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.
Thread beginning with comment 539727
To view parent comment, click here.
To read all comments associated with this story, please click here.
RE[4]: Apples and oranges
by oskeladden on Tue 23rd Oct 2012 19:25 UTC in reply to "RE[3]: Apples and oranges"
oskeladden
Member since:
2009-08-05

Reasonable does not mean that the licensee gets to choose the price. Reasonable can be a billion USD and unreasonable can be 10 USD. It's not defined, as their FRAND commitments don't define what is reasonable.(Remember that Apple and Nokia had exactly the same issue)

Actually, 'reasonable' is a term with a very clear meaning in law - it's chief significance is that it imposes objective limits on what a licensor can charge (i.e., a licensor cannot charge what he subjectively decides he wants to charge). There's been quite a lot written on how it'd operate to restrict the scope of what a licensor can demand in relation to a patent subject to FRAND licensing requirements. The consensus among lawyers who work in the area is that it'd be much more restrictive than the 'Georgia-Pacific standard', (which is based on 15 factors, and used to assess damages for infringement in non-FRAND cases). This is because reasonableness must be judged in relation to the relative contribution and importance of the patent to the overall standard, not in the abstract, and because of the requirement that the royalty be non-discriminatory.

There isn't any FRAND-specific case law, because never before in the history of standard-setting has any organisation sought to use FRAND patents as a weapon against a competitor. But the legal principles are nevertheless very clear. I can recommend some articles in law journals if you're interested (and have access to a law library).

Reply Parent Score: 2

RE[5]: Apples and oranges
by Alfman on Tue 23rd Oct 2012 20:17 in reply to "RE[4]: Apples and oranges"
Alfman Member since:
2011-01-28

oskeladden,

"Actually, 'reasonable' is a term with a very clear meaning in law - it's chief significance is that it imposes objective limits on what a licensor can charge (i.e., a licensor cannot charge what he subjectively decides he wants to charge). There's been quite a lot written on how it'd operate to restrict the scope of what a licensor can demand in relation to a patent subject to FRAND licensing requirements."



"I can recommend some articles in law journals if you're interested (and have access to a law library)."

I've never read any legal definition of FRAND licensing. If one exists I'd highly appreciate any documentation you can provide/quote to clarify it.

Reply Parent Score: 2

RE[6]: Apples and oranges
by oskeladden on Tue 23rd Oct 2012 22:00 in reply to "RE[5]: Apples and oranges"
oskeladden Member since:
2009-08-05

Sure, I'll do this tomorrow, when I'm back in the office.

Reply Parent Score: 1

RE[6]: Apples and oranges
by oskeladden on Wed 24th Oct 2012 08:25 in reply to "RE[5]: Apples and oranges"
oskeladden Member since:
2009-08-05

I've never read any legal definition of FRAND licensing. If one exists I'd highly appreciate any documentation you can provide/quote to clarify it.

Right! The classic paper - which represents what is clearly now the majority view - is D. Lichtman, 'Understanding the RAND Commitment' 47 Houston Law Review 1023 (2010). It's also on SSRN, in case you're interested and don't have access to Lexis or HeinOnline - http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1783406

As you can see, the main point he makes is that a FRAND license is intended to ensure that a company cannot charge a higher royalty than the patent's ex ante value simply because it's become part of a standard, and that FRAND decouples the calculation of damages from the standard test. This is now the generally accepted position.

The main dissenter is Damien Geradin, of Tilburg University, who maintains that - in effect - FRAND commitments impose no real legal commitments. His views became very influential because he advised Qualcomm in their action against Nokia, but lost ground once people who understood contract law a bit better entered the debate. His argument is in effect a patent owner's brief, which is interesting as a matter of competition law and competition economics but has no real basis in Anglo-American contract law - contract interpretation focuses on giving effect to the parties' commercial purpose, and as Douglas Lichtman points out in his piece Geradin's arguments leads to absurd results when seen from this perspective.

The footnotes to Lichtman's paper give you a good review of the literature up to 2010. There've been a few more papers since then, but mostly from an antitrust / competition law perspective.

Reply Parent Score: 2

RE[5]: Apples and oranges
by JAlexoid on Tue 23rd Oct 2012 21:00 in reply to "RE[4]: Apples and oranges"
JAlexoid Member since:
2009-05-19

I fail to see where you oppose my point.

Reply Parent Score: 2

RE[6]: Apples and oranges
by oskeladden on Tue 23rd Oct 2012 21:51 in reply to "RE[5]: Apples and oranges"
oskeladden Member since:
2009-08-05

I fail to see where you oppose my point.

Err..

My point is that:
a) Apple is unrestricted in relation to the price it can legally charge to license its patents.
b) Motorola is subject to severe restrictions in relation to the price it can legally charge to license its patents.

The size of the royalty Apple is demanding for its patents is therefore legally irrelevant to the size of the royalty Motorola is legally entitled to demand from Apple. Groklaw's complaint - that Apple is being inconsistent in claiming that Motorola is charging too much when it is demanding more - is therefore, in legal terms, totally incorrect. The fundamental flaw in it is that it is based on comparing a figure that is not subject to any legal restrictions with a figure that is - and the entire question is about whether the legal restrictions applicable to the latter have been complied with.

If you agree with all of this, then great - you did, however, start off claiming that Groklaw's complaint has substance.

Edited 2012-10-23 21:52 UTC

Reply Parent Score: 1