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Samsung in talks to settle EU antitrust case involving Apple & essential patents

post #1 of 25
Thread Starter 
Facing an antitrust lawsuit from the European Union for allegedly abusing its ownership of standard-essential patents, Samsung has reportedly begun talks with regulators to settle the charges before a trial can begin.

EC


Citing two people familiar with the matter, Reuters reported on Tuesday that preliminary settlement talks have begun between Samsung and the European Commission, which is the competition regulator for the EU. Among the companies who are alleged to have been hurt by Samsung's actions are rival smartphone maker Apple.

Samsung was formally charged by the European Commission last December. The Korean electronics maker is accused of abusing its dominant market position to gain a foothold in legal disputes being waged against Apple.

Specifically, Samsung has been accused of misusing standard-essential patents it owns as legal weapons to gain leverage in its ongoing patent infringement disputes against Apple. Samsung, however, has a duty to license standard-essential patents to rivals under fair, reasonable and non-discriminatory (FRAND) terms.

Apple, too, has argued that Samsung did not meet its requirements as a standard-essential patent holder. Instead, it has accused Samsung of filing lawsuits seeking injunctions against Apple devices for those patents before making a licensing offer.

Now, with EU regulators prepared to go to court, Samsung actively "wants to settle," one source quoted in Tuesday's report said. However, they added it's too early to determine whether the current talks would actually result in a deal that would allow Samsung to avoid fines of as much as $17.3 billion.

The U.S. Department of Justice is said to have also taken an interest in Samsung's lawsuits involving standard-essential patents. However, while the DOJ has reportedly opened an investigation against Samsung, no antitrust suit has been filed.
post #2 of 25
If Samsung wants to settle, fine.

FINE!
Pot is legal in North Korea.
That explains a considerable amount.

"The United States will respond proportionally at a place and time we choose..."
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Pot is legal in North Korea.
That explains a considerable amount.

"The United States will respond proportionally at a place and time we choose..."
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post #3 of 25
Maybe the EU could give some instructions on SEP to the ITC.
post #4 of 25
Quote:
Originally Posted by TeeJay2012 View Post

Maybe the EU could give some instructions on SEP to the ITC.

 

They have the same ideas already.

 

Both the EU and the ITC have stated that Standards Essential Patent holders do not give up basic patent owner rights, such as the right to seek an injunction in the case of unwilling licensees.

 

The difference in the two situations is that the EU Commission is saying that just opening negotiations demonstrates willingness, even if nothing happens afterwards... whereas the ITC found that Apple demonstrated unwillingness by refusing the first offer and then not seeking any further arbitration.

 

The silly thing is, both Samsung and Apple are being punished for breaking rules that are still being defined.  The right thing to do would be for the EUC and ITC to FIRST make their rules plain, THEN go after anyone who breaks them.  Instead they're both using these companies to further their own bureaucratic power, while they figure out their own rules.


Edited by KDarling - 6/25/13 at 6:19am
post #5 of 25

^ You keep spewing that same BS based on a couple decisions when the MAJORITY of rulings DO NOT agree . Most courts, judges, government, organizations, academics and major tech companies DO NOT agree.

 

So stop with your usual crap of trying to take a minority position and claim it's what everyone thinks.

post #6 of 25
Quote:
Originally Posted by KDarling View Post

They have the same ideas already.

Both the EU and the ITC have stated that Standards Essential Patent holders do not give up basic patent owner rights, such as the right to seek an injunction in the case of unwilling licensees.

The difference in the two situations is that the EU Commission is saying that just opening negotiations demonstrates willingness, even if nothing happens afterwards... whereas the ITC found that Apple demonstrated unwillingness by refusing the first offer and then not seeking any further arbitration.

The silly thing is, both Samsung and Apple are being punished for breaking rules that are still being defined.  The right thing to do would be for the EUC and ITC to FIRST make their rules plain, THEN go after anyone who breaks them.  Instead they're both using these companies to further their own bureaucratic power, while they figure out their own rules.

The EU has a Q&A here. You appear to be correct that the EC is not saying that injunctive relief should not be available for SEP infringement. Instead they may have a fairly broad definition of a "willing licensee".

"Is the Commission generally questioning the use of injunctions by patent-holders?
No. Recourse to injunctive relief is generally a legitimate remedy for patent-holders in case of patent infringements. The case is therefore not about eliminating the use of injunctions by patent-holders. Rather, the Commission has reached the preliminary conclusion that the seeking and enforcing of an injunction for SEPs can constitute an abuse of a dominant position in the exceptional circumstances of this case - where the holder of a SEP has given a commitment to license these patents on FRAND terms and where the company against which an injunction is sought has shown to be willing to enter into a FRAND licence."

"Under what circumstances can a potential licensee be considered "willing" to enter into a FRAND licence?
In the case at hand, the Commission is of the preliminary view that Apple's willingness to enter into a FRAND licence manifested itself in particular by its acceptance to be bound by a German court's determination of a FRAND royalty rate. The Commission's preliminary view is that the acceptance of binding third party determination for the terms of a FRAND licence in the event that bilateral negotiations do not come to a fruitful conclusion is a clear indication that a potential licensee is willing to enter into a FRAND licence. This process allows for adequate remuneration of the SEP-holder so that seeking or enforcing injunctions is no longer justified once a potential licensee has accepted such a process.

By contrast, a potential licensee which remains passive and unresponsive to a request to enter into licensing negotiations or is found to employ clear delaying tactics cannot be generally considered as "willing"."


Motorola could get the same treatment from the EC. IMO the standards- setting organizations bear much of the blame for failing to define the rules under which patents are included in the standards. Outside agencies changing or defining the rules after the fact introduces issues that may not have existed when the patents were pledged. Companies that chose to allow them included in those standards in the first place might have made a different decision had they known how it would be treated today.
Edited by Gatorguy - 6/25/13 at 8:06am
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post #7 of 25
Quote:
Originally Posted by EricTheHalfBee View Post

You keep spewing that same BS based on a couple decisions when the MAJORITY of rulings DO NOT agree . Most courts, judges, government, organizations, academics and major tech companies DO NOT agree.

 

So stop with your usual crap of trying to take a minority position and claim it's what everyone thinks.

Are you responding to KDarling? His position sounds rational to me. Sure, you'll probably call me a troll, too. Regardless (and regardless of the target of your rant), get a grip, man!

post #8 of 25
I suspect that it is only on AI that anyone could seriously believe the 17.3 Billion bullshit. There has NEVER been a fine even remotely close to this in the EU in antitrust affairs. Dream on if you will, but remember that fantasy is not reality.
post #9 of 25
Quote:
Originally Posted by Taniwha View Post

I suspect that it is only on AI that anyone could seriously believe the 17.3 Billion bullshit. There has NEVER been a fine even remotely close to this in the EU in antitrust affairs. Dream on if you will, but remember that fantasy is not reality.

Remember when that was said about Apple winning their case?

17 billion isn't enough in damages.
post #10 of 25
Quote:
Originally Posted by EricTheHalfBee View Post

^ You keep spewing that same BS based on a couple decisions when the MAJORITY of rulings DO NOT agree . Most courts, judges, government, organizations, academics and major tech companies DO NOT agree.

So stop with your usual crap of trying to take a minority position and claim it's what everyone thinks.

I dont try to say what the law is now but you know even if there are 100 cases saying Y if a new authoritative case says X then the law is X...

Just saying...
post #11 of 25
Quote:
Originally Posted by GTR View Post

If Samsung wants to settle, fine.

FINE!

Bit like their Galaxy S4* sales numbers hey¿

* Or whatever todays' model is called.
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post #12 of 25
Quote:
Originally Posted by Taniwha View Post

I suspect that it is only on AI that anyone could seriously believe the 17.3 Billion bullshit. There has NEVER been a fine even remotely close to this in the EU in antitrust affairs. Dream on if you will, but remember that fantasy is not reality.

 

The upper limit on EU fines is 10% of revenue (worldwide ones, not only in the EU). Samsung being a monolithic chabeol, that can be quite a lot, 10% of their revenue is around 17 B€ indeed.

 

Now, it is true that so far, the biggest single fine was against Intel for 1 billion €. Microsoft paid more, but on several fines.

post #13 of 25
Quote:
Originally Posted by Taniwha View Post

I suspect that it is only on AI that anyone could seriously believe the 17.3 Billion bullshit. There has NEVER been a fine even remotely close to this in the EU in antitrust affairs. Dream on if you will, but remember that fantasy is not reality.

Well, the EU rules for setting fines are pretty clear.

1. The "Basic Fine" can be up to 30% of the related sales in the concerned geographic region, depending on the gravity of the violation.
2. "Aggravating Circumstances" like ongoing misconduct after establishment of the infringement can cause a 100% increase of 1.
3. "Mitigating Circumstances" like e.g. immediately stopping the infringement once the EU investigates will decrease 1., so even a case with high gravity can end up clearly below 30%.
4. Specific increases for deterrence.

The result of 1. through 4. is capped at 10% of the total turnover in the preceding business year. As Samsung reported a total of $188.14 billion in revenue for FY 2012, this cap sits at $18.8 billion.

Looking at statistical data, roughly 50% of EU fines are in the range of 0-1% of the global turnover, roughly 12% are in the 9-10% range. As Samsung's behaviour was not only anti-competitive, but also a clear violation of agreements it entered with every single member country, it can safely be assumed that the gravity here is high. Experts here expect a fine in the area of 10-15% of related sales in the EU after Samsung canceled its demands for sales bans in December '12.
post #14 of 25
Quote:
Originally Posted by Taniwha View Post

I suspect that it is only on AI that anyone could seriously believe the 17.3 Billion bullshit. There has NEVER been a fine even remotely close to this in the EU in antitrust affairs. Dream on if you will, but remember that fantasy is not reality.

Only on AI? That figure is taken directly from the Reuters story. 

post #15 of 25
Quote:
Originally Posted by elroth View Post

Only on AI?

"Could anyone believe it would happen", I think is meant.
post #16 of 25

Making SEP patents toothless is only going to hurt everyone in the long run.

 

You are supposed to be forced to share them, but also make money on them.

 

If the general rule becomes that SEP patents are worthless compared to design patents of even the most trivial thing, there is going to be little incentive to pursue SEP patents anymore.

 

Samsung already has prototype 5G wireless protocols capable of running at gigabit speeds.

Google is working on its own as well.

 

If Android is approaching 70-80% wireless share, they really don't need to get several vendors and networks to all get together and agree on a standard- whatever they choose *is* the standard.

 

So Google patents its wireless standard as its own patent rather than a SEP and Android users get gigabit speeds and everyone else is left on snail networks.  I hope Apple is busy working on its own standard as well.  Everyone agreeing to share things that make sense for everyone to share just doesn't seem like it is going to work.

post #17 of 25
Quote:
Originally Posted by dreyfus2 View Post

Well, the EU rules for setting fines are pretty clear.

1. The "Basic Fine" can be up to 30% of the related sales in the concerned geographic region, depending on the gravity of the violation.
2. "Aggravating Circumstances" like ongoing misconduct after establishment of the infringement can cause a 100% increase of 1.
3. "Mitigating Circumstances" like e.g. immediately stopping the infringement once the EU investigates will decrease 1., so even a case with high gravity can end up clearly below 30%.
4. Specific increases for deterrence.

The result of 1. through 4. is capped at 10% of the total turnover in the preceding business year. As Samsung reported a total of $188.14 billion in revenue for FY 2012, this cap sits at $18.8 billion.

Looking at statistical data, roughly 50% of EU fines are in the range of 0-1% of the global turnover, roughly 12% are in the 9-10% range. As Samsung's behaviour was not only anti-competitive, but also a clear violation of agreements it entered with every single member country, it can safely be assumed that the gravity here is high. Experts here expect a fine in the area of 10-15% of related sales in the EU after Samsung canceled its demands for sales bans in December '12.

Gosh, then Motorola doesn't have a thing to worry about. In fact the EU might have to write them a check.lol.gif
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post #18 of 25
Quote:
Originally Posted by Frood View Post

Making SEP patents toothless is only going to hurt everyone in the long run.

You are supposed to be forced to share them, but also make money on them.

The incentives to submit patents to standards are wide distribution, a bigger market and a normally respectable head start, not licensing fees.
Quote:
Originally Posted by Frood View Post

Samsung already has prototype 5G wireless protocols capable of running at gigabit speeds.
Google is working on its own as well.

If Android is approaching 70-80% wireless share, they really don't need to get several vendors and networks to all get together and agree on a standard- whatever they choose *is* the standard.

So Google patents its wireless standard as its own patent rather than a SEP and Android users get gigabit speeds and everyone else is left on snail networks.  I hope Apple is busy working on its own standard as well.  Everyone agreeing to share things that make sense for everyone to share just doesn't seem like it is going to work.

You are mixing up quite a few things here...

Samsung's "5G" technology is not anywhere close to be used for cellular communication. It uses a millimetre band, which can't travel through any surface whatsoever and only can cover roughly a one mile radius through thin air. Samsung had to develop a 64 antenna array to just make this technology work in light rain... This might be a solution for e.g. 4K wireless streaming in large locations (like concert halls or auditoriums)... it is not a solution for mobile communication.

It does not matter how much market share any vendor has. You can only implement a radio standard after obtaining spectrum and operating licenses from the respective governments. Pretty much not a single government in any free market country will issue such licenses if the used technology depends on non-FRAND licenses.

Apple does not need to work on "its own standard", as it is not in the business of providing mobile networking infrastructure. All they have to do is to pay FRAND royalties for the technologies required to make their devices compatible.
post #19 of 25
Quote:
Originally Posted by Gatorguy View Post

Gosh, then Motorola doesn't have a thing to worry about. In fact the EU might have to write them a check.lol.gif

Haha. A classic win-win situation indeed 1biggrin.gif
post #20 of 25
Quote:
Originally Posted by stelligent View Post

Are you responding to KDarling? His position sounds rational to me. Sure, you'll probably call me a troll, too. Regardless (and regardless of the target of your rant), get a grip, man!

 

If you find KD's position rational then I don't really know what to say. He has repeated this same pattern of cherry picking certain decisions and then applying them to the whole industry over and over on AI. He's very similar to MacRulez, where his pattern is to ignore the results of numerous studies while emphasizing the single one that supports his position.

 

These idiots aren't here to have rational discussions - they are nothing more than shills/trolls posting the same recycled crap over and over, as if the act of repeating it somehow makes it true. They don't contribute anything at all to AI nor do they deserve to be treated with respect.

post #21 of 25
Quote:
Originally Posted by dreyfus2 View Post

Well, the EU rules for setting fines are pretty clear.

1. The "Basic Fine" can be up to 30% of the related sales in the concerned geographic region, depending on the gravity of the violation.
2. "Aggravating Circumstances" like ongoing misconduct after establishment of the infringement can cause a 100% increase of 1.
3. "Mitigating Circumstances" like e.g. immediately stopping the infringement once the EU investigates will decrease 1., so even a case with high gravity can end up clearly below 30%.
4. Specific increases for deterrence.

The result of 1. through 4. is capped at 10% of the total turnover in the preceding business year. As Samsung reported a total of $188.14 billion in revenue for FY 2012, this cap sits at $18.8 billion.

Looking at statistical data, roughly 50% of EU fines are in the range of 0-1% of the global turnover, roughly 12% are in the 9-10% range. As Samsung's behaviour was not only anti-competitive, but also a clear violation of agreements it entered with every single member country, it can safely be assumed that the gravity here is high. Experts here expect a fine in the area of 10-15% of related sales in the EU after Samsung canceled its demands for sales bans in December '12.

Excellent post! Thanks!
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post #22 of 25
Quote:
Originally Posted by Frood View Post

Making SEP patents toothless is only going to hurt everyone in the long run.

 

You are supposed to be forced to share them, but also make money on them.

 

If the general rule becomes that SEP patents are worthless compared to design patents of even the most trivial thing, there is going to be little incentive to pursue SEP patents anymore.

 

Samsung already has prototype 5G wireless protocols capable of running at gigabit speeds.

Google is working on its own as well.

 

If Android is approaching 70-80% wireless share, they really don't need to get several vendors and networks to all get together and agree on a standard- whatever they choose *is* the standard.

 

So Google patents its wireless standard as its own patent rather than a SEP and Android users get gigabit speeds and everyone else is left on snail networks.  I hope Apple is busy working on its own standard as well.  Everyone agreeing to share things that make sense for everyone to share just doesn't seem like it is going to work.

 

SEP's aren't toothless. If you have SEP's related to wireless, then you get royalties on billions of devices per year (literally every single device sold, since they are all based on a standard). Even if your entire portfolio of patents is only worth $0.10 per device that still gives you 100's of millions of dollars per year. That's significant enough for a company to invest in R&D.

 

Google/Android/Samsung don't decide what the standards are - there are SSO's (standard setting organizations) that do. And Android DOES NOT have 70-80% market share. They might be getting close to that for smartphones, but not every device sold is a smartphone. And of all those Android devices, most of them are NOT running LTE nor would they ever be 5G (or whatever standard comes next). You're also forgetting that wireless companies are getting into providing internet services wirelessly to compete with cable and phone companies. They'll also have a say in which standard will be used for 5G.

 

If anything, Samsung has screwed themselves over. They have been abusing SEP's. If Samsung and Cisco both have technology for 5G and an SSO has to pick between two equally good systems, who are they going to choose? The company with a proven track record of patent abuse (Samsung) or the company with a firm stance against SEP abuse (Cisco). Samsung is burning bridges with the SSO's in their battle with Apple because of their patent abuse.

post #23 of 25
Quote:
Originally Posted by EricTheHalfBee View Post
So stop with your usual crap of trying to take a minority position and claim it's what everyone thinks.

 

I didn't say it was what everyone thinks, and no one else in this thread seems to be making such an incorrect assumption.

 

My post was clearly was detailing only what the EUC and ITC have said, in response to a post that was also only talking about those two entities.
 

Both the ITC and EUC have made perfectly clear statements that they think that an injunction is allowable if a FRAND licensee is not willing to negotiate.    This is an indisputable fact, and it's why willingness and intent are key issues.

 

--

 

As for what others think of injunctions over SEPs, even those who think they are generally a bad idea in FRAND cases, do not claim that they're not available at all.

 

For example, in your favorite recent case, when Judge Robart stopped Motorola's request for an injunction against Microsoft, it was dismissed without prejudice.  That means Motorola can try again for an injunction if Microsoft refuses to pay a FRAND royalty.  As he put it:

 

Quote:

"The dismissal is without prejudice. 

 

The court’s determination that injunctive relief is no longer available for the Motorola Asserted Patents is based on the specific circumstances and rulings that have developed in this litigation.

 

If, in the future, those circumstances change in a manner to warrant injunctive relief, Motorola may at that time seek such relief."

 

 

He also noted that:
 
Quote:
"Indeed, Microsoft, or any other implementer, is not free to infringe Motorola’s standard essential patents, and were that to occur, this court’s ruling with respect to injunctive relief may be different."

 

Speaking of Microsoft, in their amicus curae brief in support of Apple and against an injunction, they carefully refrained from saying that injunctions were not available.  They instead repeated that the eBay four prongs must be met first.

 

These are facts. I actually read and research the cases. Instead of personal attacks, perhaps you can calmly find facts to support your opinion as well.  Thanks.

 

post #24 of 25

Yawn. More signal less noiseTS!
 

post #25 of 25
Quote:
Originally Posted by Taniwha View Post

Yawn. More signal less noiseTS!

So you've no comment on how what I said is correct.
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