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Apple wanted Samsung to license patents for $30 per smartphone, $40 per tablet - Page 2

post #41 of 69
Quote:
Originally Posted by Hattig View Post

 

$30 to license "the rectangle with curved corners". No wonder Samsung turned it down.

 

I know right. It's a good thing no one has filed for a design patent on dim and dull, otherwise you might be found infringing.

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post #42 of 69
Quote:
Originally Posted by RichL View Post

It's interesting to see that Apple did offer licensing terms, rather than flat out refusing to license their technology. I don't think that ever been reported before.

 

Two things stand out though:

 

1) $30 per unit is an extremely high figure for a set of patent licenses. It could be argued that Apple intentionally set the bar so high to deter other companies from agreeing to the deal.

 

2) Wasn't one of the points raised in the Apple vs. Nokia case that Nokia wanted a cross-licensing deal and Apple refused? That's how it was reported on AI. 

Regarding no. 2. The difference in Apple vs. Nokia case, is Nokia was demanding the cross-license for THEIR patents, which isn't allowed.  The potential LICENSEE I believe can still offer their own patents as part of a cross-license.  The SEP LICENSOR, however, CANNOT demand cross-licensing for access to the SEP patents.

post #43 of 69
Quote:
Originally Posted by tawilson View Post

Regarding no. 2. The difference in Apple vs. Nokia case, is Nokia was demanding the cross-license for THEIR patents, which isn't allowed.  The potential LICENSEE I believe can still offer their own patents as part of a cross-license.  The SEP LICENSOR, however, CANNOT demand cross-licensing for access to the SEP patents.

Correct, they can't refuse to license. If the licensee doesn't want to share their own IP then they are expected to pay the full royalty rate. In Apple' s case with Nokia they agreed to a cross-license, thus likely reducing the royalties they're paying Nokia.

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post #44 of 69
Quote:
Originally Posted by Gatorguy View Post

Apple is well-aware it has standards-essential IP, but chooses not to license it anyway. That's according to Boris Teksler, Apple's director of patent licensing. 

 

"According to his testimony, Teksler noted Apple held patents required for standards, core computing and those associated with what has become iOS. Apple is not interested in licensing the patents. . ."

Apple may indeed hold standard essential patents.  However they are under no obligation to license them.

 

The standard body in question, can approach Apple to include their patents as part of the upcoming standard. If Apple does want them included, then they agree to license them under FRAND terms.  If Apple doesn't want to include their patents in the, not yet completed, standard, that standard has to then work around the patents.

 

I believe that's how it works.

post #45 of 69
Quote:
Originally Posted by Hattig View Post

 

$30 to license "the rectangle with curved corners". No wonder Samsung turned it down.

 

Wow!  If what you say is true then Kimberly-Clark has massive exposure for its Kotex™ product line.
 
It could also apply to manufacturers of products for incontinence (Depends) and hemorrhoids (Tucks).
 
Thanks for pointing that out -- time to load up on AAPL and put your money... where it'll get the biggest ROI.
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post #46 of 69
Quote:
Originally Posted by macarena View Post

This offer could come back to bite Apple.

 

Firstly, offering 20% discount for cross licensing Samsung's patents means that the value of Samsung's patents is set at approximately $6 to $8 per device - a lot higher than the numbers Apple is offering now.

 

Secondly, it looks like these numbers could be looked at as being way too high - remember, Samsung prices its devices about 15-20% cheaper than Apple - so a $30 fee could be as high as 7-8% of the device cost.

 

Thirdly, though Apple's patents are non-SEP, these prices make it look like Motorola's 2.25% for SEP patents are not ALL THAT EXCESSIVE. They are excessive, but not as excessive as they looked at first glance.

 

Most importantly, I believe it is these prices that make Samsung believe that it has lesser exposure at a legal trial - a jury is unlikely to cost them much more than agreeing to Apple's rates. Even though the numbers for 2010 look low at just $250 million, the numbers for today will be a lot higher - at 50 million phones a year, the cost for Samsung would be $1.5 Billion for just the last 12 months! Apple is just asking for $2.5 Billion today, which means Samsung is not exposed to much risk. I think even if ALL of Samsung's profits from mobiles and tablets are disgorged, it would be less than $30 per device - remember, not all manufacturers have the kind of profit margins Apple has! Samsung is probably making only 10% margins on its devices.

 

Of course, if they get hit with treble damages for wilful infringement, then the math could be totally different for Samsung. I think Samsung would be smarter to just pay Apple $2.5 Billion today, and get back about $0.5 Billion in their own licensing. At a net cost of $2 Billion, it is quite cheap for Samsung on a per device basis.

Yes. When you pay a legit licensing fee, it's a certain price.

When you steal and try to get away with it by destroying evidences, it's dearer.

Remember last time you didn't pay your parking ticket and got a triple to pays instead.

Thieves preferred theft rather than (very) fair licensing.
Will cost them dearly.
Steve Jobs offered Samsung Apple's crown jewels for $250M - Apple 2.0 - Fortune Tech

post #47 of 69
Quote:
Originally Posted by tawilson View Post

Apple may indeed hold standard essential patents.  However they are under no obligation to license them.

Yeah, in a nutshell the competition is f*cked if they can't profit from Apple's research, because it is the natural progression of technology.

Perhaps students with failing grades or barely making it through should be also be allowed to copy from A+ students. After all, getting an A should be a natural progression from an F.
Edited by uguysrnuts - 8/11/12 at 9:50am
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post #48 of 69
Quote:
Originally Posted by tawilson View Post

Apple may indeed hold standard essential patents.  However they are under no obligation to license them.

 

The standard body in question, can approach Apple to include their patents as part of the upcoming standard. If Apple does want them included, then they agree to license them under FRAND terms.  If Apple doesn't want to include their patents in the, not yet completed, standard, that standard has to then work around the patents.

 

I believe that's how it works.

I don't know that Apple was referring to only "not-yet-completed" standards. They certainly didn't specify that.

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post #49 of 69
Quote:
Originally Posted by Gatorguy View Post

I don't know that Apple was referring to only "not-yet-completed" standards. They certainly didn't specify that.

Do they have to specify everything that isn't a standard? Can't the list of standards be enough to exclude all that isn't in the list as not being a standard?

Things like cellular radio standards have to be licensable because all the HW needs to communicate with each other. With something like the way a touch interface works it's harder to argue that Apple has the one-and-only method for making this work. It's not like having a different method will mean that devices can't talk to a server. From what I've seen there are multiple methods for everything Apple is suing over.

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post #50 of 69

Microsoft is actually doing something right...they seem to almost every android maker paying them for patent use (probably Microsoft + Nokia bundle). Also probably cross license with apple for next to nothing on both sides. Apple $30 per phone is steep but they were offering 20% discount with cross licensing and I'm guessing if sammy decided to charge $10 for theirs or something like that apple would of worked well. Meaning sammy would pay less that $20 per phone. 

 

This was a proxy fight for apple google. My guess is Google's hand pressed Samsung to say no. Also at that time Samsung didn't have alternatives so if google threatened to take away android they couldn't turn to RIM, Web OS wasn't open, and Microsoft's WinPhone was crap. 

post #51 of 69

Any of Apple's competitors are lucky to have gotten any offer to license at all. 

post #52 of 69
Quote:
Originally Posted by AandcMedia View Post

Microsoft is actually doing something right...they seem to almost every android maker paying them for patent use (probably Microsoft + Nokia bundle). 

 

Licensing your stuff isn't doing something right or wrong, relative to anyone else. It's a business decision, and one that could over time erode the licensor's ability to meaningfully differentiate their product. 

 

The only really smart one here is Apple. Their entire strategy has paid off. It's golden. I'll fault them only when the ship's sinking, and that looks to be highly unlikely for the foreseeable future. So really, if you're not doing as Apple is doing, what exactly *are* you doing? 

post #53 of 69
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Originally Posted by bullhead View Post

 

The masses are too stupid to remember anything past the current day.  They will be onto the next "crisis" spoon fed them by the corporate news/government propaganda machine and lap it up like a dog licking ice cream off the floor.  Unfortunately, outside a few free thinking people with a mental capacity beyond a lab rat, the masses will continue buying the cloner Samesung/HTC/Nokia/<insert generic cloner company> rip offs

You are probably right but I like to think that a fair number will blacklist Samsung.

post #54 of 69
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Originally Posted by bullhead View Post

 

The masses are too stupid to remember anything past the current day.  They will be onto the next "crisis" spoon fed them by the corporate news/government propaganda machine and lap it up like a dog licking ice cream off the floor.  Unfortunately, outside a few free thinking people with a mental capacity beyond a lab rat, the masses will continue buying the cloner Samesung/HTC/Nokia/<insert generic cloner company> rip offs

 

Actually Nokia aren't "rip offs", they settled with Apple.

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post #55 of 69

What these license offers show, if Samsung is found guilty of infringement, is that as they had turned down Apple's offers and that as they were well aware of what Apple was offering, that the infringement was wilful and exposes Samsung to triple damages.

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post #56 of 69
Quote:
Originally Posted by Gatorguy View Post

I don't know that Apple was referring to only "not-yet-completed" standards. They certainly didn't specify that.

Um.... what you actually know about which you comment (in spades)?

post #57 of 69
Quote:
Originally Posted by Tallest Skil View Post

 

Are you trying to look at it from their perspective, or is this what you actually believe?

 

I didn't bother to ask, myself. I'm employing the Block Member option with abandon recently. Can't stand the trolls anymore... I've had it.

Proud AAPL stock owner.

 

GOA

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post #58 of 69
Quote:
Originally Posted by SolipsismX View Post


Do they have to specify everything that isn't a standard? Can't the list of standards be enough to exclude all that isn't in the list as not being a standard?

I don't understand your question Soli. 

 

I wasn't stating any opinion. The comment came from an Apple director who said he knew Apple held patents essential for standards and had no interest in licensing them. He didn't go on to explain further as far as I know. Guessing that he only meant IP for developing new standards might be correct, but without further clarification it's also possible (tho less likely) he meant they have IP they consider essential to an existing standard that they don't wish to share either.

 

Perhaps they'll get a followup question at some point. If I didn't address yours you'll need to be a little clearer.


Edited by Gatorguy - 8/11/12 at 9:16pm
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post #59 of 69
Quote:
Originally Posted by Gatorguy View Post

I don't understand your question Soli. 

 

I wasn't stating any opinion. The comment came from an Apple director who said he knew Apple held patents essential for standards and had no interest in licensing them. He didn't go on to explain further as far as I know. Guessing that he only meant IP for developing new standards might be correct, but without further clarification it's also possible (tho less likely) he meant they have IP they consider essential to an existing standard that they don't wish to share either.

 

Perhaps they'll get a followup question at some point. If I didn't address yours you'll need to be a little clearer.

 

Didn't he say they didn't like licensing them, anyway the reality is Apple's membership of and contribution of patents to various standards bodies e.g.. MPEG-LA shows that Apple has no problems with licensing SEP's.

 

They also have shown no problems with releasing some of their work as open source, evidence of which is in the license agreements which ship with every Android phone, as can be seen by going to Settings>About Phone>Legal Information>Open Source Licenses.

 

An opinion is not fact.

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post #60 of 69
Quote:
Originally Posted by tawilson View Post

Regarding no. 2. The difference in Apple vs. Nokia case, is Nokia was demanding the cross-license for THEIR patents, which isn't allowed.  The potential LICENSEE I believe can still offer their own patents as part of a cross-license.  The SEP LICENSOR, however, CANNOT demand cross-licensing for access to the SEP patents.

Hmm. Demanding or offering? There would be a big difference there. Under FRAND I guess demanding wouldn't be allowed but offering would wouldn't it? Would be interested in a link for the actual proof of demanding. Seeing they settled, I would be inclined to think that they were pretty reasonable up front compared to what we are seeing now and offering instead of demanding.

post #61 of 69

Here you go guys. Since no one else was taking the time to supply clarity on Apple director Teksler's statement on patent licensing, I searched for some myself.

 

It's not the way AI wrote in this article. They've completely muddied what he actually said. Here's a much clearer news report.

http://www.eetimes.com/electronics-news/4392191/Slides--Inside-Apple--Samsung-patent-talks

 

According to Teksler, Apple is willing to license both standards-essential IP and general computing patents. The third category he mentioned, IP unique to iOS, are the ones Apple doesn't want to license. IMO they're completely correct to keep those to themselves as long as they can, or until it makes economic sense to change direction. I've no problems with that.

 

This serves as an example why depending solely on AI's explanations of issues can lead to misunderstandings (Yes I'm speaking to you as well anantksundaram). Get out and read competing articles or live blogs about the same news if you really have any interest in understanding a particular issue. The meaning is often in the details. This one turns out to be a non-issue.

 

With that out of the way, it's interesting to note that even tho Apple would prefer not to license those unique iOS "look and feel" patents, Teksler acknowledged that they have done so, altho he "can count those on one hand". I know (according to news reports) that Apple licensed Nokia some patents that are unique to the iPhone. Teksler's choice of words would imply there's at least another entity, if not two or three others. With Samsung's side of the case being presented this next week I wouldn't be shocked to see the licensees mentioned along with questions about the terms under which Apple has extended a license to them.

 

Apple and Samsung disclosures this upcoming week will probably be just as revealing as this past one was.


Edited by Gatorguy - 8/12/12 at 5:53am
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post #62 of 69

250 million total for 2010 would amount to 20% of what apple spent on R&D that year, across all its divisions and its entire product lineup. The iphone is rumored to have cost 150 million to develop, so they're asking for more money per year than the iphone cost in total. Who could call that a fair price? Does apple really expect samsung to fund all of apple's R&D on phones and tablets? These are not license terms, these are punishment terms. Besides, $30 on products like the galaxy ace basically means samsung cannot sell into that market. Again, those are punishment terms, forcing samsung to exit the budget smartphone market outright.

 

Apple doesn't spend much on its R&D by the way, they're the lowest in the industry. For example, Samsung spends 6.5% of their revenue on R&D while apple spends 2.2%. Samsung spends more on R&D than apple, way more, but they didn't do it in a smart way. Samsung outsourced their mobile R&D to india, apple cultivated a smart core team in california. This lawsuit is another reminder why outsourcing R&D is bad for business.

 

So, where do you fall? Should patent licensing cost be determined based on the cost of innovation, or based on the cost of the resulting product? I think it should be the first, in which case apple shouldn't have been asking for more than $5 per device.

post #63 of 69
Quote:
Originally Posted by Gatorguy View Post

I don't understand your question Soli. 

I wasn't stating any opinion. The comment came from an Apple director who said he knew Apple held patents essential for standards and had no interest in licensing them. He didn't go on to explain further as far as I know. Guessing that he only meant IP for developing new standards might be correct, but without further clarification it's also possible (tho less likely) he meant they have IP they consider essential to an existing standard that they don't wish to share either.

Perhaps they'll get a followup question at some point. If I didn't address yours you'll need to be a little clearer.

Something doesn't sound right. So someone says they have patents that need to be FRAND but are refusing to makes FRAND? So they are breaking the law?

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post #64 of 69
Quote:
Originally Posted by SolipsismX View Post


Something doesn't sound right. So someone says they have patents that need to be FRAND but are refusing to makes FRAND? So they are breaking the law?

See post 60

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post #65 of 69
Quote:
Originally Posted by Gatorguy View Post

See post 60

I know. You contradict yourself between posts, hence my comment. In one you write, "The comment came from an Apple director [Teksler] who said he knew Apple held patents essential for standards and had no interest in licensing them." and in the next you write, "According to Teksler, Apple is willing to license both standards-essential IP and general computing patents."

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post #66 of 69
Quote:
Originally Posted by SolipsismX View Post


I know. You contradict yourself between posts, hence my comment. In one you write, "The comment came from an Apple director [Teksler] who said he knew Apple held patents essential for standards and had no interest in licensing them." and in the next you write, "According to Teksler, Apple is willing to license both standards-essential IP and general computing patents."

Geesh. . .

Perhaps because better and more accurately reported information was found in the meantime? Hardly a contradiction since I quoted the AI article for the first post

http://www.appleinsider.com/articles/12/08/11/apple_warned_samsung_of_possible_patent_infringement_in_2010_presentation.html

and linked much more accurate reporting for the later clarifying post.

http://www.eetimes.com/electronics-news/4392191/Slides--Inside-Apple--Samsung-patent-talks

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post #67 of 69
Quote:
Originally Posted by hill60 View Post

Didn't he say they didn't like licensing them, anyway the reality is Apple's membership of and contribution of patents to various standards bodies e.g.. MPEG-LA shows that Apple has no problems with licensing SEP's.

Apple has one patent in h.264. Also Apple is members of several groups and has contributed nothing to them. Blu-ray is a prime example.
post #68 of 69
Quote:
Originally Posted by jsebrech View Post
 Besides, $30 on products like the galaxy ace basically means samsung cannot sell into that market. Again, those are punishment terms, forcing samsung to exit the budget smartphone market outright.

 

They could remove the disputed features from their devices, couldn't they and then they wouldn't have to pay anything.

 

I guess you didn't think of that, did you?

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post #69 of 69
Quote:
Originally Posted by hill60 View Post

 

They could remove the disputed features from their devices, couldn't they and then they wouldn't have to pay anything.

 

I guess you didn't think of that, did you?

Actually, I think samsung's "leadership" were really genuine idiots for getting themselves into this situation. They were warned time and time again, in-house and by apple, to visually distinguish their products. They chose not to. They'll probably get hammered by the jury over it.

 

But ... I still believe apple's "licensing terms" are more like damages claims. It's quite possible that samsung will come off owing less if the court orders them to pay damages than if they had settled for apple's licensing terms.

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