Apple's manufacturers: Qualcomm's 'China Ban' just a distraction technique

Posted:
in iPhone edited December 2018
Qualcomm's patent infringement suit seeking an import ban on Apple's iPhones in China is a desperate distraction staged by the imperiled chipmaker in an attempt to draw attention away from a series of critical lawsuits it faces from device makers, global regulators, and a class action of consumers which all challenge its core business model, according to the attorney representing Apple's manufacturers in a recent interview.


Theodore Boutrous Jr. represents manufacturers suing Qualcomm over illegal business practices

Qualcomm's iPhone China Ban hype

Earlier this month, Qualcomm won a preliminary order in China's Fuzhou Intermediate People's Court, banning the import and sale of iPhones with older versions of iOS installed out-of-the-box.

The news managed to bamboozle a variety of analysts, including Samik Chatterjee from J.P. Morgan, who wrote up a note imagining that Apple might lose tremendous revenues from hypothetically lost sales.

However, the nature of Qualcomm's legal filings in China shares a lot in common with the company's marketing of its latest Snapdragon 855, a chip it portrayed as an unprecedented technical marvel when in reality it is well over a year behind Apple's latest A12 Bionic, was swaddled in dubious claims that verged from exaggerations into the purely ridiculous, and which faces serious issues in finding many premium buyers interested it it.

Prominent journalists who were bamboozled by Snapdragon marketing have also sought to make hay out of Qualcomm's legal challenge in China, without bothering to understand the issues involved.

'Not a blow, a distraction technique'

In an interview conducted by Bloomberg, Theodore Boutrous Jr., an attorney representing Apple's contract manufacturers, was asked, "this decision in China that bans effectively six older models of the iPhone, how big a blow is that?"

Boutrous answered, "it's not a blow at all. It really is part of Qualcomm's distraction technique. They went in secret and got an order my clients-- the companies that build the iPhones and iPads-- didn't even know about it. But it turns out it's an order that relates to software; it doesn't have anything to do with the cellular technology that's an issue in the lawsuits that we have against Qualcomm for my clients which are seeking about $9 billion in damages."

Instead, Boutrous presented the order as part of "all sorts of distraction techniques [by Qualcomm] meant to take people's attention away from the fact that they're facing three big lawsuits here in the United States that challenge their business model to the core."

Qualcomm working to leverage acquired patents in defense

Qualcomm sought to ban both the import and (unsuccessfully) the manufacturing of Apple's iPhones in China. It has complained that Apple continues to sell its products there and has attempted to expand the order to involve Apple's newest iPhone models.

However, in a statement to AppleInsider last week, Apple flatly said that "Qualcomm's effort to ban our products is another desperate move by a company whose illegal practices are under investigation by regulators around the world. All iPhone models remain available for our customers in China. We will pursue all our legal options through the courts."

Apple has since addressed the patent issues in a software update that sources inside Apple not authorized to speak on behalf to the company told AppleInsider would remove all doubt that iOS 12 wasn't in violation of Qualcomm's patents.

As Boutrous explained in his most recent interview, "the patent that they're claiming in China isn't even something that they created [at Qualcomm], it's something they bought. And again, it has nothing to do with the legal hurdles that they face here in the United States."

If that sounds familiar, it's because Samsung pursued a similar strategy of defending itself against Apple's patent infringement cases seeking to stop it from "slavishly copying" iPhones by buying up unrelated patents and claiming that Apple had infringed them. Samsung was subsequently given equal time to present its invented infringement claims, even as Apple's actual patents were pared down to a bare minimum, supposedly because the courts had such limited resources to investigate.

Challenged by U.S., Qualcomm is deflecting attention to Apple

In its interview, Bloomberg took Qualcomm's legal claims seriously, asking Boutrous, "what happens at factories if Apple cannot sell most popular devices on the Chinese market?"

Boutrous answered, "I just don't think that's gonna even come close to happening. And again, Qualcomm is just exaggerating in a way that's really deceptive to the investing public. Their CEO has been saying there's a settlement on the horizon, which is just false.

"It's the kind of thing the SEC looks into when companies make these sorts of statements," added Boutrous. "That order isn't going to affect manufacturing, the contract manufacturers that I represent.

"But again, Qualcomm is just trying to take away from the fact that the United States government is taking them to trial on January 4, arguing and claiming that their business model, which is a monopolistic practice, excessive pricing, and abuse of the law must stop. So that's what they're trying to pull everyone's attention away from that's what this is all about."

Qualcomm's problems beyond Apple

Beyond losing Apple's massive modem business to Intel and perhaps facing direct completion with a new custom baseband developed by Apple internally, and also facing a loss of billions of dollars in royalty payments it had been collecting from Apple's contract manufacturers before Apple directed its partners to stop making the payments until its legal questions were resolved, Qualcomm also faces legal challenges from a series of regulatory agencies.

"This case has been talked about as 'Apple vs Qualcomm,'" Boutrous stated, "but it's really a lot more than that. It's my clients-- the builders of the devices-- it's the United States government and it's regulatory authorities around the world: China, Europe, Korea have all found this conduct to be illegal and imposed over $3.5 billion in fines.

"So Qualcomm needs to cease its illegal activity, to treat competitors fairly and to treat consumers fairly. Because the bottom line is its behavior is injuring consumers in the United States and around the world."

Bloomberg asked, "Qualcomm says they're settling with the FTC. If that happens, then what happens to Apple's case and the case of the contract manufacturers?"

"Well, they keep saying that they're settling," Boutrous answered. "That is news to me if that's happening. And in the trial scheduled for January 4, if they settle the FTC case, then they're going to face a trial in April against my clients, the contract manufacturers, where we're seeking about $9 billion in damages, which under US law would then be trebled, tripled, if we prevail.

Then there's a consumer class action that is scheduled to go to trial in June [] where the class is about 250 million consumers arguing that Qualcomm's behavior is injuring consumers by hurting innovation by raising prices in an unfair way.

"So whatever happens in the FTC action that's just that's hurdle one for Qualcomm and for its business model. They have two serious additional cases coming up."

Reaching a settlement is difficult for Qualcomm's existing business

Asked what would need to happen to resolve the disputes between Apple and Qualcomm, Boutrous stated, "what Qualcomm would have to do is cease its illegal practices.

"What happened is Qualcomm took a lead in early cellular technology, and it obtained a monopoly and then it used that monopoly power to basically tax innovation, to add a double price, something that no manufacturer or no company could ever get away with when they sell chips to product manufacturers. Qualcomm needs to stop that, it needs to compensate my clients, the contract manufacturers, for the injury and harm."

He separately noted, "when a company like Qualcomm goes to China and seeks in order that's clearly inappropriate and doing it in a way that is really meant to have an effect on U.S. proceedings, it's not good for trade, it's not good for consumers, it's not good for competition.

"They really need to stop that behavior and face the music as to their business model. And that will, I think, be good for everyone. And I think we need to have open trade, fair trade, fair markets. The kind of behavior that Qualcomm's engaging in, China already found that it was punishable, and imposed, I think, nearly a billion dollar fine in US dollars. So they need to stop acting in anti-competitive ways; that will be good for trade around the world."

Comments

  • Reply 1 of 18
    wood1208wood1208 Posts: 2,027member
    Obvious tactic on Qualcomm part!! All the time used in lawsuits.
    watto_cobra
  • Reply 2 of 18
    Remember, nothing is true until you swear to it in court, under oath and with the threat of perjury hanging over the truthfulness of the testimony.
  • Reply 3 of 18
    radarthekatradarthekat Posts: 3,150moderator
    “...facing three big lawsuits here in the United States that challenge their business model to the core."

    My heart feels good reading those words.  Lol
    magman1979jbdragonwatto_cobra
  • Reply 4 of 18
    Wow, Good information! I appreciate candor.
    Well written !!   
    magman1979watto_cobra
  • Reply 5 of 18
    melgrossmelgross Posts: 31,982member
    S Korea did settle with Qualcomm, I believe. They allowed Qualcomm to continue its present business practices, and dropped the fine to far lower levels than it would have been. In return, they require Qualcomm to invest fairly heavily in S Korea. A cop out, to be sure, but one Qualcomm can use elsewhere.
    edited December 2018 jbdragonwatto_cobra
  • Reply 6 of 18
    melgross said:
    S Korea did settle with Qualcomm, I believe. They allowed Qualcomm to continue its present business practices, and dropped the fine to far lower levels than it would have been. In return, they require Qualcomm to invest fairly heavily in S Korea. A cop out, to be sure, but one Qualcomm can use elsewhere.
    FYI 

    Samsung
     Electronics is currently manufacturing 50 percent of its mobile phones in Vietnam and only 8 percent in Korea. At present, Samsung Electronics is running six mobile phone manufacturing facilities in the six countries of Vietnam, China, India, Brazil, Indonesia, and Korea.
    Jan 28, 2015

    (In other words, phones aren’t made in s. korea anymore.  This was probably an attempt by Qualcomm to get others to settle.)
    edited December 2018 watto_cobra
  • Reply 7 of 18
    gatorguygatorguy Posts: 21,294member
    melgross said:
    S Korea did settle with Qualcomm, I believe. They allowed Qualcomm to continue its present business practices, and dropped the fine to far lower levels than it would have been. In return, they require Qualcomm to invest fairly heavily in S Korea. A cop out, to be sure, but one Qualcomm can use elsewhere.
    China did something along the same lines about 3 years ago, allowing the general licensing basis to continue but requiring them to roll back the rates a tad. Qualcomm now offers licenses to its 3G and 4G essential Chinese patents separately from other patents, which is something Apple and everyone else wants. and for phones sold in China QC calculates royalties based on 65 percent of the phone’s selling price rather than the entire price.

     BTW Mel I think you're describing the Taiwan settlement in case anyone is wanting to look at it. 
    edited December 2018 muthuk_vanalingam
  • Reply 8 of 18
    melgrossmelgross Posts: 31,982member
    melgross said:
    S Korea did settle with Qualcomm, I believe. They allowed Qualcomm to continue its present business practices, and dropped the fine to far lower levels than it would have been. In return, they require Qualcomm to invest fairly heavily in S Korea. A cop out, to be sure, but one Qualcomm can use elsewhere.
    FYI 

    Samsung
     Electronics is currently manufacturing 50 percent of its mobile phones in Vietnam and only 8 percent in Korea. At present, Samsung Electronics is running six mobile phone manufacturing facilities in the six countries of Vietnam, China, India, Brazil, Indonesia, and Korea.Jan 28, 2015

    (In other words, phones aren’t made in s. korea anymore.  This was probably an attempt by Qualcomm to get others to settle.)
    Who said that this has anything directly to do where the phones are assembled? It has to do with the selling, and buying of parts, such as modems. It also looks as though S Korea wants Qualcomm to open an R&D center.
    magman1979watto_cobra
  • Reply 9 of 18
    melgrossmelgross Posts: 31,982member

    gatorguy said:
    melgross said:
    S Korea did settle with Qualcomm, I believe. They allowed Qualcomm to continue its present business practices, and dropped the fine to far lower levels than it would have been. In return, they require Qualcomm to invest fairly heavily in S Korea. A cop out, to be sure, but one Qualcomm can use elsewhere.
    China did something along the same lines about 3 years ago, allowing the general licensing basis to continue but requiring them to roll back the rates a tad. Qualcomm now offers licenses to its 3G and 4G essential Chinese patents separately from other patents, which is something Apple and everyone else wants. and for phones sold in China QC calculates royalties based on 65 percent of the phone’s selling price rather than the entire price.

     BTW Mel I think you're describing the Taiwan settlement in case anyone is wanting to look at it. 
    Maybe. I was pretty sure it was S Korea though.

    the concept of patent exhaustion is pretty well recognized around the world, so it’s hard to understand how Qualcomm’s blackmail can be allowed anywhere. If Apple, or others, buy Qualcomm’s modems, they shouldn’t be paying any license fees. If Apple buys modems from another source, they shouldn’t be paying any license fees, because the OEM making the part should be paying that. SEP is supposed to be paid in FRAND. Period. Bundling SEP with non SEP isn’t allowed. The whole thing is nuts for it to have gotten this far.
    edited December 2018 ericthehalfbeejbdragonradarthekat
  • Reply 10 of 18
    gatorguygatorguy Posts: 21,294member
    melgross said:

    gatorguy said:
    melgross said:
    S Korea did settle with Qualcomm, I believe. They allowed Qualcomm to continue its present business practices, and dropped the fine to far lower levels than it would have been. In return, they require Qualcomm to invest fairly heavily in S Korea. A cop out, to be sure, but one Qualcomm can use elsewhere.
    China did something along the same lines about 3 years ago, allowing the general licensing basis to continue but requiring them to roll back the rates a tad. Qualcomm now offers licenses to its 3G and 4G essential Chinese patents separately from other patents, which is something Apple and everyone else wants. and for phones sold in China QC calculates royalties based on 65 percent of the phone’s selling price rather than the entire price.

     BTW Mel I think you're describing the Taiwan settlement in case anyone is wanting to look at it. 
    Maybe. I was pretty sure it was S Korea though.

    the concept of patent exhaustion is pretty well recognized around the world, so it’s hard to understand how Qualcomm’s blackmail can be allowed anywhere. If Apple, or others, buy Qualcomm’s modems, they shouldn’t be paying any license fees. If Apple buys modems from another source, they shouldn’t be paying any license fees, because the OEM making the part should be paying that. SEP is supposed to be paid in FRAND. Period. Bundling SEP with non SEP isn’t allowed. The whole thing is nuts for it to have gotten this far.
    What is F/RAND? There's not even an answer for what that really means, nor what it allows. Tough to get consensus on licensing and negotiation when even the most basic term doesn't have a world-wide standard legal definition. 

    ...and it was definitely Taiwan that extracted the investment promise in return for an easy and pain-free settlement.
    https://www.reuters.com/article/us-usa-qualcomm-taiwan/qualcomm-settles-anti-trust-case-with-taiwan-regulator-for-93-million-idUSKBN1KV07Z
    edited December 2018 muthuk_vanalingam
  • Reply 11 of 18
    melgrossmelgross Posts: 31,982member
    gatorguy said:
    melgross said:

    gatorguy said:
    melgross said:
    S Korea did settle with Qualcomm, I believe. They allowed Qualcomm to continue its present business practices, and dropped the fine to far lower levels than it would have been. In return, they require Qualcomm to invest fairly heavily in S Korea. A cop out, to be sure, but one Qualcomm can use elsewhere.
    China did something along the same lines about 3 years ago, allowing the general licensing basis to continue but requiring them to roll back the rates a tad. Qualcomm now offers licenses to its 3G and 4G essential Chinese patents separately from other patents, which is something Apple and everyone else wants. and for phones sold in China QC calculates royalties based on 65 percent of the phone’s selling price rather than the entire price.

     BTW Mel I think you're describing the Taiwan settlement in case anyone is wanting to look at it. 
    Maybe. I was pretty sure it was S Korea though.

    the concept of patent exhaustion is pretty well recognized around the world, so it’s hard to understand how Qualcomm’s blackmail can be allowed anywhere. If Apple, or others, buy Qualcomm’s modems, they shouldn’t be paying any license fees. If Apple buys modems from another source, they shouldn’t be paying any license fees, because the OEM making the part should be paying that. SEP is supposed to be paid in FRAND. Period. Bundling SEP with non SEP isn’t allowed. The whole thing is nuts for it to have gotten this far.
    What is F/RAND? There's not even an answer for what that really means, nor what it allows. Tough to get consensus on licensing and negotiation when even the most basic term doesn't have a world-wide standard legal definition. 

    ...and it was definitely Taiwan that extracted the investment promise in return for an easy and pain-free settlement.
    https://www.reuters.com/article/us-usa-qualcomm-taiwan/qualcomm-settles-anti-trust-case-with-taiwan-regulator-for-93-million-idUSKBN1KV07Z
    You know what FRAND means. It’s recognized everywhere. Why are you even saying that?

    ok, big deal, so it’s Taiwan. That’s not important.
    watto_cobra
  • Reply 12 of 18
    jbdragonjbdragon Posts: 2,189member
    gatorguy said:
    melgross said:

    gatorguy said:
    melgross said:
    S Korea did settle with Qualcomm, I believe. They allowed Qualcomm to continue its present business practices, and dropped the fine to far lower levels than it would have been. In return, they require Qualcomm to invest fairly heavily in S Korea. A cop out, to be sure, but one Qualcomm can use elsewhere.
    China did something along the same lines about 3 years ago, allowing the general licensing basis to continue but requiring them to roll back the rates a tad. Qualcomm now offers licenses to its 3G and 4G essential Chinese patents separately from other patents, which is something Apple and everyone else wants. and for phones sold in China QC calculates royalties based on 65 percent of the phone’s selling price rather than the entire price.

     BTW Mel I think you're describing the Taiwan settlement in case anyone is wanting to look at it. 
    Maybe. I was pretty sure it was S Korea though.

    the concept of patent exhaustion is pretty well recognized around the world, so it’s hard to understand how Qualcomm’s blackmail can be allowed anywhere. If Apple, or others, buy Qualcomm’s modems, they shouldn’t be paying any license fees. If Apple buys modems from another source, they shouldn’t be paying any license fees, because the OEM making the part should be paying that. SEP is supposed to be paid in FRAND. Period. Bundling SEP with non SEP isn’t allowed. The whole thing is nuts for it to have gotten this far.
    What is F/RAND? There's not even an answer for what that really means, nor what it allows. Tough to get consensus on licensing and negotiation when even the most basic term doesn't have a world-wide standard legal definition. 

    ...and it was definitely Taiwan that extracted the investment promise in return for an easy and pain-free settlement.
    https://www.reuters.com/article/us-usa-qualcomm-taiwan/qualcomm-settles-anti-trust-case-with-taiwan-regulator-for-93-million-idUSKBN1KV07Z


    Quote "SSOs created FRAND — a requirement that SSO members license SEPs on “Fair, Reasonable, and Non-Discriminatory” terms to other members of the SSO and, very often, non-members who use the standard. (FRAND is sometimes referred to as RAND or even F/RAND, but they are all similar.) The FRAND requirement facilitates widespread use of the standard and insures that each SEP owner benefits from use of the patent without gaining an unfair bargaining advantage."

    https://cardozo.yu.edu/what-“frand”-all-about-licensing-patents-essential-accepted-standard
    edited December 2018
  • Reply 13 of 18
    gatorguygatorguy Posts: 21,294member
    melgross said:
    gatorguy said:
    melgross said:

    gatorguy said:
    melgross said:
    S Korea did settle with Qualcomm, I believe. They allowed Qualcomm to continue its present business practices, and dropped the fine to far lower levels than it would have been. In return, they require Qualcomm to invest fairly heavily in S Korea. A cop out, to be sure, but one Qualcomm can use elsewhere.
    China did something along the same lines about 3 years ago, allowing the general licensing basis to continue but requiring them to roll back the rates a tad. Qualcomm now offers licenses to its 3G and 4G essential Chinese patents separately from other patents, which is something Apple and everyone else wants. and for phones sold in China QC calculates royalties based on 65 percent of the phone’s selling price rather than the entire price.

     BTW Mel I think you're describing the Taiwan settlement in case anyone is wanting to look at it. 
    Maybe. I was pretty sure it was S Korea though.

    the concept of patent exhaustion is pretty well recognized around the world, so it’s hard to understand how Qualcomm’s blackmail can be allowed anywhere. If Apple, or others, buy Qualcomm’s modems, they shouldn’t be paying any license fees. If Apple buys modems from another source, they shouldn’t be paying any license fees, because the OEM making the part should be paying that. SEP is supposed to be paid in FRAND. Period. Bundling SEP with non SEP isn’t allowed. The whole thing is nuts for it to have gotten this far.
    What is F/RAND? There's not even an answer for what that really means, nor what it allows. Tough to get consensus on licensing and negotiation when even the most basic term doesn't have a world-wide standard legal definition. 

    ...and it was definitely Taiwan that extracted the investment promise in return for an easy and pain-free settlement.
    https://www.reuters.com/article/us-usa-qualcomm-taiwan/qualcomm-settles-anti-trust-case-with-taiwan-regulator-for-93-million-idUSKBN1KV07Z
    You know what FRAND means. It’s recognized everywhere. Why are you even saying that?



    ok, big deal, so it’s Taiwan. That’s not important.
    What does it mean legally Mel?
    FAIR to who, the licensee, the patent holder, both? Who determines FAIR?

    Where's the chart that plainly displays what's REASONABLE. Who is in charge of spelling it out, the patent holders or the standards organization or some other authority? Does it mean a REASONABLE return on investment in the case of a patent holder, and could that vary depending on the patents? Is REASONABLE a couple of dollars? Less? More? Is a per-device rate REASONABLE? If the licensee and licensor disagree on REASONABLE where's the definition they can look to for guidance? 

    Non-Discriminatory. Does that mean only flat rate royalties where everyone pays the exact same fee are permissible and those based on device costs are illegal? Can SEP-holders negotiate with licensees or must all of them have the same contract terms and the same payments schedules? Can volume discounts be offered? 

    No Mel, there is no broad agreement on what is permissible under F/RAND licensing. One court may decide a particular term or requirement isn't acceptable while another finds just the opposite under a similar scenario. Some particular judge may find in favor of a licensee while the next court disagrees. There's not even agreement on whether an injunction is a proper remedy for dealing with an unwilling licensee. One court says no. Another says yes. Even the DoJ is now adjusting direction on it. 
    muthuk_vanalingam
  • Reply 14 of 18
    gatorguygatorguy Posts: 21,294member
    jbdragon said:
    gatorguy said:
    melgross said:

    gatorguy said:
    melgross said:
    S Korea did settle with Qualcomm, I believe. They allowed Qualcomm to continue its present business practices, and dropped the fine to far lower levels than it would have been. In return, they require Qualcomm to invest fairly heavily in S Korea. A cop out, to be sure, but one Qualcomm can use elsewhere.
    China did something along the same lines about 3 years ago, allowing the general licensing basis to continue but requiring them to roll back the rates a tad. Qualcomm now offers licenses to its 3G and 4G essential Chinese patents separately from other patents, which is something Apple and everyone else wants. and for phones sold in China QC calculates royalties based on 65 percent of the phone’s selling price rather than the entire price.

     BTW Mel I think you're describing the Taiwan settlement in case anyone is wanting to look at it. 
    Maybe. I was pretty sure it was S Korea though.

    the concept of patent exhaustion is pretty well recognized around the world, so it’s hard to understand how Qualcomm’s blackmail can be allowed anywhere. If Apple, or others, buy Qualcomm’s modems, they shouldn’t be paying any license fees. If Apple buys modems from another source, they shouldn’t be paying any license fees, because the OEM making the part should be paying that. SEP is supposed to be paid in FRAND. Period. Bundling SEP with non SEP isn’t allowed. The whole thing is nuts for it to have gotten this far.
    What is F/RAND? There's not even an answer for what that really means, nor what it allows. Tough to get consensus on licensing and negotiation when even the most basic term doesn't have a world-wide standard legal definition. 

    ...and it was definitely Taiwan that extracted the investment promise in return for an easy and pain-free settlement.
    https://www.reuters.com/article/us-usa-qualcomm-taiwan/qualcomm-settles-anti-trust-case-with-taiwan-regulator-for-93-million-idUSKBN1KV07Z


    Quote "SSOs created FRAND — a requirement that SSO members license SEPs on “Fair, Reasonable, and Non-Discriminatory” terms to other members of the SSO and, very often, non-members who use the standard. (FRAND is sometimes referred to as RAND or even F/RAND, but they are all similar.) The FRAND requirement facilitates widespread use of the standard and insures that each SEP owner benefits from use of the patent without gaining an unfair bargaining advantage."

    https://cardozo.yu.edu/what-“frand”-all-about-licensing-patents-essential-accepted-standard
    Sure there's words. What does it mean legally?
       -If you negotiate an SEP license with licensee A and then negotiate different terms with licensee B can it be F/RAND or is it discriminatory and not permissible?
    -Can a royalty based on device price be F/RAND or is it not permissible?
       -Can additionally requiring a license to non-essential IP be F/RAND or is it not permissible?
    -What about seeking an injunction on an licensee considered unwilling to negotiate. F/RAND compatible or not permissible?
       -Can an SEP licensor be required to negotiate with each entity seeking a license or can they offer flat terms, take it or leave it (non-discriminating). F/RAND?
    -Is having different licenses for different regions F/RAND compatible?
       -Is NOT offering a license based on the region/country but insisting it be worldwide F/RAND compatible?
    -If a national court in in one country says some particular contract term is legal or illegal does it apply worldwide? Should it?
       -Does the appropriate standards group decide what is F/RAND and what is not or does "someone else"? 
    -Is it FAIR under F/RAND to change the rules after a licensor has agreed to contribute IP to a standard in trade for a REASONABLE return on investment? 
       - Who is in charge of defining what's REASONABLE and FAIR and what is not. A licensee? The patent owner? The standards body? A judge?

    If a judge and trial is required each time there's a disagreement over whether specific royalties and contract terms are F/RAND or not F/RAND isn't that proof there's no broad worldwide understanding on what it is and what is permissible under it? There's not even agreement between regions about what F/RAND allows and where much less agreement between licensees and licensors, whether a ruling in one country applies to another, or even complete agreement about when and how rulings should be applied in different cases or even applied at all.  

    So mouthing the words for an acronym and defining what if really means are different things. We know the words, just can't agree on the meaning. 
    edited December 2018 muthuk_vanalingam
  • Reply 15 of 18
    melgrossmelgross Posts: 31,982member
    gatorguy said:
    melgross said:
    gatorguy said:
    melgross said:

    gatorguy said:
    melgross said:
    S Korea did settle with Qualcomm, I believe. They allowed Qualcomm to continue its present business practices, and dropped the fine to far lower levels than it would have been. In return, they require Qualcomm to invest fairly heavily in S Korea. A cop out, to be sure, but one Qualcomm can use elsewhere.
    China did something along the same lines about 3 years ago, allowing the general licensing basis to continue but requiring them to roll back the rates a tad. Qualcomm now offers licenses to its 3G and 4G essential Chinese patents separately from other patents, which is something Apple and everyone else wants. and for phones sold in China QC calculates royalties based on 65 percent of the phone’s selling price rather than the entire price.

     BTW Mel I think you're describing the Taiwan settlement in case anyone is wanting to look at it. 
    Maybe. I was pretty sure it was S Korea though.

    the concept of patent exhaustion is pretty well recognized around the world, so it’s hard to understand how Qualcomm’s blackmail can be allowed anywhere. If Apple, or others, buy Qualcomm’s modems, they shouldn’t be paying any license fees. If Apple buys modems from another source, they shouldn’t be paying any license fees, because the OEM making the part should be paying that. SEP is supposed to be paid in FRAND. Period. Bundling SEP with non SEP isn’t allowed. The whole thing is nuts for it to have gotten this far.
    What is F/RAND? There's not even an answer for what that really means, nor what it allows. Tough to get consensus on licensing and negotiation when even the most basic term doesn't have a world-wide standard legal definition. 

    ...and it was definitely Taiwan that extracted the investment promise in return for an easy and pain-free settlement.
    https://www.reuters.com/article/us-usa-qualcomm-taiwan/qualcomm-settles-anti-trust-case-with-taiwan-regulator-for-93-million-idUSKBN1KV07Z
    You know what FRAND means. It’s recognized everywhere. Why are you even saying that?



    ok, big deal, so it’s Taiwan. That’s not important.
    What does it mean legally Mel?
    FAIR to who, the licensee, the patent holder, both? Who determines FAIR?

    Where's the chart that plainly displays what's REASONABLE. Who is in charge of spelling it out, the patent holders or the standards organization or some other authority? Does it mean a REASONABLE return on investment in the case of a patent holder, and could that vary depending on the patents? Is REASONABLE a couple of dollars? Less? More? Is a per-device rate REASONABLE? If the licensee and licensor disagree on REASONABLE where's the definition they can look to for guidance? 

    Non-Discriminatory. Does that mean only flat rate royalties where everyone pays the exact same fee are permissible and those based on device costs are illegal? Can SEP-holders negotiate with licensees or must all of them have the same contract terms and the same payments schedules? Can volume discounts be offered? 

    No Mel, there is no broad agreement on what is permissible under F/RAND licensing. One court may decide a particular term or requirement isn't acceptable while another finds just the opposite under a similar scenario. Some particular judge may find in favor of a licensee while the next court disagrees. There's not even agreement on whether an injunction is a proper remedy for dealing with an unwilling licensee. One court says no. Another says yes. Even the DoJ is now adjusting direction on it. 
    This is just another nonsense argument from you. SEP and FRAND are well known, and well agreed upon. Don’t start something you obviously don’t understand, or want to minimize the importance of.
  • Reply 16 of 18
    gatorguygatorguy Posts: 21,294member
    melgross said:
    gatorguy said:
    melgross said:
    gatorguy said:
    melgross said:

    gatorguy said:
    melgross said:
    S Korea did settle with Qualcomm, I believe. They allowed Qualcomm to continue its present business practices, and dropped the fine to far lower levels than it would have been. In return, they require Qualcomm to invest fairly heavily in S Korea. A cop out, to be sure, but one Qualcomm can use elsewhere.
    China did something along the same lines about 3 years ago, allowing the general licensing basis to continue but requiring them to roll back the rates a tad. Qualcomm now offers licenses to its 3G and 4G essential Chinese patents separately from other patents, which is something Apple and everyone else wants. and for phones sold in China QC calculates royalties based on 65 percent of the phone’s selling price rather than the entire price.

     BTW Mel I think you're describing the Taiwan settlement in case anyone is wanting to look at it. 
    Maybe. I was pretty sure it was S Korea though.

    the concept of patent exhaustion is pretty well recognized around the world, so it’s hard to understand how Qualcomm’s blackmail can be allowed anywhere. If Apple, or others, buy Qualcomm’s modems, they shouldn’t be paying any license fees. If Apple buys modems from another source, they shouldn’t be paying any license fees, because the OEM making the part should be paying that. SEP is supposed to be paid in FRAND. Period. Bundling SEP with non SEP isn’t allowed. The whole thing is nuts for it to have gotten this far.
    What is F/RAND? There's not even an answer for what that really means, nor what it allows. Tough to get consensus on licensing and negotiation when even the most basic term doesn't have a world-wide standard legal definition. 

    ...and it was definitely Taiwan that extracted the investment promise in return for an easy and pain-free settlement.
    https://www.reuters.com/article/us-usa-qualcomm-taiwan/qualcomm-settles-anti-trust-case-with-taiwan-regulator-for-93-million-idUSKBN1KV07Z
    You know what FRAND means. It’s recognized everywhere. Why are you even saying that?



    ok, big deal, so it’s Taiwan. That’s not important.
    What does it mean legally Mel?
    FAIR to who, the licensee, the patent holder, both? Who determines FAIR?

    Where's the chart that plainly displays what's REASONABLE. Who is in charge of spelling it out, the patent holders or the standards organization or some other authority? Does it mean a REASONABLE return on investment in the case of a patent holder, and could that vary depending on the patents? Is REASONABLE a couple of dollars? Less? More? Is a per-device rate REASONABLE? If the licensee and licensor disagree on REASONABLE where's the definition they can look to for guidance? 

    Non-Discriminatory. Does that mean only flat rate royalties where everyone pays the exact same fee are permissible and those based on device costs are illegal? Can SEP-holders negotiate with licensees or must all of them have the same contract terms and the same payments schedules? Can volume discounts be offered? 

    No Mel, there is no broad agreement on what is permissible under F/RAND licensing. One court may decide a particular term or requirement isn't acceptable while another finds just the opposite under a similar scenario. Some particular judge may find in favor of a licensee while the next court disagrees. There's not even agreement on whether an injunction is a proper remedy for dealing with an unwilling licensee. One court says no. Another says yes. Even the DoJ is now adjusting direction on it. 
    This is just another nonsense argument from you. SEP and FRAND are well known, and well agreed upon. Don’t start something you obviously don’t understand...
    -How much in royalties is permitted under this F/RAND you understand so well before it becomes "unreasonable"?
    -Who is tasked with crafting a FAIR standards and royalty offer? 
    -Can an SEP holder demand royalties based on a percentage of device price or only a flat rate that applies to all?
    -Is it "discrimination" if negotiations allow some licensee to get a better deal than another? Are negotiations actually a requirement or is everyone supposed to get the exact same deal to avoid "Discrimination"?  
    -Where is the bright line defining what contract terms and royalties are F/RAND and which are not, and where are these "well-known and well-agreed on" rules you speak of so we can all look at them?
    -Is FRAND governed by contract law or patent law?

     If you can't answer those simple questions then it's you who doesn't understand Mel.

     If the understanding of FRAND and not-FRAND contract terms and conditions was so "well-known and well-agreed on" as you want to argue (for argument's sake only IMO) we wouldn't have lawsuits spread across several countries and continents and years where disagreements and questions about it are being debated in courtrooms, and judges often issuing conflicting rulings in them. Even our own DoJ can't seem to agree on the rules governing FRAND negotiations and cures.

    So no the definition of FRAND is one in flux with no concise and broad agreement on what it means and what it allows. 

    EDIT:
    For your reading pleasure
    https://www.law.berkeley.edu/files/Belgum_Karl__IPSC_paper_2014.pdf
    and this appeals court ruling which might have worldwide implications, and in some ways favoring the SEP holders position.
    https://hsfnotes.com/ip/2018/10/25/the-court-of-appeal-makes-friends-with-sep-holders/
    edited December 2018
  • Reply 17 of 18
    melgrossmelgross Posts: 31,982member
    gatorguy said:
    melgross said:
    gatorguy said:
    melgross said:
    gatorguy said:
    melgross said:

    gatorguy said:
    melgross said:
    S Korea did settle with Qualcomm, I believe. They allowed Qualcomm to continue its present business practices, and dropped the fine to far lower levels than it would have been. In return, they require Qualcomm to invest fairly heavily in S Korea. A cop out, to be sure, but one Qualcomm can use elsewhere.
    China did something along the same lines about 3 years ago, allowing the general licensing basis to continue but requiring them to roll back the rates a tad. Qualcomm now offers licenses to its 3G and 4G essential Chinese patents separately from other patents, which is something Apple and everyone else wants. and for phones sold in China QC calculates royalties based on 65 percent of the phone’s selling price rather than the entire price.

     BTW Mel I think you're describing the Taiwan settlement in case anyone is wanting to look at it. 
    Maybe. I was pretty sure it was S Korea though.

    the concept of patent exhaustion is pretty well recognized around the world, so it’s hard to understand how Qualcomm’s blackmail can be allowed anywhere. If Apple, or others, buy Qualcomm’s modems, they shouldn’t be paying any license fees. If Apple buys modems from another source, they shouldn’t be paying any license fees, because the OEM making the part should be paying that. SEP is supposed to be paid in FRAND. Period. Bundling SEP with non SEP isn’t allowed. The whole thing is nuts for it to have gotten this far.
    What is F/RAND? There's not even an answer for what that really means, nor what it allows. Tough to get consensus on licensing and negotiation when even the most basic term doesn't have a world-wide standard legal definition. 

    ...and it was definitely Taiwan that extracted the investment promise in return for an easy and pain-free settlement.
    https://www.reuters.com/article/us-usa-qualcomm-taiwan/qualcomm-settles-anti-trust-case-with-taiwan-regulator-for-93-million-idUSKBN1KV07Z
    You know what FRAND means. It’s recognized everywhere. Why are you even saying that?



    ok, big deal, so it’s Taiwan. That’s not important.
    What does it mean legally Mel?
    FAIR to who, the licensee, the patent holder, both? Who determines FAIR?

    Where's the chart that plainly displays what's REASONABLE. Who is in charge of spelling it out, the patent holders or the standards organization or some other authority? Does it mean a REASONABLE return on investment in the case of a patent holder, and could that vary depending on the patents? Is REASONABLE a couple of dollars? Less? More? Is a per-device rate REASONABLE? If the licensee and licensor disagree on REASONABLE where's the definition they can look to for guidance? 

    Non-Discriminatory. Does that mean only flat rate royalties where everyone pays the exact same fee are permissible and those based on device costs are illegal? Can SEP-holders negotiate with licensees or must all of them have the same contract terms and the same payments schedules? Can volume discounts be offered? 

    No Mel, there is no broad agreement on what is permissible under F/RAND licensing. One court may decide a particular term or requirement isn't acceptable while another finds just the opposite under a similar scenario. Some particular judge may find in favor of a licensee while the next court disagrees. There's not even agreement on whether an injunction is a proper remedy for dealing with an unwilling licensee. One court says no. Another says yes. Even the DoJ is now adjusting direction on it. 
    This is just another nonsense argument from you. SEP and FRAND are well known, and well agreed upon. Don’t start something you obviously don’t understand...
    -How much in royalties is permitted under this F/RAND you understand so well before it becomes "unreasonable"?
    -Who is tasked with crafting a FAIR standards and royalty offer? 
    -Can an SEP holder demand royalties based on a percentage of device price or only a flat rate that applies to all?
    -Is it "discrimination" if negotiations allow some licensee to get a better deal than another? Are negotiations actually a requirement or is everyone supposed to get the exact same deal to avoid "Discrimination"?  
    -Where is the bright line defining what contract terms and royalties are F/RAND and which are not, and where are these "well-known and well-agreed on" rules you speak of so we can all look at them?
    -Is FRAND governed by contract law or patent law?

     If you can't answer those simple questions then it's you who doesn't understand Mel.

     If the understanding of FRAND and not-FRAND contract terms and conditions was so "well-known and well-agreed on" as you want to argue (for argument's sake only IMO) we wouldn't have lawsuits spread across several countries and continents and years where disagreements and questions about it are being debated in courtrooms, and judges often issuing conflicting rulings in them. Even our own DoJ can't seem to agree on the rules governing FRAND negotiations and cures.

    So no the definition of FRAND is one in flux with no concise and broad agreement on what it means and what it allows. 

    EDIT:
    For your reading pleasure
    https://www.law.berkeley.edu/files/Belgum_Karl__IPSC_paper_2014.pdf
    and this appeals court ruling which might have worldwide implications, and in some ways favoring the SEP holders position.
    https://hsfnotes.com/ip/2018/10/25/the-court-of-appeal-makes-friends-with-sep-holders/
    You’re just making this argument up from nothing. I’m not going to answer each of those nonsense questions. Look it up for yourself. This is really pretty well understood, even if you’re trying to protect another non Apple entity, as you usually do.
  • Reply 18 of 18
    gatorguygatorguy Posts: 21,294member
    melgross said:
    gatorguy said:
    melgross said:
    gatorguy said:
    melgross said:
    gatorguy said:
    melgross said:

    gatorguy said:
    melgross said:
    S Korea did settle with Qualcomm, I believe. They allowed Qualcomm to continue its present business practices, and dropped the fine to far lower levels than it would have been. In return, they require Qualcomm to invest fairly heavily in S Korea. A cop out, to be sure, but one Qualcomm can use elsewhere.
    China did something along the same lines about 3 years ago, allowing the general licensing basis to continue but requiring them to roll back the rates a tad. Qualcomm now offers licenses to its 3G and 4G essential Chinese patents separately from other patents, which is something Apple and everyone else wants. and for phones sold in China QC calculates royalties based on 65 percent of the phone’s selling price rather than the entire price.

     BTW Mel I think you're describing the Taiwan settlement in case anyone is wanting to look at it. 
    Maybe. I was pretty sure it was S Korea though.

    the concept of patent exhaustion is pretty well recognized around the world, so it’s hard to understand how Qualcomm’s blackmail can be allowed anywhere. If Apple, or others, buy Qualcomm’s modems, they shouldn’t be paying any license fees. If Apple buys modems from another source, they shouldn’t be paying any license fees, because the OEM making the part should be paying that. SEP is supposed to be paid in FRAND. Period. Bundling SEP with non SEP isn’t allowed. The whole thing is nuts for it to have gotten this far.
    What is F/RAND? There's not even an answer for what that really means, nor what it allows. Tough to get consensus on licensing and negotiation when even the most basic term doesn't have a world-wide standard legal definition. 

    ...and it was definitely Taiwan that extracted the investment promise in return for an easy and pain-free settlement.
    https://www.reuters.com/article/us-usa-qualcomm-taiwan/qualcomm-settles-anti-trust-case-with-taiwan-regulator-for-93-million-idUSKBN1KV07Z
    You know what FRAND means. It’s recognized everywhere. Why are you even saying that?



    ok, big deal, so it’s Taiwan. That’s not important.
    What does it mean legally Mel?
    FAIR to who, the licensee, the patent holder, both? Who determines FAIR?

    Where's the chart that plainly displays what's REASONABLE. Who is in charge of spelling it out, the patent holders or the standards organization or some other authority? Does it mean a REASONABLE return on investment in the case of a patent holder, and could that vary depending on the patents? Is REASONABLE a couple of dollars? Less? More? Is a per-device rate REASONABLE? If the licensee and licensor disagree on REASONABLE where's the definition they can look to for guidance? 

    Non-Discriminatory. Does that mean only flat rate royalties where everyone pays the exact same fee are permissible and those based on device costs are illegal? Can SEP-holders negotiate with licensees or must all of them have the same contract terms and the same payments schedules? Can volume discounts be offered? 

    No Mel, there is no broad agreement on what is permissible under F/RAND licensing. One court may decide a particular term or requirement isn't acceptable while another finds just the opposite under a similar scenario. Some particular judge may find in favor of a licensee while the next court disagrees. There's not even agreement on whether an injunction is a proper remedy for dealing with an unwilling licensee. One court says no. Another says yes. Even the DoJ is now adjusting direction on it. 
    This is just another nonsense argument from you. SEP and FRAND are well known, and well agreed upon. Don’t start something you obviously don’t understand...
    -How much in royalties is permitted under this F/RAND you understand so well before it becomes "unreasonable"?
    -Who is tasked with crafting a FAIR standards and royalty offer? 
    -Can an SEP holder demand royalties based on a percentage of device price or only a flat rate that applies to all?
    -Is it "discrimination" if negotiations allow some licensee to get a better deal than another? Are negotiations actually a requirement or is everyone supposed to get the exact same deal to avoid "Discrimination"?  
    -Where is the bright line defining what contract terms and royalties are F/RAND and which are not, and where are these "well-known and well-agreed on" rules you speak of so we can all look at them?
    -Is FRAND governed by contract law or patent law?

     If you can't answer those simple questions then it's you who doesn't understand Mel.

     If the understanding of FRAND and not-FRAND contract terms and conditions was so "well-known and well-agreed on" as you want to argue (for argument's sake only IMO) we wouldn't have lawsuits spread across several countries and continents and years where disagreements and questions about it are being debated in courtrooms, and judges often issuing conflicting rulings in them. Even our own DoJ can't seem to agree on the rules governing FRAND negotiations and cures.

    So no the definition of FRAND is one in flux with no concise and broad agreement on what it means and what it allows. 

    EDIT:
    For your reading pleasure
    https://www.law.berkeley.edu/files/Belgum_Karl__IPSC_paper_2014.pdf
    and this appeals court ruling which might have worldwide implications, and in some ways favoring the SEP holders position.
    https://hsfnotes.com/ip/2018/10/25/the-court-of-appeal-makes-friends-with-sep-holders/
    You’re just making this argument up from nothing. I’m not going to answer each of those nonsense questions. Look it up for yourself. This is really pretty well understood, even if you’re trying to protect another non Apple entity, as you usually do.
    Whatever Mel. It's pretty obvious which of us has a better understanding of it, and for what it's worth I have looked each of those up and know the current answers.

    This is an easy way to disprove "it (F/RAND) is really pretty well understood" as you keep saying it is. Let's use the fairly recently concluded Ericsson v.TCL SEP licensing trial and quote Judge Selna:

    The inconclusive history of ETSI's development of FRAND presents the Court with difficulties in applying the concept. ETSI's IPR Special Committee has explained that "[t]he absence of an agreement on a more detailed definition of FRAND or on compensation elements under the FRAND commitment does not imply their inexistence... "The lack of consensus within ETSI about further defining the FRAND obligation has left the resolution of FRAND-related disputes to the national courts."

    Not even the very basic very basic legal definition of the "ND" in Reasonable and Non-Discriminating is clear. Again quoting Judge Selna:
    "NO American cases have definitively addressed the non-discrimination requirement" (emphasis mine)

    So no, FRAND obligations and compensation rights are NOT well understood and that comes directly from the United States Federal Courts, not something I've "made up from nothing"
    edited December 2018
Sign In or Register to comment.