Ericsson unloads legal barrage against Apple in ongoing patent licensing dispute

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  • Reply 41 of 110
    gatorguygatorguy Posts: 24,261member
    tmay wrote: »
    You are avoiding the issue of basis; the value of the device that royalties are based on. Perhaps you have no opinion, but as I noted, this is what I believe that Apple wants the court to determine, the basis that licensing rates will be applied to.
    I haven't avoided it at all..
    http://forums.appleinsider.com/t/184972/ericsson-unloads-legal-barrage-against-apple-in-ongoing-patent-licensing-dispute#post_2682455
  • Reply 42 of 110
    tmaytmay Posts: 6,362member

    So you find that fair, but Apple does not.

     

    Hence, Apple getting the court to determine the basis in a more equitable way. The case isn't primarily about Apple trying to avoid licensing fees, just a reduction in rate.

  • Reply 43 of 110
    gatorguygatorguy Posts: 24,261member
    tmay wrote: »
    So you find that fair, but Apple does not.

    Hence, Apple getting the court to determine the basis in a more equitable way.
    Apple doesn't say that's the problem. It could be cross-licensing which was apparently the major hold-up for Apple's license negotiations with Nokia a couple years back. As many of these patents are NOT SEP don't you think Ericsson should be able to ask whatever they wish for them?
  • Reply 44 of 110
    tmaytmay Posts: 6,362member
    Quote:
    Originally Posted by Gatorguy View Post





    Apple doesn't say that's the problem. It could be cross-licensing which was apparently the major hold-up for Apple's license negotiations with Nokia a couple years back.

    In Europe, licensing of SEP can not be contingent on cross licensing. If that is the issue, I would expect the U.S. Courts to follow European precedents.

     

    Still, not seeing where Apple stated any specifics in either case. Basically, its just speculation.

     

    If is is non standards related, you are correct, Ericsson could ask whatever it wants; again speculation.

  • Reply 45 of 110
    gatorguygatorguy Posts: 24,261member
    tmay wrote: »
    In Europe, licensing of SEP can not be contingent on cross licensing. If that is the issue, I would expect the U.S. Courts to follow European precedents.
    Why? Does the EU follow US precedent?

    Note too that Ericsson claims they "offered to have a (US Federal) court determine fair licensing terms by which both companies would be bound" and Apple refused.

    EDIT; That earlier offer is discussed here. BTW, Apple fired the first salvo. this whole actions reminds me of Apple's "negotiations" with Nokia from a few years ago with several back and forth lawsuits before they settled out-of-court.
    http://www.reuters.com/article/2015/01/14/us-lm-ericsson-apple-idUSKBN0KN0KI20150114
  • Reply 46 of 110
    Buy the company. Open the patents for use by anyone. Close the doors, lay off every last employee. Never get sued again.
  • Reply 47 of 110

    You'd think that Texas would realise that Lawyers, by deliberately choosing to have their cases heard in Texas, are taking the piss.

  • Reply 48 of 110
    Quote:
    Originally Posted by tmay View Post

     

    So you find that fair, but Apple does not.

     

    Hence, Apple getting the court to determine the basis in a more equitable way. The case isn't primarily about Apple trying to avoid licensing fees, just a reduction in rate.


     

    @tmay :  Apple used that exact royalty basis (entire market value) theory against Samsung and won in 2012.  And as of December of 2014, Apple continued to defend the verdict at CAFC.  Now, Apple wants the apportionment rule (smallest saleable unit) to be applied in this case (see ¶ 6 of Apple's complaint) and calls Ericsson's licensing offer "abusive licensing practices."

     

    Apple find that fair when it's convenient for them, unfair when it's not.

  • Reply 49 of 110
    tmaytmay Posts: 6,362member
    Quote:
    Originally Posted by tooltalk View Post

     

     

    @tmay :  Apple used that exact royalty basis (entire market value) theory against Samsung and won in 2012.  And as of December of 2014, Apple continued to defend the verdict at CAFC.  Now, Apple wants the apportionment rule (smallest saleable unit) to be applied in this case (see ¶ 6 of Apple's complaint) and calls Ericsson's licensing offer "abusive licensing practices."

     

    Apple find that fair when it's convenient for them, unfair when it's not.


    You might remember that Samsung was getting sued for copying Apple's UI, and Ericsson is providing RF IP that is embedded in a device that can be sold as a smallest saleable unit, an electronic component. Now it might be that there is more IP in play than RF technology, but since I don't know the details, I'll speculate like everyone else that Apple is negotiating basis, and also attempting to invalidate some IP. All of this is quite ordinary in negotiations, as is Ericsson's response; business as usual.

     

    So, as I noted previously; is a smartphone a computer or a communication device?

     

    Look at the iPhone without its SIM card. It's completely usable as a communication device via WiFi, which is provided via a Broadcom chip. Would you notice any difference other that a loss in mobility? Sure, cellular communication is important, but it says that the basis shouldn't be the iPhone price.

     

    It's possible to operate a few things on the iPhone without the UI, sound volume as an example, but everything else must be accessed through the UI, and Apple has generated it growth primarily on the application of its UI on a number of different devices. The fact that Apple sells the iPad models with and without cellular communication is telling; it's a $130.00 and of course th

     

    Should Ericsson's basis for the iPhone be some fraction of the $130.00? Probably, but decidedly not of the entire iPhone cost.

  • Reply 50 of 110
    Quote:
    Originally Posted by tmay View Post

     

    You might remember that Samsung was getting sued for copying Apple's UI, and Ericsson is providing RF IP that is embedded in a device that can be sold as a smallest saleable unit, an electronic component. Now it might be that there is more IP in play than RF technology, but since I don't know the details, I'll speculate like everyone else that Apple is negotiating basis, and also attempting to invalidate some IP. All of this is quite ordinary in negotiations, as is Ericsson's response; business as usual.

     

    So, as I noted previously; is a smartphone a computer or a communication device?

     

    Look at the iPhone without its SIM card. It's completely usable as a communication device via WiFi, which is provided via a Broadcom chip. Would you notice any difference other that a loss in mobility? Sure, cellular communication is important, but it says that the basis shouldn't be the iPhone price.

     

    It's possible to operate a few things on the iPhone without the UI, sound volume as an example, but everything else must be accessed through the UI, and Apple has generated it growth primarily on the application of its UI on a number of different devices. The fact that Apple sells the iPad models with and without cellular communication is telling; it's a $130.00 and of course th

     

    Should Ericsson's basis for the iPhone be some fraction of the $130.00? Probably, but decidedly not of the entire iPhone cost.




    Samsung in 2012 was sued for copying specific design elements in both hardware and software UI. One might just as well argue that those particular infringing elements aren't really essential to the operation of the device since other UI's (such as stock android, which was designed specifically to work around several patents like slide-to-unlock) allow the user to operate the smartphone just as well. As Samsung's devices sold for about the same price as, say, LG's, those infringing elements clearly didn't add much value over non-infringing alternatives.

  • Reply 51 of 110
    tmaytmay Posts: 6,362member
    Quote:

    Originally Posted by d4NjvRzf View Post

     



    Samsung in 2012 was sued for copying specific design elements in both hardware and software UI. One might just as well argue that those particular infringing elements aren't really essential to the operation of the device since other UI's (such as stock android, which was designed specifically to work around several patents like slide-to-unlock) allow the user to operate the smartphone just as well. As Samsung's devices sold for about the same price as, say, LG's, those infringing elements clearly didn't add much value over non-infringing alternatives.


    The elements of Apple's iOS UI  aren't essential, so why did Samsung feel the need to copy, and why Apple? As you say, they could have used stock Android.

     

    Could it be that there was consumer preference for the UI that Apple had delivered? Why else would Samsung have gone to the trouble of copying any UI at all if they were all the same to the consumer? I will say that it was likely a very profitable move for Samsung.

  • Reply 52 of 110
    ash471ash471 Posts: 705member
    And, as usual, the lawyers, judges and the court system are the only real winners. Win or loose, they all get paid.
    And laywers should get paid. They are service providers. If they provide services they should get paid.
    It's just like if you plug your drain by dumping bacon grease down it everyday. If you call the plummer to fix it, expect to pay.
    Lawyers are glorified plummers for complex business transactions. The more complex the transactions, the more they charge.
  • Reply 53 of 110
    Quote:

    Originally Posted by Gatorguy View Post

     
    Quote:

    Originally Posted by Eric Swinson View Post





    If I'm not mistaken Samsung tried to force reciprocation on use of Apple's patents through a rate reduction and got their hand slapped in court.


    I think you'd be mistaken if you think there's anything illegal about cross-licensing.



    There is nothing illegal about cross-licensing -- what SamsStunk did though was tried to charge totally out of line fees for the lic. (FRAND) and then said they would lower to something closer to legal as long as Apple x-lic. the stuff they wanted. That is where they got smacked if memory serves me correctly. 

  • Reply 54 of 110
    gatorguygatorguy Posts: 24,261member

    There is nothing illegal about cross-licensing -- what SamsStunk did though was tried to charge totally out of line fees for the lic. (FRAND) and then said they would lower to something closer to legal as long as Apple x-lic. the stuff they wanted. That is where they got smacked if memory serves me correctly. 
    I don't know that your memory is accurate. I don't find anything about Sammy getting smacked for asking for cross-licensing. Perhaps you have a link to one?

    The EU did investigate on a different Samsung/Apple issue where Sammy wanted an injunction on Apple for not taking a license to their SEP portfolio but that wasn't specific to cross-licensing.

    Samsung reportedly wanted 2.4% of the wholesale device cost, but would lower that rate if Apple would cross-license their own (UMTS?) patents. Apple said there was no evidence that 2.4% was the standard Samsung rate in the first place and refused to take a license which Sammy used as an excuse for an injunction request. Apple complained loudly and the EU heard.

    As a result Samsung agreed to not pursue any injunctions for SEP infringement for 5 years which the EU accepted as an appropriate cure. Odd really as I would have thought the EU would simply say no injunctions for SEP's period but they did not. Apparently even they are not yet ready to say injunctions are never appropriate if a company doesn't take a license to FRAND-pledged IP.
  • Reply 55 of 110
    tmaytmay Posts: 6,362member
    Quote:
    Originally Posted by Gatorguy View Post





    I don't know that your memory is accurate. I don't find anything about Sammy getting smacked for asking for cross-licensing. Perhaps you have a link to one?



    The EU did investigate on a different Samsung/Apple issue where Sammy wanted an injunction on Apple for not taking a license to their SEP portfolio but that wasn't specific to cross-licensing.



    Samsung reportedly wanted 2.4% of the wholesale device cost, but would lower that rate if Apple would cross-license their own (UMTS?) patents. Apple said there was no evidence that 2.4% was the standard Samsung rate and refused to take a license which Sammy used as an excuse for an injunction request. Apple complained loudly and the EU heard.



    As a result Samsung agreed to not pursue any injunctions for SEP infringement for 5 years which the EU accepted as an appropriate cure. Odd really as I would have thought the EU would simply say no injunctions for SEP's period but they did not. Apparently even they are not yet ready to say injunctions are never appropriate if a company doesn't take a license to FRAND-pledged IP.

    There was an issue with cross licensing and SEP's with the result that in Europe, injunctions will not be granted for SEP negotiations ongoing and in "good faith", that attempts to invalidate patents in SEP negotiations would not incur injunctions, and cross licensing could not be used as leverage to negotiate SEP licensing fees. As I stated earlier, the U.S. Courts seem to be adopting the same path of "good faith" negotiations not incurring injunctions, and injunctions would only be used in the case of actual refusal to pay. The Courts would decide when "good faith" negotiations were stalled and required a Courts determination of licensing or if injunctions were appropriate.

     

    Apple is tough in negotiations but does negotiate in good faith, the same as most any other business.

  • Reply 56 of 110
    gatorguygatorguy Posts: 24,261member
    tmay wrote: »
    There was an issue with cross licensing and SEP's with the result that in Europe, injunctions will not be granted for SEP negotiations ongoing and in "good faith", that attempts to invalidate patents in SEP negotiations would not incur injunctions, and cross licensing could not be used as leverage to negotiate SEP licensing fees. As I stated earlier, the U.S. Courts seem to be adopting the same path of "good faith" negotiations not incurring injunctions, and injunctions would only be used in the case of actual refusal to pay.

    Apple is tough in negotiations but does negotiate in good faith, the same as any other business.
    Do you have a link where the EU that says cross-licensing discounts can't be offered in SEP licensing? That was supposedly what Samsung was offering and that Apple refused but not because of the cross-license offer but because to the 2.4% royalty rate in the first place. Essentially Apple's complaint to the EU was that it was Samsung not negotiating in good faith as they had not shown 2.4% was their standard royalty rate.

    If there's somewhere the EU stated that cross-licensing is illegal bundled with SEP licensing I've not been able to find it.
  • Reply 57 of 110
    tmaytmay Posts: 6,362member
    Quote:

    Originally Posted by Gatorguy View Post





    Do you have a link where the EU that says cross-licensing discounts can't be offered in SEP licensing? That was supposedly what Samsung was offering and that Apple refused but not because of the cross-license offer but because to the 2.4% royalty rate in the first place. Essentially Apple's complaint to the EU was that it was Samsung not negotiating in good faith.



    If there's somewhere the EU stated that cross-licensing is illegal bundled with SEP licensing I've not been able to find it.

    Illegal only if the licensee is forced to negotiate cross licensing of non SEP IP in order to obtain SEP licensing. My recollection is that this was the big issue with the Nokia/Apple negotiations some years ago.

  • Reply 58 of 110
    gatorguygatorguy Posts: 24,261member
    tmay wrote: »
    Illegal only if the licensee is forced to negotiate cross licensing of non SEP IP in order to obtain SEP licensing. My recollection is that this was the big issue with the Nokia/Apple negotiations some years ago.
    Apple eventually caved and did in fact license back some of their own IP, even some specific to the iPhone, in agreeing to take a license to Nokia's SEP patent portfolio. That would indicate that the EU did not find it to be illegal wouldn't it? Otherwise why would Apple agree to a cross-licensing agreement offering patents to IP that makes an iPhone an iPhone? I'm quite certain that would not have been Apple's preferred choice.

    EDIT: For those that don't believe Apple licensed some of their iPhone patents to Apple as a condition of taking the license to Nokia SEP's here is Apple's statement after the agreement:

    “Apple and Nokia have agreed to drop all of our current lawsuits and enter into a license covering some of each others’ patents, but not the majority of the innovations that make the iPhone unique,” the company said. “We’re glad to put this behind us and get back to focusing on our respective businesses.”

    So yes by Apple's own admission some IP specific to the iPhone and it's features was licensed to Nokia, just not the majority of it.
  • Reply 59 of 110
    Quote:

    Originally Posted by ash471 View Post

     
    Quote:

    Originally Posted by SteveSimpkin View Post



    And, as usual, the lawyers, judges and the court system are the only real winners. Win or loose, they all get paid.


    And laywers should get paid. They are service providers. If they provide services they should get paid.

    It's just like if you plug your drain by dumping bacon grease down it everyday. If you call the plummer to fix it, expect to pay.

    Lawyers are glorified plummers for complex business transactions. The more complex the transactions, the more they charge.



    Ethics and morality dictate that lawyers should provide a service of some real value and I would argue that at the point that the tactics they use meet or exceed the value of the service they provide then something is wrong. There are areas of law practice where the lawmakers of come in and said that there is a maximum amount that can be charged. I don't see many lawyers clamoring for that business. As in most all businesses there are those that practice out of bounds (or teetering on the edge) but most I know are doing it for a living -- there are those who would gladly come poor bacon grease, etc... down you cleanout and then leave their card stuck in your door.

     

    Just as trying to modify the tax laws laws are very difficult tort is also difficult to reform and IP law. Just because they are difficult does not mean we should not be working towards a bore even handed system

  • Reply 60 of 110
    Quote:

    Originally Posted by Gatorguy View Post

     
    Quote:

    Originally Posted by tmay View Post



    Illegal only if the licensee is forced to negotiate cross licensing of non SEP IP in order to obtain SEP licensing. My recollection is that this was the big issue with the Nokia/Apple negotiations some years ago.


    Apple eventually caved and did in fact license back some of their own IP, even some specific to the iPhone, in agreeing to take a license to Nokia's SEP patent portfolio. That would indicate that the EU did not find it to be illegal wouldn't it? Otherwise why would Apple agree to a cross-licensing agreement offering patents to IP that makes an iPhone an iPhone? I'm quite certain that would not have been Apple's preferred choice.



    I suspect it was a simple choice of ROI. Somebody said 'how long are we going to flog this dead horse' and all parties met with something they could live with. Isn't the definition of a compromise when all parties leave with an agreement that none are completely happy with?

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