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Can you explain how Apple ignored FRAND obligations entirely? Qualcomm already licensed the patents in its chips that they sold to Apple, but then Samsung want

by gareim 14y ago

Can you explain how Apple ignored FRAND obligations entirely? Qualcomm already licensed the patents in its chips that they sold to Apple, but then Samsung wanted more because it was Apple. That itself is violating the "non-discriminatory" part of FRAND. How is this Apple's fault?

justinschuh 14y ago
This kind of misinformation is the problem. Qualcomm never had a license for Samsung's FRAND patents. If they did, there wouldn't be an issue here. What Qualcomm had was a contractual agreement protecting their customers from Samsung pursuing FRAND patent fees, but that contract expired in early 2011. So, now Samsung is using their FRAND patents in defense against Apple's thermonuclear patent war.
- gareim 14y ago
  Can you provide a source for that? If this is true, that changes quite a lot. Also, how do you feel about Samsung asking for 2.4% of the chip price for a single patent when there are so, so many patents that go into making a device like the iPhone? Is that fair? Edit: Forget about the source, I found some very easily (Google "samsung frand qualcomm"). But still, I think it's quite discriminatory to demand from Apple 2.4% for each patent, especially when these patents are seen as standards for cellphones.
  - justinschuh 14y ago
    Let's try that question the other way. Is it fair that Apple is trying to extort $27 per device out of Samsung (many times more than Samsung is asking for on its FRAND patents)? While we're at it, is it fair that non-iPhone users in the US subsidize Apple's huge profit margins? Because, Apple demands such a high subsidy (and competitive pricing on-contract) that the carriers make the difference up on other customers. So, is it fair that I'm forced to pay higher rates on my plan because Apple is intentionally leveraging their size to distort the market?
    - deleted 14y ago
      [deleted]
    - briandear 14y ago
      Non-US iPhone users aren't subsidizing anything. While the carriers in the US do subsidize phones, carriers don't just absorb that cost, it gets passed along to the end user. These arguments are kind of similar to those presented by people wanting higher corporate taxes without realizing that those costs are ultimately paid by the consumer.
      - justinschuh 14y ago
        Uhm... you misread my comment entirely, and then diverged into politics. I don't know how to respond, because I'm not sure what argument you're making that relates to my point.
    - josephlord 14y ago
      Fair, I don't know if the patent is valid Samsung could just work around it. If Apple have a valid patent as I understand it they can license it for any price that they want OR completely refuse to license it provided they haven't made any agreements or commitments to the contrary. That is the normal case with patents, exclusive rights. When you step into a standards body and offer your technology you give up those rights unless you specifically and clearly declare that you aren't doing so (in which case other options will be chosen by the standards body). So there are other ways to look at it. Is it fair that Samsung pushed it's technology into a standard and then holds other implementers to ransom or asks them to give up their legal rights to enter the market? As I say elsewhere I'm not picking sides on the validity of particular patents or what damages or even FRAND license fees should be but I do think it is important that FRAND commitments are given weight and enforced. For me forced cross licenses and percentages of finished product price are both discriminatory and not FRAND. Even percentage of chip price I have my doubts about as it discourages integration of chips with its hardware and power advantages. This doesn't mean that it must be less than 1c or even $1 but some mechanism to be fair to all patent holders while not pricing the standard out of use needs to be found.
- makomk 14y ago
  Also, as I recall Apple moved to Qualcomm chips from another chipset provider after they got sued by I think Motorola because neither they nor the chipset provider had come to any kind of licensing or contractual deal over the FRAND patents.
- spiralpolitik 14y ago
  The agreement didn't just expire, Samsung terminated it with the express purpose of counter-suing Apple. Note that Samsung to date has not gone after any other Qualcomm customers for increased patent license fees they can hardly claim they are being non-discriminatory. Not sticking to the FRAND terms it agreed to is a pretty bad move on Samsung's part. I believe the EU not happy about this development and is already looking into this so the move could blow up in Samsung's face.

by gareim 14y ago

justinschuh 14y ago

This kind of misinformation is the problem. Qualcomm never had a license for Samsung's FRAND patents. If they did, there wouldn't be an issue here. What Qualcomm had was a contractual agreement protecting their customers from Samsung pursuing FRAND patent fees, but that contract expired in early 2011. So, now Samsung is using their FRAND patents in defense against Apple's thermonuclear patent war.

gareim 14y ago
Can you provide a source for that? If this is true, that changes quite a lot. Also, how do you feel about Samsung asking for 2.4% of the chip price for a single patent when there are so, so many patents that go into making a device like the iPhone? Is that fair? Edit: Forget about the source, I found some very easily (Google "samsung frand qualcomm"). But still, I think it's quite discriminatory to demand from Apple 2.4% for each patent, especially when these patents are seen as standards for cellphones.
- justinschuh 14y ago
  Let's try that question the other way. Is it fair that Apple is trying to extort $27 per device out of Samsung (many times more than Samsung is asking for on its FRAND patents)? While we're at it, is it fair that non-iPhone users in the US subsidize Apple's huge profit margins? Because, Apple demands such a high subsidy (and competitive pricing on-contract) that the carriers make the difference up on other customers. So, is it fair that I'm forced to pay higher rates on my plan because Apple is intentionally leveraging their size to distort the market?
  - deleted 14y ago
    [deleted]
  - briandear 14y ago
    Non-US iPhone users aren't subsidizing anything. While the carriers in the US do subsidize phones, carriers don't just absorb that cost, it gets passed along to the end user. These arguments are kind of similar to those presented by people wanting higher corporate taxes without realizing that those costs are ultimately paid by the consumer.
    - justinschuh 14y ago
      Uhm... you misread my comment entirely, and then diverged into politics. I don't know how to respond, because I'm not sure what argument you're making that relates to my point.
  - josephlord 14y ago
    Fair, I don't know if the patent is valid Samsung could just work around it. If Apple have a valid patent as I understand it they can license it for any price that they want OR completely refuse to license it provided they haven't made any agreements or commitments to the contrary. That is the normal case with patents, exclusive rights. When you step into a standards body and offer your technology you give up those rights unless you specifically and clearly declare that you aren't doing so (in which case other options will be chosen by the standards body). So there are other ways to look at it. Is it fair that Samsung pushed it's technology into a standard and then holds other implementers to ransom or asks them to give up their legal rights to enter the market? As I say elsewhere I'm not picking sides on the validity of particular patents or what damages or even FRAND license fees should be but I do think it is important that FRAND commitments are given weight and enforced. For me forced cross licenses and percentages of finished product price are both discriminatory and not FRAND. Even percentage of chip price I have my doubts about as it discourages integration of chips with its hardware and power advantages. This doesn't mean that it must be less than 1c or even $1 but some mechanism to be fair to all patent holders while not pricing the standard out of use needs to be found.
makomk 14y ago
Also, as I recall Apple moved to Qualcomm chips from another chipset provider after they got sued by I think Motorola because neither they nor the chipset provider had come to any kind of licensing or contractual deal over the FRAND patents.
spiralpolitik 14y ago
The agreement didn't just expire, Samsung terminated it with the express purpose of counter-suing Apple. Note that Samsung to date has not gone after any other Qualcomm customers for increased patent license fees they can hardly claim they are being non-discriminatory. Not sticking to the FRAND terms it agreed to is a pretty bad move on Samsung's part. I believe the EU not happy about this development and is already looking into this so the move could blow up in Samsung's face.