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

Posted:
in General Discussion edited January 2014
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.
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Comments

  • Reply 1 of 24
    gtrgtr Posts: 3,231member
    If Samsung wants to settle, fine.

    FINE!
  • Reply 2 of 24
    teejay2012teejay2012 Posts: 274member
    Maybe the EU could give some instructions on SEP to the ITC.
  • Reply 3 of 24
    kdarlingkdarling Posts: 1,640member

    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.

  • Reply 4 of 24


    ^ 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.

  • Reply 5 of 24
    gatorguygatorguy Posts: 20,287member
    kdarling wrote: »
    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.
  • Reply 6 of 24
    stelligentstelligent Posts: 2,680member

    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!

  • Reply 7 of 24
    taniwhataniwha Posts: 347member
    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.
  • Reply 8 of 24
    tallest skiltallest skil Posts: 43,399member
    taniwha wrote: »
    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.
  • Reply 9 of 24
    loptimistloptimist Posts: 113member
    ^ 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...
  • Reply 10 of 24
    philboogiephilboogie Posts: 7,438member
    gtr wrote: »
    If Samsung wants to settle, fine.

    FINE!

    Bit like their Galaxy S4* sales numbers hey¿

    * Or whatever todays' model is called.
  • Reply 11 of 24

    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.

  • Reply 12 of 24
    dreyfus2dreyfus2 Posts: 1,070member
    taniwha wrote: »
    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.
  • Reply 13 of 24
    elrothelroth Posts: 1,201member

    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. 

  • Reply 14 of 24
    tallest skiltallest skil Posts: 43,399member
    elroth wrote: »
    Only on AI?

    "Could anyone believe it would happen", I think is meant.
  • Reply 15 of 24
    froodfrood Posts: 771member


    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.

  • Reply 16 of 24
    gatorguygatorguy Posts: 20,287member
    dreyfus2 wrote: »
    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:
  • Reply 17 of 24
    dreyfus2dreyfus2 Posts: 1,070member
    frood wrote: »
    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.
    frood wrote: »
    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.
  • Reply 18 of 24
    dreyfus2dreyfus2 Posts: 1,070member
    gatorguy wrote: »
    Gosh, then Motorola doesn't have a thing to worry about. In fact the EU might have to write them a check.:lol:

    Haha. A classic win-win situation indeed :D
  • Reply 19 of 24

    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.

  • Reply 20 of 24
    philboogiephilboogie Posts: 7,438member
    dreyfus2 wrote: »
    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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