The European Union has formally started an antitrust investigation of Samsung over its use of standards-related 3G patents in its patent battles around the world. The Korean firm has brought lawsuits against Apple in a number of European countries, alleging patent infringement of 3G intellectual property it holds. However, 3G …
Define 'Fair and Reasonable'
If Samsung have already licensed their patents to other firms who have agreed their price is indeed fair and then offered them to Apple at the same rate that seems fair. If Apple have refused the same terms offered to other manufacturers then it is Apple being unreasonable. As far as I understand it from various reports this is the case and Apple are the ones who have thrown their toys out of the pram because Samsung wouldn't give into their unreasonable demands to get a lower rate than other companies. Samsung quite rightly have stood their ground and said they don't care how big Apple are, they pay the same rates as everyone else.
If that isn't the case and Samsung are trying to charge Apple more than other companies then of course they are in the wrong, although given Apples attitude towards them recently I don't blame them for trying it on.
I think the issue is slightly more complex.
Samsung want to license at a higher rate for the period before Apple actually came and asked for permission, and at the same rate as everyone else from when Apple requested a license.
I could be wrong, it may well be I'm thinking of someone else and Apple.
It is indeed more complicated. From what I've heard, samsung were asking for something like 3% of the chip cost for these patents. There are hundreds of these patents that have to be paid for for a 3G chip, so multiply 3% by a few hundred and you're perhaps looking at 10x the cost of the actual chip in patent fees which is clearly unreasonable. Besides which, it seems apple bought the chips from broadcom, and broadcom paid samsung a license fee for these patents. Is it fair to ask for money from broadcom AND apple? If so, is it fair to start suing end-users too? That's the logical next step!
Then consider that samsung can start doing this to *any* other company that makes a phone with 3G support. They can demand unreasonable amounts, and if you won't pay up they can try and get your devices banned from sale.
The EU get my full thumbs up for this one. I hope they start investigating the other companies trying this particularly nasty tactic too (I'm looking at you motorola!). Hopefully it'll lead to an investigation of all the more general patent abuses later too, but FRAND abuse should be high priority.
From the coverage I've read, I think this is allowed for under the rules of the FRAND licensing. If a party refuses the offered and "normally" agreed terms under FRAND. Then the owner of the original IP is no longer bound by the FRAND rules.
Apple have claimed all along that they have no need to license any of this technology and so have refused the FRAND terms offered by Samsung and many others (I'm sure there were articles here about Nokia having a go about this when the iPhone first came out).
Apple is now trying to say to Samsung, well if we must pay we only want to pay you what you asked for first.
Samsung is saying "No, you didn't want those terms so they aren't on the table any longer" you have to start from scratch and since you've already broken what we think the rules are why should we be nice particularly when you are trying to screw us everyway you can think of".
As you say, from the time Apple agree to the the FRAND rules, the royalties on the IP are set out and that is all they need to pay.
Its going to be fun to see how this plays out (or pays out)
If that's the case ....
Then Samsung are likely well aware of it and maybe even the investigation is a foregone conclusion in Samsung's favour, effectively, with the investigation being a formality that Samsung expected to take place and yielding the expected result of no wrong-doing which then paves the way for Samsung to do WTF they want with Apple, involving bending over, device banning and expensive licensing to be allowed an *existence* in the EU market and maybe beyond. Apple may well be asking very politely if perhaps they could have the dolly back in the pram, now, please. Yeah Apple can buy their screens from LG or whomever but don't Samsung make the CPU chips in the Apple gear and therefore own the IC designs which mean they sorta own the code if no-one can make a chip to do the same thing without a complete codebase rewrite on Apple's part for another processor?
Don't wake me up, I wanna see how this dream ends...
It may well be (it is as I understand it) that Samsung's "fair and reasonable non discriminatory" license terms include a mandatory cross licensing of all mobile patents. That's how the patent MAD game is supposed to work, and everyone else would have had no problems with that. Consequently it is "fair", "reasonable" and "non discriminatory".
Apple comes to the game and feels it has a load of innovative touchscreen and smartphone related patents that it does not want to cross license with anyone. They are finding out that is not how the game is played and look like they are about to get screwed over massively for being greedy.
An interesting parallel?
Apple are also (technically) in breach of their W3C membership for claiming some HTML5 patent and refusing to share/play-by-the-rules if I remember correctly, too. Something I think the W3C is trying to remind them of, diplomatically, so far.
you sir have no idea what you're talking about
you sir have no idea what you're talking about
Samsung, complete amateurs
This is not how you wring royalty payments out of competitors, have they not learned anything from the other patent trolls, you go after a small company that can’t afford the legal battle first, that proves you are right, then you hit the big players.
As others have pointed out...
... Apple's iPhone 4S uses a Qualcomm chip for their 3G GSM features, with a Skyworks chip used in the GSM version of the iPhone 4. Apple designed neither of these chips. They're off-the-shelf (sort-of) components.
Both Qualcomm and Skyworks are already paying the licensing fees for the use of 3G / GSM-related patents in their products, so their customers don't have to. Therefore, Apple are well within their rights to be absolutely livid about Samsung's behaviour: unless Samsung have some weird patent covering the use of antennas (that allegedly don't work properly), I can't imagine what the hell it thinks it's doing.
Apple have plenty of money to spend on this kind of legal circus. If nothing else, it could help clarify a bunch of legal grey areas, as well as killing a few of the more ridiculous patents approved by the USPTO on the way. Other companies may also benefit from this wholesale clearing of the legal air.
Samsung seem to be behaving very oddly. You don't license patents for things like GSM to end users. Nor do you license the patents to design companies that assemble devices that use off-the-shelf components for the patent-related functionality. Samsung bloody well know this, so Codd knows what they think they're doing. I hope, for their sake, that they have a good reason.
> Samsung seem to be behaving very oddly.
Not really. They were attacked by Apple and counterattacked.
The legitimacy of that defensive action is now under question.
This is open corporate warfare and someone is trying to tie Samsung's hands.
While you don't license things like 3G patents to end users, Samsung have claimed that their licensing agreement with Qualcomm doesn't grant Qualcomm's customers unrestricted rights. Now I've no idea what their agreement says, but it may well have been drawn up on the basis of an understanding that all the Qualcomm customers would be members of the nice cosy GSM/3G clubs and be playing the patent game nicely between them. Without knowing the terms of this agreement then it is hard to know one way or the other what is actually going on.
Either way, there is no doubt that Samsung's actions are a retaliation for suits brought against them.
I think the appropriate term for Samsung's activity is
The term is...
Why is Apple immune from antitrust suits when anyone who opposes them is immediately attacked?
They pretty much had a monopoly on MP3 players (iPod) and for a while did with tablets. They forced their users to use iTunes to transfer data to those devices, which means that other potential content providers could not get a foothold. How was Apple not pulled up on this when other companies can't even give away a browser for free?
If you actually look at facts, I think you'll find you're confusing "monopoly" with "most popular" or "only".
It's fair to say that the iPod has been the most popular MP3 player for quite some time, but you're only forced to use iTunes if you want to buy stuff from the iTunes store and even then you only need to use iTunes to transfer it to your device if it has DRM. I don't see how this is significantly different from having to use Windows Media Player to load PlaysForSure stuff onto a device.
And if you're not using DRM media bought from iTunes, then there are a huge number of pieces of third party software that will also load an iPod, some free some not free.
Yes, iTunes was a monopoly when it launched, but that was because it was more or less the only game in town - someone has to be first.
It's for (pretty much) the same reason that the iPad had almost 100% market share when launched and now it's more like 80%.
If you think about it, the only alternative is for the first company to tell all their competitors about their new product (and new market) and then wait for them to develop their own products before everyone launches at the same time, which is all very nice but doesn't make terribly good business sense.
@chrom4t1c: "you only need to use iTunes to transfer it to your device if it has DRM"
I don't have an iPod, but I do have an iPad. And I haven't found a way of transferring files (be they MP3, eBooks or whatever) from my PC to my iPad *except* through iTunes. Apple seems to have made sure of that by refusing to show the iPad's internal drive as a USB storage device.
So please, let me know - *how* do I transfer my non-DRMed file to the iPad *without* using iTunes?
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