Samsung to call Motorola's "one bullet to kill" witness to justify iPhone royalty demands

Posted:
in iPhone edited January 2014
After working to defend against for two weeks of Apple's copying claims, Samsung has gone on the defensive to claim that Apple owes it steep royalties for infringing its 3G standard essential patents, using the same witness called by Google's Motorola Mobility to bring standards essential patent claims against Microsoft.

According to a report by Florian Mueller of FOSS Patents, Samsung has listed two expert witnesses conversant in justifying high patent royalty rates for standard essential patent claims that are actually subject to "Fair, Reasonable and Nondiscriminatory" licensing terms.

One bullet to kill

One name on Samsung's witness disclosure list, David J. Teece, a professor at the University of California, Berkeley, was recently used by Google's Motorola Mobility case against Microsoft related to H.264 patents.

Teece testified that a single standards essential patent claim could be worth as much or more than the large number of other patents contributing to a given industry standard because "it takes only one bullet to kill," an allusion to the fact that one wouldn't need a clip full of bullets to take down a opponent, so therefore one patent should similarly be enough to destroy the ability of another company to compete in the market.

In using that phrase, Teece was justifying the 2.25 percent royalty rate Motorola was demanding from Microsoft on sales of Windows 7, Xbox and other products that use the H.264 video standard portfolio, the same nightmare scenario Google used to vilify H.264 before acquiring Motorola and continuing its H.264 FRAND patent offensive.

Microsoft argued that Motorola's demands of $4 billion in annual royalties for the 50 standards essential patents it contributes to the H.264 standard were clearly out of line with its FRAND obligations, contrasting the $6.5 million it pays annually for the other 2,339 patents essential to H.264.



ITC Judge Shaw blocked Motorola's efforts to seek a US import injunction against Microsoft for refusing to pay Motorola's 2.25 percent demands, noting that, "the evidence shows that the royalty rate offered by Motorola of 2.25%, both as to its amount and the products covered, could not possibly have been accepted by Microsoft," and that "the evidence supports Microsoft's conclusion that Motorola was not interested in good faith negotiations and in extending a [F]RAND license to it."

Defending Android through unFRANDly patent claims

Motorola is, coincidentally, demanding the same 2.25 percent royalty from Apple's iOS devices related to standard essential patents it owns in the 3G standard patent pool.

In a Dutch case, Samsung similarly demanded a 2.4 percent royalty from Apple for each of several of its standard essential patents (albeit charged against the price price of a relevant chip, not the entire device).

However, even in that case Samsung's royalty claim rate and injunction efforts were thrown out because its royalty demands was deemed so unreasonable by the court that it determined Samsung had failed to honor its FRAND commitments and had not negotiated in good faith.

But with so little leverage in its case against Apple, where it has repeatedly stumbled with court procedures even as Apple pressed its case of willing, purposeful infringement of its design and technical patents, Samsung has stepped up the 2.4 percent royalty demands that it has asserted at least twice before in other cases worldwide.

"By far and away the worst expert witness I've seen"

In pushing its royalty claim offensive as its best defense, Samsung's use of Teece has necessitated what Mueller called "ridiculous claims," going so far to question whether "the credibility of those institutions [represented by expert witnesses, specifically UCB] may be affected by highly problematic or downright preposterous claims made by certain individuals."

With regard to FRAND, Mueller called Teece "by far and away the worst 'expert witness' I've seen." Mueller also noted Samsung has listed Swedish consultant Eric Stasik, of whom he said "we can expect more of the same."

Stasik was cited as making a similar "one bullet to kill" comment on the GSM standard, writing that "the relationship between the number of patents and the total royalty rate is not linear" and testifying that a single patent may be worth 2.5 percent royalty.

Apple sought to present testimony from an expert witness Samsung had earlier used in a UK case to defend itself from FRAND-pledged standards essential patent claims, noting that the company previously held a very different view on patent abuse when the shoe was on the other foot. However, Judge Koh ruled that the British case involved different parties, different patents and different standards, making it insufficiently relevant to the case at hand.
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Comments

  • Reply 1 of 40


    Seems to be Samsung attorneys are using a classic form of negotiation - when things aren't going your way, deflect attacks by changiing the subject.  I have a feeling the judge isn't going to like this very much as I'm not seeing how they can relate this back to the case at hand.

  • Reply 2 of 40


    nuclear war with patent portfolios.

  • Reply 3 of 40


    Mueller is a Microsoft and Oracle paid shill. He can't possibly be the only patent analyst on the planet. Does he really need to be quoted in every article? Honestly.


     


    2.25 percent royalty rate is illogical and pretty absurd though. 

  • Reply 4 of 40
    MacProMacPro Posts: 17,779member
    Should that have read ..."... gone on the offensive ..." ?
  • Reply 5 of 40
    Wouldn't that require another trial?
  • Reply 6 of 40

    Quote:

    Originally Posted by thataveragejoe View Post


    Mueller is a Microsoft and Oracle paid shill. He can't possibly be the only patent analyst on the planet. Does he really need to be quoted in every article? Honestly.


     



     


    Actually this Mueller guy is indeed the only patent analyst on the web that would constantly report back the details of the trials. Yes he's pretty obviously biased (just check how mad he was after GOOG won the case against Oracle), but there's really not alternative. People simply have to remember he's biased and don't read the stuffs he posted based on face value and then that'd be fine.

  • Reply 7 of 40
    pendergastpendergast Posts: 1,358member
    <span style="color:rgb(24,24,24);font-family:'lucida grande', verdana, helvetica, sans-serif;line-height:normal;background-color:rgb(226,225,225);">Mueller is a Microsoft and Oracle paid shill. He can't possibly be the only patent analyst on the planet. Does he really need to be quoted in every article? Honestly.</span>

    Whoever is quoted in the article, be it a third party or a sworn-in expert in the case, they're all "paid schills" as they're on someone's payroll.

    Don't take their words at face value; analyze the merits of their arguments instead.
  • Reply 8 of 40
    slurpyslurpy Posts: 5,062member


    Didn't know where else to post this and wanted to share my thoughts. In other news, Samsung launched its latest tablet today. This, from the Verge, has been consistent with most reviews. It proved why specs are completely irrelevant by themselves, and why the next person to claim a tablet/phone is superior because of some higher specs, or iProduct X is underpowered because of some numbers, should be kicked in the nuts real hard: 


     


     


    Quote:



    All of these additions makes the Note extremely slow, even though it has a ridiculously fast 1.4GHz quad-core Exynos processor and 2GB of RAM. On paper, that’s basically more powerful than any other mainstream mobile device, but the Note is quite laggy in day-to-day use. Just flipping between homescreens can result in some stuttering when you hit a widget-heavy layout, and I even noticed occasional slowdowns when simply swiping the lock screen to open the device. The Note is simply not as smooth or responsive as the Nexus 7, and it’s so far behind the iPad that the comparison doesn’t really seem fair. Add in all the bloop bloop sounds and the whole thing just feels chubby.




     


    A 1.4 Ghz, quad core processor, 2GB of RAM, power just a FRACTION of the amount of pixels of the new iPad, can't even get through the lock screen without slowdown. This is the kind of shit that shows how much SAmsung REALLY cares about the user experience, contrary to the horse-shit they spew out. Their innovation is skinning the hell out of Android with their shitty skin, and managing to make incredibly hardware powerful choke simply by swiping around the OS. This is not some cheap, bottom bin tablet. This is a flagship product that costs the same as a new iPad. Not ONCE has my iPad stuttered, lagged, or even skipped a frame, all while pushing more pixels than almost any other device. When Samsung is willing to release a $500 product like this, at this time, it makes me wonder what aspect of the company people are so enamored with. It shows an utter lack of care and of respect to the consumer, and makes them out to be liars when they've been going on and on at the trial about how much they 'care'.  And it shows why with competition like this, the iPad deserves to dominate the field. This is the shit they release while attempting to reverse engineer the iPad and duplicating how it feels. Imagine what we'd be stuck with if the iPad/iPhone didn't exist. 

  • Reply 9 of 40
    icoco3icoco3 Posts: 1,454member


    To this day, I do not see how in the world a patent royalty can be charged against a finished product.  It should be applied to whoever makes the actual chip that is bought and placed into a product.  Is someone just getting greedy?

     

  • Reply 10 of 40
    The defense lawyers are all over the map. Their next witness: Chewbacca.
  • Reply 11 of 40
    magic_almagic_al Posts: 325member


    "It takes only one bullet to kill."


     


    So the head of Samsung is a Bond villain?

  • Reply 12 of 40
    SpamSandwichSpamSandwich Posts: 30,274member


    FRAND royalty rates must be applied evenly to everyone, or the patent holder risks losing their patent.

  • Reply 13 of 40
    gatorguygatorguy Posts: 19,449member

    Quote:

    Originally Posted by drobforever View Post


     


    Actually this Mueller guy is indeed the only patent analyst on the web that would constantly report back the details of the trials. Yes he's pretty obviously biased (just check how mad he was after GOOG won the case against Oracle), but there's really not alternative. People simply have to remember he's biased and don't read the stuffs he posted based on face value and then that'd be fine.



    In some cases Groklaw will report a lot more details than Mr. Mueller, even going so far as to re-post the actual court transcripts. I find that very helpful as it puts the comments and questions from cases in context rather than relying on someone else's spin on the facts they want you or me to know. Of course most reader's don't want to bothered or don't have the time for that much iformation and prefer to rely on someone's synopsis of what's going on. The problem in that is there's always the real danger that you're only seeing what that source considers supporting "facts" for the view they want you to get. Me, I love court transcripts, with even live courtroom blogs sometimes much better in reporting details that FOSSPatents may have overlooked.


     


    There's other times that a particular issue may reflect poorly on either Microsoft or Oracle and won't get a mention at FOSSPatents at all. Case in point the recent problem that Microsoft is having with the EU over breaking a previous settlement agreement, potentially costing them another billion or so. Oracle getting denied by the EU on a first-sale doctrine? Nope, nothing at FOSSPatents on that one either as it was generally considered unfair on the part of Oracle to begin with.


    http://eutopialaw.com/2012/07/10/the-cjeu-copyright-and-the-first-sale-doctrine/


    http://www.nytimes.com/2012/07/18/technology/europe-reopens-antitrust-hostillities-with-microsoft.html?pagewanted=all


     


    Mr. Mueller's blogs do offer great insight on patent issues, and he's one of my go-to sources. He's not the only one tho.

  • Reply 14 of 40

    Quote:

    Originally Posted by Gatorguy View Post


    In some cases Groklaw will report a lot more details than Mr. Mueller, even going so far as to re-post the actual court transcripts. I find that very helpful as it puts the comments and questions from cases in context rather than relying on someone else's spin on the facts they want you or me to know. Of course most reader's don't want to bothered or don't have the time for that much iformation and prefer to rely on someone's synopsis of what's going on. The problem in that is there's always the real danger that you're only seeing what that source considers supporting "facts" for the view they want you to get. Me, I love court transcripts, with even live courtroom blogs sometimes much better in reporting details that FOSSPatents may have overlooked.


     


    There's other times that a particular issue may reflect poorly on either Microsoft or Oracle and won't get a mention at FOSSPatents at all. Case in point the recent problem that Microsoft is having with the EU over breaking a previous settlement agreement, potentially costing them another billion or so. 


     


    Mr. Mueller's blogs do offer great insight on patent issues, and he's one of my go-to sources. He's not the only one tho.



     


    I'd say that if you want to get the most clear picture, you have to read both Groklaw and Foss Patents.  Both have their biases (Groklaw is Pro-Google, Foss Patents is Pro Apple/Microsoft/Oracle) but together you get a pretty decent picture.

  • Reply 15 of 40
    sleepy3sleepy3 Posts: 244member

    Quote:

    Originally Posted by icoco3 View Post


    To this day, I do not see how in the world a patent royalty can be charged against a finished product.  It should be applied to whoever makes the actual chip that is bought and placed into a product.  Is someone just getting greedy?

     



    I agree here. And i ain't no Apple defender, you can check my posts to see. 


     


    If they get away with this, then Best buy must be infringing too, since they sell the ipad that has the chip that has the patent (OK, bad example, but so what). The line has to stop somewhere. 


     


    EDIT: Just thought of better analogy!!!


     


    Its like if someone selling custom made computers has to pay MPEG-LA for a license for video codecs even though they already paid for the copy of windows to put on the machine. BOOOM!!! I'm an analogy GENIUS!!!

  • Reply 16 of 40
    icoco3icoco3 Posts: 1,454member

    Quote:

    Originally Posted by sleepy3 View Post


    .... BOOOM!!! I'm an analogy GENIUS!!!


     


    Calm down now.....  image

  • Reply 17 of 40
    sflocalsflocal Posts: 4,310member

    Quote:

    Originally Posted by sleepy3 View Post


    I agree here. And i ain't no Apple defender, you can check my posts to see. 


     


    If they get away with this, then Best buy must be infringing too, since they sell the ipad that has the chip that has the patent (OK, bad example, but so what). The line has to stop somewhere. 


     


    EDIT: Just thought of better analogy!!!


     


    Its like if someone selling custom made computers has to pay MPEG-LA for a license for video codecs even though they already paid for the copy of windows to put on the machine. BOOOM!!! I'm an analogy GENIUS!!!





    Intel can charge everyone for purchasing a PC or Laptop with an x86 chip in it.  

  • Reply 18 of 40
    blitz1blitz1 Posts: 410member
    [QUOTE]A 1.4 Ghz, quad core processor, 2GB of RAM, power just a FRACTION of the amount of pixels of the new iPad, can't even get through the lock screen without slowdown. This is the kind of shit that shows how much SAmsung REALLY cares about the user experience, contrary to the horse-shit they spew out. Their innovation is skinning the hell out of Android with their shitty skin, and managing to make incredibly hardware powerful choke simply by swiping around the OS. This is not some cheap, bottom bin tablet. This is a flagship product that costs the same as a new iPad. Not ONCE has my iPad stuttered, lagged, or even skipped a frame, all while pushing more pixels than almost any other device. When Samsung is willing to release a $500 product like this, at this time, it makes me wonder what aspect of the company people are so enamored with. It shows an utter lack of care and of respect to the consumer, and makes them out to be liars when they've been going on and on at the trial about how much they 'care'.  And it shows why with competition like this, the iPad deserves to dominate the field. This is the shit they release while attempting to reverse engineer the iPad and duplicating how it feels. Imagine what we'd be stuck with if the iPad/iPhone didn't exist[/QUOTE]

    Feeling better? I sure think such a rant is less expensive than a visit to the shrink
  • Reply 19 of 40
    uiguyuiguy Posts: 27member


    I am hoping someone can offer an explanation here...


     


    I have been under the impression that FRAND is used to describe Fair, Reasonable, and Non-Discriminatory licensing terms.  As mentioned above, the terms must be the same for everyone.


     


    OK. With that in mind, I was also under the impression that technology had to be established in FRAND terms before it could become part of an approved technical standards.  This is basic economics.  I get to take a little from everyone, but since everyone is going to use it, I am going to get to make a bunch of money anyhow.


     


    Wouldn't the pricing have to be set at that time?  Or do companies have the ability to go back and 're-adjust' the price after the fact?

  • Reply 20 of 40
    jragostajragosta Posts: 10,473member
    uiguy wrote: »
    I am hoping someone can offer an explanation here...

    I have been under the impression that FRAND is used to describe Fair, Reasonable, and Non-Discriminatory licensing terms.  As mentioned above, the terms must be the same for everyone.

    OK. With that in mind, I was also under the impression that technology had to be established in FRAND terms before it could become part of an approved technical standards.  This is basic economics.  I get to take a little from everyone, but since everyone is going to use it, I am going to get to make a bunch of money anyhow.

    Wouldn't the pricing have to be set at that time?  Or do companies have the ability to go back and 're-adjust' the price after the fact?

    Pricing does not have to be the same for all licensees - just 'fair, reasonable, and non-discriminatory'. Essentially, if you charge two licensees very different amounts, you need to have a reasonable justification - volume, cross licensing, marketing value, etc. If you try to charge one licensee $0.10 and the other one $10.00, you probably won't get away with it.

    This is, of course, one of the reasons why the proposed flat percentage of selling price is unreasonable. If Mercedes puts a device in their $100,000 car which uses Motorola's technology, a 2.25% license would be $2,250 - or a couple of orders of magnitude more than Motorola charges to license a cell phone.

    The recent decision was very, very important in that regard. Motorola tried to get a court to issue an injunction preventing Apple from selling their products because they wouldn't agree to the proposed license terms. The court said that they would not do so. The reasoning is apparently that since the patent is FRAND, the licensor HAS to license it, the only question is the terms. And if the two parties are unable to agree on what's fair, the court will do so for them upon request. So it's not like the licensee will lose anything by denying the injunction.

    A non-FRAND patent is different. The licensor (generally) has no obligation to license their technology, so an injunction can be appropriate. If the two parties can't agree on terms, then the 'licensee' has no rights and therefore can not sell the product.
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