#22: Samsung Reduces 2.4% Royalty Demand for SEPs

The USITC postponed its decision on Samsung’s complaint against Apple until May due to raised issues regarding FRAND licensing obligations and an excision order. There is now an interesting development that has come about in the Apple-Samsung dispute: in December 2012, “Samsung abandoned the 2.4% royalty demand for its wireless standard-essential patents (SEPs) it had been adamant about for well over a year.”
This issue arose in the Netherlands in 2011 when a Dutch court denied Samsung’s injunction request as its 2.4% royalty demand was considered to be outside the FRAND terms. In December, however, Samsung decided to withdrawal all of its European SEP-based injunction requests. The filing does not specify what the new demand is or weather that complies with the FRAND terms.


Samsung behaved similarly with Ericsson. It reduced its demands on Apple a week after it reduced its royalty demands with Ericsson. Samsung realized that its tactics were not working and had to shift gears. However, it still has to defend itself against Apple and Ericsson’s claims as well as the European Commission and countersuing. Apparently, the European Commission is still investigating Samsung to determine if it violated the European antitrust law in use of declared-essential patents against Apple.

Apple wants FRAND rates to be set in a district court and highlighted Samsungs track record of overdeclaring patents (where Samsung said certain patents were essential to standards when they were not) twice as much as the average industry rate. Apple has used Samsungs statements against them. Samsung and Nokia and others agreed licensing cost of a wireless standard should not exceed 5-7%, and Samsung would then get a fraction of this. There is still one SEP that remains on the table but apparently is quite trivial as far as functionality goes and accounts for less than 0.01% of the code in the accused device. In addition, this small amount is a relatively unimportant portion of the UMTS standard. All in all, there should be a standardized license so everyone pays the same amount, claims Dr. Nils Rydbeck, former Chief Technical Officer at Ericsson.

Just as Samsung, Google’s Motorola Mobility might agree to a 100-125 million annual royalty cap after Microsoft had dealt with years of 2.25% royalty for its Motorola patent use. SEP licensing is not something companies are able to hold over others heads any longer.  

Video #21: Samsung vs. Apple: Import Ban

#21: The Other Side of The Silicon Valley

I just read an interesting article in TechCrunch this week about the other side of the Silicon Valley. Because I was pretty unaware of this issue I thought others may be interested. While we discuss patents and the big companies I think it is important to look at how influential the decisions of huge tech firms are.

http://vimeo.com/63373007

Veteran Journalist Bill Moyers has fueled a new conversation about the Silicon Valley in his segment called, "Homeless in High Tech's Shadow." "It is a very interesting look at the growing homeless problem in the South Bay of San Francisco that's happening in stark contrast to the growing wealth in the same area."
Instead of looking at the Google cafeteria that provides its employees with gourmet food, the segment features a former worker in that same cafeteria who was laid off as the company tightened its hiring policies and now lives in a tent. It takes a new look at the wealth disparity that has developed in the Valley. 

“Food stamp participation just hit a 10-year high, homelessness rose 20 percent in two years, and the average income for Hispanics, who make up one in four Silicon Valley residents, fell to a new low of about $19,000 a year— capping a steady 14 percent drop over the past five years”

Moyer aruges that offshore tech manufactuing has played a large part in this trend. It is a hard and complicated situation that has resulted from various factors and it is not easy to get a comprehensive picture of everything in this six minute video. However, I think it is an interesting trend that is quite important as it depicts how the decisions of these corporations shape our society in more ways that just the products we consume. 

Video #20: Envrionmental Issues

Video #19: Apple vs. Samsung Contunied Rulings and Issues

#20: Judge Oversite Resolved

Last week, Administrative Law Judge Thomas Pender made a preliminary ruling on remand issues concerning Apple’s complaint against Samsung. That ruling is available on the ITC’s document system. Now a Commission review will be held.
The remand was an opportunity for Apple to broaden its preliminary win with respect to two patents. The review that will commence shortly is an opportunity for Samsung to narrow or overturn Apples win. One of Apples two patents were broadened.
U.S. Patent No. RE41,922 on a "method and apparatus for providing translucent images on a computer display" already infringes by Samsungs Android devices, especially in the text selection feature on the Android browser app and the translucent buttons of the android photo gallery. Judge Pender cleared Sumsung’s “designaround products.” Apparently, Judge Pender may not have had jurisdiction over the designaround products, which Apple is claiming.


Apple is asserting multiple claims of the RE'922 patent in this investigation. The initial determination identified infringements of claims 29, 30, and 33-35, and deemed all these claims valid. All of these claims are method claims, which (as Google is just experiencing in its attempt to get Microsoft's Xbox gaming console banned) (I wrote about this in a previous post http://patentengineering190g.blogspot.com/2013/03/google-vs-microsoft.html) can only give rise to an ITC exclusion order (i.e., U.S. import ban) if the act of importation itself constitutes a patent infringement (as opposed to post-importation use per se). In this case, the fact that Samsung provides manuals that tell users how to use the accused features means Samsung is liable for induced infringement, and with this finding of inducement, the act of importation also constitutes a violation of the statute governing the ITC's intellectual property enforcement (Section 337).

In the original determination Judge Pender made a slight oversight when he found that claim 33 did not infringe as he later decided that the text selection feature did in fact infringe claim 33. The remand gave him the opportunity to make this correction and then easily apply that judgment to claims 34 and 35 because those claims derived from claim 33.

·             Claim 34 adds to claim 33 the limitation that the base image (the one that's overlapped by a translucent image) must be active to receive user inputs. The initial determination had already established the fact that this requirement is met in connection with claim 29.

·         Claim 35 additionally requires the electronic device to be a "handheld device", which is obviously the case in this investigation of Samsung smartphones and tablet computers.

#19: Sansung and Apple: At it again...

Disputes between Samsung and Apple continue this week as a ruling is due on May 31^st regarding Apples infringement on U.S. Patent No. 7,706,348. This issue has to do with the scope of the import ban, should one be ordered. Here is a link to read more about the specific patent http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2=HITOFF&d=PALL&p=1&u=%2Fnetahtml%2FPTO%2Fsrchnum.htm&r=1&f=G&l=50&s1=7,706,348.PN.&OS=PN/7,706,348&RS=PN/7,706,348. 348 is described as an “apparatus and method for encoding/decoding transport format combination indicator in CDMA mobile communication system.” The main issue is outlined in the statement below. 

"4. With respect to the '348 patent, Samsung’s infringement case before the Commission relied upon accused third and fourth generation Apple products that operate on the AT&T wireless network. If the Commission were to issue remedial orders covering articles covered by the asserted claims of the ’348 patent, would such an order cover (a) Apple products that operate on other wireless networks in the United States, and (b) later generation Apple products (e.g., iPhone 5, later iPad versions)?"

Basically, in the proceedings before the ALJ Samsung accused only older Apple products of infringement of the '348 patent: the AT&T models of the iPhone 4 (but not the 4S or 5), 3GS and 3, and of the iPad 3G and iPad 2 3G. Apple did not believe that Samsung could enforce and exclusion order against newer Apple products because of technical reasons. The Office of Unfair Import Investigations (“ITC” staff) acknowledged that there is no evidence in the record concerning other networks or newer Apple products. If any exclusion order were to be issued the ITC staff agreed it should include a certification provision to help enforce the ban.  The U.S. Bureau of Customs and Border Protection would have to decide on a case-by-case basis whether future products could be in the scope of this infringement through a certifications process or scope ruling.

Now Samsung is taking the dispute to another level as the company is taking the position that that not only the AT&T versions of the accused iPhones and iPads but versions sold by other carriers infringe and should fall within the scope of this import ban.

"At the time the complaint was filed, Apple's iPhones and iPads with UMTS connectivity were only available through AT&T. Since then, Apple has expanded its sales to other UMTS carriers. Because all iPhone 4 (UMTS version) and iPad 2 (UMTS version) devices infringe the asserted claims of the '348 patent, regardless of carrier customer, they would be subject to the Commission's remedial orders. However, AT&T remains the largest UMTS iPhone 4 carrier by volume. [...].

Based on Samsung's understanding, the current configurations of the iPhone 4 (CDMA version), iPhone 4S, iPhone 5, iPad 2 (CDMA version), iPad (third and fourth generations) and iPad mini contain [REDACTED]. Accordingly, unless these devices are altered to incorporate [REDACTED], they would not be subject to an exclusion order or cease and desist order. Similarly, future devices incorporating [REDACTED] would not be subject to an exclusion order or cease and desist order."

If there is a ban on older iPhones and iPads, Apple will only be affected at the low end and the repair business. They could delay before the ban takes place and solve the majority of the problem. Is it likely that the ITC will ban any Apple products? Especially as Samsung failed to comply with its FRAND licensing obligations? And if it does happen would the impact even be very significant?