Samsung Defends Royalty Demands of Apple as Fair

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.