Linked by Thom Holwerda on Mon 22nd Oct 2012 13:36 UTC
Legal "One of the exhibits Samsung has now made public tells an interesting tale. It's the slide presentation that Apple showed Samsung when it first tried (and failed) to get Samsung to license Apple's patents prior to the start of litigation. While some of the numbers were earlier reported on when the exhibit was used at trial, the slides themselves provide more data - specifically on the difference between what Apple wanted Samsung to pay for Windows phones and for Android phones. The slides punch huge holes in Apple's FRAND arguments. Apple and Microsoft complain to regulators about FRAND rates being excessive and oppressive at approximately $6 per unit, or 2.4%; but the Apple offer was not only at a much higher rate, it targeted Android in a way that seems deliberately designed to destroy its ability to compete in the marketplace." Eagerly awaiting the 45 paragraph comment explaining how this is completely fair and not hypocritical at all. Bonus points if it includes something about Eric Schmidt being on Apple's board, and, double bonus point if it mentions one of the QWERTY Android prototypes. Mega Epic Bonus if it somehow manages to draw a line from Edison, Tesla, to Jobs.
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Apples patents are not FRAND
by vaette on Mon 22nd Oct 2012 14:48 UTC
Member since:

This is hugely misleading, the Apple patents in question are not FRAND, they can charge whatever they want for them. There are many things wrong with the patent system, but this is not an example. It is not at all surprising that Apple offered an unreasonable deal, since what they really want is for Samsung to differentiate from the patents in question.

The difference between FRAND and non-FRAND is one of the things that isn't particularly broken about the patent system. Here other issues, such as broad and obvious patents, simply make it seem problematic.

Edited 2012-10-22 14:48 UTC

Reply Score: 2

Thom_Holwerda Member since:

The difference between FRAND and non-FRAND is one of the things that isn't particularly broken about the patent system.

It actually is a broken aspect - because it only works if the playing field is level.

So far, the mobile industry has worked on what is essentially a patent sharing scheme. The mobile phone companies would license each other patents - FRAND or not - to push the industry forward. If you had lots of valuable non-FRAND patents, you could get a discount on the FRAND patents from e.g. Nokia if you licensed those non-FRAND patents back to Nokia.

Up until Apple joined the industry, this worked fine. However, Apple had no interest in this reciprocal system, and instead, profited massively off FRAND patents - without signing license agreements, I might add, they just took them - while refusing to give back its own patents, while AT THE SAME TIME demanding the same treatment as other companies that DID share their patents.

This is CLEARLY not in the spirit of what the FRAND licensing system in the industry had been about up until that point. We now see the system budging and crumbling, because suddenly, crappy software and design patents are now infinitely more valuable than cold and hard FRAND hardware patents - patents for a standard that took massive amounts of time, investment and work to design, implement, and spread across the globe. The effort it took to get GSM, 3G, and associated technology working is of such an immense magnitude it's hard to fathom. Bouncy scrolling and rounded corners fall into more than insignificance here.

There would be no mobile phone - smart of not - without Motorola and Nokia. We'd still have phones - feature and smart - without Apple. Yet, it's Apple's patents that are worth the most. Do you see how unfair that is?

So no, the FRAND system is no longer working - because a new player decided to misbehave itself.

Edited 2012-10-22 15:05 UTC

Reply Parent Score: 7

jared_wilkes Member since:

Do you even have the slightest shred of evidence that "everyone prior to Apple" willingly provided reciprical licensing to non-FRAND patents in exchange for FRAND patents, or do you not even mind just making crap up now?

(Last I checked: this started with an Apple and Nokia dispute that was resolved amicably with Apple resolving to pay for FRAND patents at a reasonable rate with no reciprical licensing of non-FRAND patents. And it's only Google and Samsung demanding absurd rates on FRAND patents.)

And, even if you had any evidence of such behavior, this is still a violation of FRAND: FRAND Standard Essential Patents should not be used as levers to gain access to other IP. Ultimately, this butts up against non-discriminatory (i.e. companies with useful IP get FRAND patents cheap; companies without useful IP pay more for FRAND patents than others).

Edited 2012-10-22 15:41 UTC

Reply Parent Score: 3

Tony Swash Member since:

The mobile phone companies would license each other patents - FRAND or not - to push the industry forward.

Rubbish. All companies do everything they do so as to succeed in business - i.e. make money. Companies can have all sorts of different business models and do all sort of things in particular ways to suit their business model but their business model is designed to do one thing: succeed in business. None are concerned with 'pushing the industry forward' except as a by product of making more money. If they could slow the industry down and make money they would.

The reason that companies such as Samsung or Motorola or Nokia have offered FRAND patents in the past was to make money. It was based on a calculation that showed that going the FRAND route made more money than not going the FRAND route. The basis of those calculations was the low innovation rate business model that prevailed in the handset market before the disruption of the iPhone which caused a rupture with previous market conditions. In the new post-iPhone market conditions offering patented technology within a FRAND framework makes less financial sense, hence companies have slowed FRAND offerings and attempts to agree new FRAND agreements (micro-sim etc) are very fraught.

The old smart phone market conditions were relatively kind to lesser performing companies. The new smart phone market is lethal to lesser performing companies. Currently only two companies have working business models that ensure profitability and scale, and hence survival, in the new global smart phone market, that is Samsung and Apple. All other companies are struggling (with the possible exception of some companies currently restricted to the Chinese market) and almost none will survive in the market.

In this context the struggle between Samsung and Apple will be intense and fought on many fronts. Neither will offer the other anything other than painful licensing terms, both will screw the other for every dollar and every drop of blood, neither are interested in FRAND much anymore. Apple is busy severing every dependency it has on Samsung in it's supply chain and severing every link it can to Google's service stack so it can reduce it's vulnerabilities, it will have completed that process within a couple of years at most.

The previous reordering of the handset and device market post iPhone was only stage one of the disruption, we seem to be entering a new period now where players such as Microsoft and Google and Amazon realise that they have to mimic Apple's business model of making and selling families of integrated devices with integrated eco-systems in order to survive in the modern smart device global market. They won't all succeed. Samsung looks like an odd one out here because it has not, yet, gone with an integrated device service stack model and has continued to ride Google's service stack. That may well change. The relationship between Google and Samsung will be one of the most interesting to watch in the next few years as we discover which is the tail and which is the dog.

Reply Parent Score: 2

majipoor Member since:

Without signing a license agreement for FRAND patents? That is nonsense: there are thousands of FRAND patents in the 3G standard alone and probably as much in the WiFi, Bluetooth and other standards. Yet Apple has only problems with Samsung and Motorola because they excluded Apple from the usual way of licensing FRAND patents which is as a part of the price of the standard chip (Qualcomm or Intel for 3G).

Reply Parent Score: 2

RE: Apples patents are not FRAND
by Lorin on Mon 22nd Oct 2012 21:41 in reply to "Apples patents are not FRAND"
Lorin Member since:

Only thing Apple invented was its company logo, it is impossible that a company entering the mobile market 5 years ago could have invented critical parts of the system over companies doing this for more than 20 years.

The iPhone and iPad are nothing more than the marriage between a PDA and a phone, all features having existed in each are prior art.

Reply Parent Score: 5

quackalist Member since:

And or bouncing into oblivion

US patent office kills off Apple's bounce-back patent

Reply Parent Score: 2