear to Samsung and all others that no one gets a free shot at infringing, that is, infringement will be punished with damages that deprive the infringer of any benefit from the infringement; and (3) Issue a public statement that show what was infringed, that Samsung is halting all such infringement now and forever, and that Samsung is paying a monetary penalty for any infringing products that have entered the market in Australia, which I don’t think has yet happened. 

Also, it would be good to get Samsung’s statement that certain IP practiced in its products belongs to Apple.  However, that may be stretch, because it would prejudice Samsung in other forums where the specific patents are at issue by virtually admitting infringement. 

There are some other important elements to this type of settlement, such as having it blessed by the court, being under the court’s imprimatur, and that the court shall retain jurisdiction to enforce the settlement with both damages and injunctive relief.  The settlement will also likely specify the remedies for future infringement, and those remedies will most likely be severe.  Duration of the settlement should be coextensive with the duration of Apple’s IP rights.

Of course, the settlement agreement could be less ambitious.  The BBC isn’t clear about this.  But Samsung may simply be seeking to design a tablet product that it can release to the market in Australia without threat of an injunction, while continuing to litigate, with the court determining the parties respective IP rights in its final judgment.  If the judgment goes against Samsung, it will have a non-infringing tablet that it can continue to sell free from the threat of injunction.  If Samsung wins, then Samsung will quickly replace the reduced Galaxy Tab with the current model that Apple alleges to be infringing.

Brutno

Nemo,

I appreciate your comments. My question: Was there not also a “look and feel” component to this case, and if so, would a settlement involving removal of just software features set a precedent that would allow future “look and feel” copying?

Nemo

Yes, certain of Apple’s design patents (the ornamental look of Apple’s products), as well as certain of its utility patents are in suit.  I would expect that all of Apple’s IP, design and utility patents, are being negotiated in the parties’ settlement discussions, so that Samsung would have to change its Galaxy’s products’ ornamental design so that those designs no longer infringe, as well as halt the practice of Apple’s utility patents.

Nemo

Also, let me clarify a point.  A settlement does not constitute a legal precedent, because there is no judgment on the merits of the case but rather a contract between the parties that settles the case, a contract that can be enforced in the courts and which may, depending on the settlement, even subject a breaching party to contempt of court.  However, if any settlement between Apple and Samsung clearly favors Apple, provides full protection of Apple’s IP, and deprives Samsung of any benefit from its alleged infringement, then that sets an example to others that constitutes a public precedent in the sense that it is a warning to others that they can expect to suffer Samsung’s fate if they dare infringe on Apple’s IP.

Bosco (Brad Hutchings)

Nemo, if those are the terms of a settlement, expect Samsung to go to trial. It’s really beyond regional law and tactics at this point. How Samsung deals with Apple is strategic. I think Samsung needs to realize a few things.

(1) Their damages aren’t going to be crippling in the worst case in any of these regional spats, yet the attention that Apple has to give these things is quite high, the public interest is very high, and there is a chance to turn Apple legal victories into better PR for Samsung. Standing up to a bully can be great PR.

(2) The tablet market is going to 7” and $200. I’ve felt that for a long time. There are a lot of things that a $200 tablet can reasonably replace. The core component costs—screen, WiFi, Bluetooth, USB, HDMI, etc.—are trending toward very low. This means that iPad and the 10” Android tablets may be relegated to a niche, top market. Samsung might just take inspiration from Country Joe McDonald and ask, “One, two, three, what are we fighting for?”

(3) Samsung continues to lead the industry in non-volatile solid state storage, which, until we get to several terabytes being standard on SOCs, is a steel toed boot Samsung can continually kick into Apple’s shins.

But none of that means that Samsung should let Apple have it easy. Make Apple fight every battle to the end. Maybe Sammie even wins some.

furbies

Maybe Sammie even wins some.

Good Grief Bosco! You’re being reasonable !

As for:

(1) Their damages aren?t going to be crippling in the worst case in any of these regional spats

Regional ? Makes us sound like a 3rd world nobody.
The Courts here in Australia can be just as costly as in any other jurisdiction!

And Nemo:
Can’t court judgements from here in Oz be waved about in other court rooms ?
(“Hey Judge cop a look at this ?”)

Nemo

Dear furbies:  The facts and admissions adduces in the Australian court can certainly be used in the U.S., where they are relevant to the claims and defenses sounding in U.S. law.  And even the Australian court’s reasoning might be useful where the laws and the elements that must be proved are similar. 

Certainly, courts in the United States recognize the competence and quality of the administration of justice in Australian courts, and both the U.S. and Australia are common law countries with many similar laws, and, thus, were the analysis of an Australian court persuasively treats similar legal issues, a U.S. court may be able and inclined to follow that reasoning.

Let me address Bosco’s objections.  To begin with Bosco, did you even read the last paragraph of my post, supra, where I wrote that Samsung may simply make a stripped down version of the Galaxy Tab for sale in Australia that is sufficiently shorn of Apple’s IP so that Apple won’t object to its sale in Australia, while the parties litigate their case in Australia to a final appealable judgment?

On the issue of damages, there are unlikely to be crippling but only because the Galaxy Tab has been such a failure in the market that Samsung has sold too few for it to amount to much in the way of damages.  You will recall that Justice Annabelle Bennett had the same concern, wondering whether the Tab had sold enough units to even warrant granting Apple an injunction.

Seven inch tablets?  Well, so far 7 inch tablets have been a disastrous failure in the market.  Perhaps, the Kindle Fire will do better.  As for costs, the decline in the costs of components will benefit all OEMs, but will benefit Apple far more than others, because Apple makes so many more tablet computers that all of its competitors combined that its economies of scale are vastly superior to even Android OEM that is next closest to Apple’s production of iPads.  Also, Apple’s vast supply of cash gives it unparalleled purchasing power.  So taken together, Apple’s far superior scalar economies and its greatly superior purchasing power, no other maker of tablet comes close Apple’s much lower costs for components.  And, of course, these facts have been widely reported up and down the business and tech press.

Samsung’s lead in DRAM is too insignificant to have any significant impact on either the price or performance of Apple’s iPads and iPhones relative to any smart mobile device that Samsung can make.  Indeed, as reported here in TMO, Apple has already found equivalent DRAM from a Japanese supplier and replaced Samsung as a supplier of DRAM for its iOS-based smart devices.  So losing Apple as a customers has hurt Samsung badly, while doing no harm to Apple. 

Samsung had hoped to make up the loss of Apple’s custom with roaring sales of its Android-based devices, but that hope has failed with razor thin margins on its Android phones, as it competes against all the other Android phone makers, and with the failure of the Galaxy Tab in the market, that is, where the Tab has been able to get to market without its distribution being enjoined.

Bosco (Brad Hutchings)

Nemo: The B&N Nook Color has sold at least 3M units so far. Quite the disastrous failure.

Also, Apple rejected Samsung’s offer in Oz. Sammie’s gonna have to realize that you can’t negotiate with terrorists and you just have to shoot to kill. Sammie’s Q3 numbers are due soon, and they may show why they are such a threat to Apple. Consumers will see through Apple’s shenanigans.

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