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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RE[6]: Apples and oranges
by oskeladden on Wed 24th Oct 2012 08:25 UTC 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[7]: Apples and oranges
by Alfman on Wed 24th Oct 2012 14:46 in reply to "RE[6]: Apples and oranges"
Alfman Member since:
2011-01-28

oskeladden,

Thank you for that research!

Well, as illogical as it seems to not negotiate on price until after an official agreement, I guess I have a better feeling for why standards bodies agree to such vague "RAND" terms in the first place. Going through the thousands of potential patents to assess license fees up front is not something the standards body can afford to waste time doing, so they say "Screw it! We'll call them all RAND and move on."

I guess that I'm on the same page as the author; I dislike the ambiguities with the RAND approach, but I can understand why it's used in favor of getting bogged down in endless negotiations over what price to charge over individual bits of code.


My own opinion is if these firms themselves can't even be bothered to read each other's patents when building a standard, then what motivation should anyone, anywhere in the world ever have to read them either? If they had relevant technical merit in the first place, surely everyone on the standards committee would have read and understood each one of them. It reaffirms my belief that software patents have zero utility to devs who actually build stuff are mostly a means for lawyers to take profits out of software.

oskeladden, it occurs to me that you might be a patent lawyer yourself, are you? If so, no offence to you personally, I just liked the software field better before the lawyers got heavily involved ;)

Edited 2012-10-24 14:54 UTC

Reply Parent Score: 2

RE[8]: Apples and oranges
by oskeladden on Wed 24th Oct 2012 19:14 in reply to "RE[7]: Apples and oranges"
oskeladden Member since:
2009-08-05

oskeladden, it occurs to me that you might be a patent lawyer yourself, are you? If so, no offence to you personally, I just liked the software field better before the lawyers got heavily involved ;)

Well, in a sense - 'real' patent lawyers tend to be scientists (or, at any rate, have degrees in science), but I did work with patents and IP generally. I haven't been in practice for around 12 years, though - I entered academia around the turn of the century.

I was a programmer before I became a lawyer, so I understand the issues involved. My personal view is that patents aren't really suitable for software - software needs sui generis protection, somewhat like plant varieties have. The real difficulty, though, is that it can be very hard to distinguish between software and hardware when you start thinking of embedded systems and even instructions hard-coded in printed circuit boards. That was how patent protection for coded computer instructions got started.

By itself, software patents actually wouldn't have been a disaster (indeed, the EPO hands them out quite frequently without causing the same level of problems that the USPTO does). The real problem came from the fact that the US Supreme Court decided that patents should be allowed on 'methods', because those could be inventions too. The result was that patents suddenly became available on any method implemented by a computer program, with the results we see today. I'm not sure where the law will go from here, because software patents are now so entrenched that it'll be hard to root them out, but as the ongoing litigation shows the system really is completely broken.

Reply Parent Score: 2