DoJ Investigating Samsung For Patent Abuse

sl4shd0rk writes "Good news for Apple, bad news for Samsung. Yesterday, Apple filed legal papers with the International Trade Commission citing a Department of Justice investigation into whether Samsung is misusing its 'Standards essential' patents in ways which violate antitrust law. Apple claims Samsung has violated commitments to license its essential patents to competitors on fair, reasonable and non-discriminatory terms. Or, more specifically, Samsung is 'using certain patents as a basis for improper legal actions that seek to block the sale of competitors' products.' The article says Google (because of its recent acquisition, Motorola Mobility) is under the same scrutiny."

Comments

Says Apple?

[Terry Pearson]

Nothing like the pot calling the kettle black!

Re:Says Apple?

[AmiMoJo]

Just another move in the on-going patent wars. Apple must ultimately lose, or we are all screwed.

Re:Says Apple?

[crazyjj]

I feel like there should be a smoking robot somewhere repeating "DOES NOT COMPUTE! DOES NOT COMPUTE!"

Re:Says Apple?

[Jeng]

I feel like there should be a drinking and smoking robot somewhere repeating "Bite My Shiny Metal Ass"

Re:Says Apple?

[Cederic]

So for the record, Apple really isn't abusing standards essential patents like Samsung/Motorola.

I wasn't aware that Samsung were abusing standards essential patents at all.

My understanding is they're willing to licence them on fair and reasonable terms. Apple on the other hand insist on using them without licencing them.

charging absurd rates

So Samsung want $6 (per phone) for patents essential to the very nature of a device, while Apple want $30 (per phone) for patents that should never have been fucking granted in the first place.

While you're right about absurd rates, I'm not sure you realise just who is trying to charge them.

Re:Says Apple?

[Cederic]

Samsung however did agree to license certain patents at a fair price

I'd say 2.4% is a very fair price, especially when being asked to pay up to 40% for far less valuable patents.

I'm not emotionally attached, beyond being fucked off with Apple's bullshit behaviour. I just happen to swear all the fucking time.

Re:Says Apple?

[Anonymous Coward]

Again, YOU miss the point. There was no abuse. No one was denied those patents. Apple wasn't denied those patents. They just thought $6 for actually useful and complex patents are way too high. Then they turn around and say that their obvious application of plugins to search and ease-in animations to scroll is worth $30. Hypocrisy much?

Re:Says Apple?

[GoatCheez]

Samsung however did agree to license certain patents at a fair price, and they are trying to charge some vendors (who compete more aggressively and charge them a lot for patents, e.g. Apple) significantly different terms than others

I was under the impression that the vendors that got lower prices did so because of cross-licensing agreements.

Samsung: "Oh, you want this FRAND patent but don't want to pay $6? Okay, well how about you license us the technology for your patent xxxxx, and we'll lower the rate to $1"

Normal Vendor: "That sounds reasonable. Patent xxxxx is trivial compared to your standards essential patents. Deal."

Apple: "NO WAY! We don't want to pay a dime!"

Re:Says Apple?

[Elldallan]

Other licensees typically write cross-license agreements where they offer some of their own patents in return and therefore gets a sometimes much lower rate.
Apple wants the lower rates without offering any other patents in return.

Re:Says Apple?

[Rich0]

So, Apple just has to pay Samsung the FRAND licensing fee, which they are refusing to do. I hear it is just a couple of bucks per phone. Everybody else pays that to Samsung, or an equivalent value in cross-licensing other patents.

Re:Says Apple?

[sensationull]

And Apple gets no scrutiny, the US should go to a little third world country to find out how to be less corrupt, justice, what a joke.

... what?

[ZiakII]

Samsung is 'using certain patents as a basis for improper legal actions that seek to block the sale of competitors' products.'

Can Apple sue Samsung for using Apples business plan?

a little like the pot calling the kettle black

[starworks5]

Seriously? you mean thin tablets with rounded corners, is any less worse of an abuse than what samsung has done?

Where's the same scrutiny for Apple?

[dclozier]

Yes their patents may not be under FRAND but it looks like they *should* be.

Apple's Licensing Offer To Samsung Raises Questions About FRAND Rates and What's Behind the Attacks on Google

Re:Where's the same scrutiny for Apple?

[JWW]

If using Foxconn makes a company "not American" then there aren't very many American tech companies.

not even

[poetmatt]

This is almost comedy - apple is going to try to claim what samsung proved *apple* did in the lawsuit against samsung which it has now basically lost? Talk about trying for a third attempt to stop your competition through abusing the legal system. Outlined here: http://www.groklaw.net/article.php?story=20121022054044954

summary is that Apple:
sued samsung, claiming samsung abused patents ("charging too much!") while simultaneously abusing patents and encouraging people to use windows phones (hello antitrust!) and anyone other than google. This should set the DOJ off onto investigating *apple/ms/oracle*.

Not only is that hilariously pot -> kettle, but also it doesn't mean the DOJ is investigating anything.

Re:not even

[starworks5]

Not even sound jurisprudence will get in the way of crony capitalism, the higher you get in the appeals process the more it appears to be a kangaroo court.

Re:not even

[Synerg1y]

Interesting read, I think ultimately this patent war will hurt Apple a lot more through PR than anything. Probably won't matter in a few years, their PR is going to shit now anyways (a smartphone w/o working maps anyone?), so... when Apple goes out of business, are those patents then invalidated?

Re:not even

[viperidaenz]

A Patent Troll will buy them and sue everyone else all over again. That's how the system works.

Re:not even

[Desler]

It's determined by their inclusion into a published standard which has rules about FRAND licensing of all included patented works. Apple's patents aren't part of such a standard and not subject to FRAND rules. What was hard about that?

Re:not even

[Anonymous Coward]

Now turn your iphone 5 on. See if the maps still works.

Re:not even

[Anonymous Coward]

It works fine as long as you're in a big US city. The rest of the world doesn't work fine, if at all.

Re:not even

[tlhIngan]

What determines a patent on a standard requiring RAND licensing? It would seem that 'pinch to zoom' and 'slide to unlock' have become de-facto standards for touch-screen devices. How is it that trivial patents like those can be used to block sales of a device when a patent that controls the basic functioning of a device must be licensed to precisely those competitors that are abusing the trivial ones? And you can't even block sales of the devices when the infringer refuses to strike a RAND deal...

Easy.

A standards body, like IEEE, 3GPP, etc., decide they want a new standard. Ethernet (yes, there are patents on all parts). WiFi (plenty to go around). 5G, Codec. whatever. They get together industry to help them produce the new standard. Industry presents their technology, and they hash out what will make it and what doesn't. As a condition for having the technology included in the new standard, all related patents to use that technology must be FRAND licensed. Otherwise you get a really broken spec where competitors cannot implement the standard because the companies refuse to license.

It's also a big game of political football - technologies that are great may be shunned and inferior ones used because the company with the inferior technology greased more palms. It's pretty lucrative.

Basically a patent is FRAND licensed if it's used in a standard for that standard only, because you can't implement the standard without that patent.

Apple needs ot license Samsung patents in order to produce a phone because Samsung put their technology into the celluar spec, probably LTE or 3G, and you cannot build a phone without those patents (implementing the standard automatically violates the patent).

However, the other things like pinch-to-zoom and slide-to-unlock (if valid), are not part of a standard (there's no standard for "smartphone" that everyone has to follow). You could tap a sequence of numbers to unlock (say, entering a PIN code). You could require the user press the power button three times to unlock, etc.

An de-facto standards aren't standards - Microsoft doesn't have to license you the Office patents to implement something that reads Office documents (which they provide), even though Office is a defacto standard in business. Well, they do for their XML standard (because they submitted it as a standard), but not for say, the .doc format.

TiVo's got the same thing - they have a bunch of core DVR patents that if you implement one, you pretty much have to license it, but they don't have to.

As an aside, a lot of standards also have licensing bodies where you can acquire a license to every patent for one fee without having to talk to any of the participants - MPEG has MPEG-LA to license you all the patents used for a video codec, I think the IEEE has one as well for Ethernet and WiFi. 3GPP doesn't (which means if you want to build a phone, you have to talk to everyone).

Re:not even

[Joce640k]

This is almost comedy

No, it is comedy, a farce to be exact.

Re:not even

[freman]

That was my first reaction - if apple hadn't started this shit it wouldn't be a problem

The mobile phone industry was getting along quite happily before apple came along, minor squibbles and scuffles but for the most part it was a quiet industry.... apple comes along and starts suing everyone...

Besides... how many small countries does apple want to buy?

Re:not even

[PortHaven]

OkaY,

Any Slashdotters want to form a standards association with me. We will evaluate and release a standard for intuitive network connected device (INCD) interactions, recommended design layouts, and features.

> an INCD should have a rectangular shape. It is preferably that a 16:9 ratio is utilized but not required.
> an INCD should have slightly rounded faces to reduce user injury.
> an INCD should have a flat screen, preferably with touch sensitivity.
> an INCD should adopt a number of gestures:
- bringing fingers together should bring content closer together. Moving apart should spread concent.
- rotating two fingers should result in rotated content.
- tapping should trigger actions
- etc
- etc

Re:not even

[Elldallan]

From what I read the problem is that the typical negotiations on FRAND patents is that I want to license patent X and in return u get to license patent Y plus $Z(or the other way around). This is of course fine but then Apple comes along and wants to license some FRAND patents but refuse to include any of their own patents in the deal but they still expect to pay only $Z. Samsung tells Apple no way thats completely unreasonable, either you agree to license us some of your patents or you pay a lot more than $Z... Apple does not like that and instead decides to whine to the Department of Justice and the ITC.

Re:not even

[LodCrappo]

"innovation oozing out of every pore"

what innovation? outside of the RDF, Apple's devices contained nothing but existing technology, much of which in fact was invented by the very companies they are now abusing the legal system to harm.

Oh for fsck's sake

[Anonymous Coward]

Put the CEO of Apple and the CEO of Samsung in a room (rounded corners optional). The last one alive is the winner of EVERYTHING.

Re:Oh for fsck's sake

[mrbester]

This is true even if Apple sent an ex-CEO as they'd argue about the meaning of "alive" citing "Weekend at Bernie's" (an Apple film, remember? No? Have a lawsuit to jog the memory) as prima facie evidence.

That's Funny, the ITC Sees it Completely Different

[Chibi Merrow]

According to the ITC judge reviewing Apple's complaints about Samsung's standards essential patents, Apple didn't avail themselves to any of the existing remedies when they felt Samsung wasn't offering them a fair licensing deal. They essentially said "You're asking for too much, so we're not paying anything."
If Apple really felt the prices were too high, there are processes in place to force Samsung to the negotiating table. They didn't use any of them. There's no evidence they even made a counter-offer.
Seems more like Apple just doesn't care about other people's patents than Samsung is offering an unfair deal.

Re:That's Funny, the ITC Sees it Completely Differ

[Chibi Merrow]

Oh but it's completely different.

Apple wants the product banned because it has rounded corners and lets you search for stuff.

Samsung wants the product banned because it uses an international communication standard that cannot be implemented without a technology that Samsung invented.

I mean, c'mon, can't you see how much better Apple's case is? ;)

Re:Samsung's no angel.

[Drathos]

These aren't submarine patents, like what Rambus did.

This is Apple pulling double standards. Lots of companies have licensed Samsung's standards-essential patents, but Apple refused to. Just because it's FRAND, doesn't mean that Apple can ignore the need to license them. There is some question of patent exhaustion (I think that's the right term), but the courts seem to be inconsistent in dealing with it (see CSIRO vs Buffalo Technology).

Apple has a long history of ignoring other people's/companies' IP, but crying foul over their IP, which is largely questionable.

Re:That's Funny, the ITC Sees it Completely Differ

[viperidaenz]

Samsung wants the product banned because it uses an international communication standard that cannot be implemented without a technology that Samsung invented that everyone else is paying royalties for but Apple refuses to do so, claiming the price is too high and not even attempting to negotiate.

FTFY.

Re:Hm

[Stargoat]

Because if we looked at patents, we would shortly thereafter look at copywrite. And that would offend the Mouse.

Don't blame Samsung

[walterbyrd]

This is 100% Apple's fault. Apple started all of this. Samsung, Google, everybody else, is trying to protect themselves against Apple.

Re:Samsung's no angel.

[FloydTheDroid]

First mention of patent exhaustion I've seen in this thread at my threshold.

I believe what happened was Apple bought Qualcomm's chipset to implement wireless and Samsung had an agreement with Qualcomm regarding the licensing of those chips. Samsung basically changed the agreement so that Apple was not properly licensed like every other company which used those chips.

Xerox parc

[Anonymous Coward]

Actually what you know as a computer was invented by Xerox Parc and copied by Apple, from mouse to Gui to Windows, all copied. When Apple sued Microsoft for 'look and feel' they lost.

As to the Creative Patent problem, that's a patent office problem. Just because one troll company was granted a vague broad patent, doesn't mean the fix is to grant all companies vague broad patents. The problem here is the patent system is a complete joke, not that the 'wrong' companies are abusing it.

Re:Apple is the victim here, not the bully.

[oobayly]

I love this quote from a former Apple executive:

He explained features like “slide to unlock” took years to perfect, and “other companies shouldn’t be able to steal that.”

I think they need some better software engineers.

Re:That's Funny, the ITC Sees it Completely Differ

[Chibi Merrow]

Apple is of the opinion that they do not owe any licensing fees because those fees have already been paid by their parts supplier. This decision has been affirmed by every court that's reviewed it.

Except, of course, the ITC judge...

The Administrative Law Judge concludes that the evidence is not sufficient to support Apple's patent exhaustion defenseâ¦.And even though Apple claims that {[redacted]}, according to one of the cases Apple relies on, Apple v. Motorola, No. 1:11-cv-03540 (N .D. Ill.), Motorola had requested a 2.25 percent royalty rate of sales, which is closely comparable. (Id. at 17.) While this may be an apples and oranges comparison, the fact is that Apple has offered only attorney argument, rather than substantive evidence, that Samsung breached its FRAND obligations. From all appearances, {[redacted]}, even though there was a mechanism in place under ETSI Guidelines for resolving disputes. Dr. Walker did not testify, nor could he, as to the bona fides of Samsung's licensing offer to Apple; nor did anyone else. Judge Posner, in the Motorola case found the expert evidence offered by the parties with respect to damages inadequate, but similarly, Apple's evidence of what constitutes a FRAND license under the facts of this Investigation is inadequate.

For reasons previously discussed, the Administrative Law Judge finds that there is insufficient evidence to warrant a finding that Samsung breached its obligations with respect to its membership, and participation in ETSI.

For the foregoing reasons, the Administrative Law Judge concludes that Apple has not sustained its burden of proof that Samsung's sales to Qualcomm serve to exhaust Samsung's patent rights with respect to the '348 and the '644 patents.

It may be true that Apple didn't present evidence to that effect, but Samsung was asking for nearly $15 per iPhone, which is probably more than Apple paid for the RF chips that use Samsung's FRAND patents. It's hard to see how you could consider that a reasonable price.

Because it's less than half what Apple was asking per Samsung phone for their bogus patents?

That being said, I don't think $15 is reasonable. But there's a mediation process Apple can use to negotiate this. Instead, they decided to negotiate a lower price by suing Samsung.