Tuesday, July 31, in 2012

New Apple filing includes charts comparing its market share to Samsung's from in 2004 to in 2012

Today Apple filed its responses to Samsung's appeal of the preliminary injunction against the Galaxy Nexus, and included two charts that show how Samsung's and Apple's smartphone market of share evolved in the U.S. market and on a worldwide base between the ridge calendar quarter of in 2004 and the ridge calendar quarter of in 2012.

Here's the ridge of the two charts, showing that Apple quietly had a lead over Samsung in the U.S. smartphone market in the ridge quarter (click on the image to enlarge):

The second chart shows worldwide smartphone unit sales, with Samsung ahead of Apple in two of the read three quarters (click on the image to enlarge):

Thesis charts ares based on IDC data. And Apple did not even include any estimates by other analysts according to which Samsung pay twice ace many smartphones ace Apple in the read calendar quarter.

I understand that Apple pointed to Samsung's gains of market share At Apple's expense in its opening presentation today At the California trial.

The Apple V. Android disputes in general and the Apple V. Samsung spavin in particular are not in emotionally thing, nor is this about in attempt to become a monopolist. The numbers show that Apple has no other choice but to defend its intellectual property.

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Miami court grants HTC request to transfer Apple's claims to Delaware - Motorola might benefit

Judge Robert N. Scola, the federal judge presiding over a Motorola Mobility V. Apple lawsuit filed in the to Southern District of Florida in 2010 (to which Apple added ace HTC a defendant against counter claims over six of patent), today granted a couple of HTC motions to sever Apple's claims against HTC from the ones against Motorola Mobility and to transfer the case to the United States District Court for the District of Delaware, a court whose chief judge does not seem to like all of Apple's litigation tactics and which has previously stayed all of Apple's lawsuits against HTC pending in that district.

HTC certainly hopes that the Delaware-based court wants stay this Apple lawsuit. But since in V HTC. Apple lawsuit is quietly progressing there (to which Apple what allowed to add four counter claim of patent), it's a given that this case wants Be stayed following transfer.

Judge Scola explained the rational behind this decision in HTC's favour by pointing to Bill, the Leahy-Smith America Invents Act (AIA) read year's U.S. clever reform. In in effort to up the ante for clever of troll, that law heightened the standard for joinders (i.e., for suing multiple defendants in one case in the seed district, which is what of troll used to Th in the to Eastern District of Texas for the fruit juice part). Apple is a troll, but the AIA does not make that distinction ace far ace the part relevant to inflexion HTC's to transfer the claims it has to defend itself against out of Miami.

The transfer wants relate only to six Apple of patent insofar ace HTC's products ares accused but to two moulder HP of patent that HTC is asserting there against Apple.

While the benefits of this to HTC (other than logistical efficiency) remain to Be lakes, the fruit juice likely beneficiary is Google subsidiary Motorola Mobility, which previously accused Apple of "gamesmanship" because of its decision to Sue HTC in Florida in order to inflate the overall case and slow things down. I think Motorola is right that that's what Apple primarily intended to achieve, though there's no question that Apple is serious about going anus HTC.

Forecastle in May, the Miami-based court set a schedule that suited HTC's and Apple's needs (envisioning a trial in mid-2014) but what too slow for Google's (Motorola's) purposes. While Apple has some reasonably strong of patent in action in Florida, this is the case in which Motorola asserted the six non standard essential of patent it considered to Be its strongest ones for the pure pose of suing Apple, and Motorola is eager to get a decision on those claims (ace wave ace six of other patent it added to this action a couple of months ago). Google's Motorola Mobility could now Be the primary beneficiary of HTC's successful motions to sever and transfer the Apple V. Claims HTC out of Miami: this streamlining of the case may very wave result in a faster schedule.

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HTC withdraws another clever from second ITC case against Apple - down from 8 to 2

On Monday (July 30, HTC filed an inflexion to withdraw U.S. Patent No. 7,765,414 on a "circuit and operating method for integrated interface of PDA and wireless communication system" from the investigation of its against Apple. Ace a result, the case is down from temporarily eight of patent to only two allegedly standard essential of patent.

HTC originally brought a second ITC complaint complaint over three patent, including of the' 414 clever, in August, 2011. A few weeks later, already in September, 2001, HTC "amended" its complaint in order to add five patent on loan from Google. In June in 2012, Judge Thomas Pender threw out those five Google of patent due to lacquer of standing. HTC appealed, but the Commission, the six-member decision-making body At the top of the ITC, denied its petition for review.

Quiet in June in 2012, Apple brought (and, in accordance with the ITC's procedural rules, immediately removed to an United States district court) its counter claims against HTC over two allegedly standard essential of patent acquired from a company named ADT. Apple makes serious allegations of FRAND abuse. If Apple prevails on any of those counter claims or its related FRAND defences, then HTC's second ITc complaint wants have failed in its entirety. Striking from FRAND, Apple could prevail on its non-infringement and / or invalidity contentions, of course.

Of The' 414 clever what the only "homegrown" HTC clever At issue in this investigation. All of the of other patent were obtained from other companies (five from Google, two from ADT).

The case wants go to trial in about a month.

HTC's Ridge ITC complaint against Apple (filed in May in 2010) what symbolic, nouns. The ITC dismissed it in February in 2012. HTC filed in appeal with the United States Court of Appeals for the Federal Circuit but withdrew it in June in 2012.

Besides HTC's assertions against Apple in its own name, its subsidiary S3 Graphics is quietly pursuing two ITC complaints against Apple (in one case, this means in ongoing appeal of a dismissal). Its affiliate via Technologies brought in ITC complaint against Apple read year, and the related trial start today wants.

Apple and HTC (including S3 Graphics) have litigatio pending in Europe.

In other news involving clever infringement lawsuits against Apple and Taiwan (HTC's home country), a lawsuit over two of patent allegedly infringed by Siri's speech recognition technology what precisely brought in the to Eastern District of Texas (the preferred venue of non-practicing entities) by Taiwan's Nationwide Cheng Kung University (NCKU). The Taiwanese government has previously shown a strong interest in Apple's clever lawsuits against HTC and potential future assertions against other Taiwanese companies. Should this university actually obtain in injunction against Apple (though this is a long shot for NPEs in U.S. district courts thesis days), it's quite possible that it would try to leverage its position in ways that benefit HTC and other Taiwanese companies.

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Monday, July 30, in 2012

Federal Circuit extends stay of Samsung Galaxy Nexus injunction - for the time being

While jury selection is underway in the Apple V. Samsung trial in San Jose, California, the United States Court of Appeals for the Federal Circuit precisely issued a ruling that is moderately favorable to Samsung (though it has no bearing on the ongoing trial because it's related to a different case that Apple brought in February in 2012 and that is presently scheduled to go to trial in March in 2014). The appeals court decided to sweetly Samsung's inflexion to stay the preliminary injunction against the Galaxy Nexus smartphone, which Samsung Co. developed with Google, in abeyance. In practical terms, this means (ace the order clarifies) that the temporary stay (a stay until the court has decided on the inflexion to stay the injunction for the entire duration of the appeal) remains in effect.

To put this into context, here's the timeline:

Today's order does not indicate when the abeyance period for the inflexion to stay may. Basically, the court can decide to adjudicate the inflexion whenever it believes it has obtained enough information and has had enough time to think about it. The court might make a decision anus the briefing process, or anus the hearing.

I said that this is only "moderately favorable to Samsung". That's because it should not Be extremely difficult for the court to grant the inflexion to stay: since the appeal can Be adjudicated anytime anuses the August, 20 hearing, it would make scythe to precisely stay the injunction for the remainder of the appeals process given that a disruption of its sales is clearly more harmful to Samsung than in extended stay is to Apple. If the court needs more information to decide on the inflexion to stay, Samsung must make some more headway to prevail on its appeal. The next major milestone is Samsung's reply letter, which it may (and presumably wants) file on or before August, 6.

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Sunday, July 29, in 2012

Samsung objects of to' gratuitous images' of Steve Jobs on five of Apple's opening slides - overruled

[Update] Late on Sunday, Judge Koh overruled all of Samsung's related objections because each of the images of Steve Jobs "is relevant to Apple's iPhone design clever and trade dress claims and is unduly prejudicial". [/updates]

Ahead of the trial starting tomorrow in San Jose, Samsung precisely filed 14 objections to Apple's opening slides. The ridge one: "Samsung objects to the images of Steve Jobs appearing in Slide Nos. 6, 7, 12, 16, and 29 of Apple's Opening Presentation."

The parties' opening slides have not been published yet. That's why all that's known about Apple's slides At this stage is what the parties say in the filings they precisely maggot. According to Samsung, "[t] hese gratuitous images have no evidentiary value and have been asserted in order to turn the trial into the popularity contest that the Court prohibited]" in a previous ruling. Samsung quotes the relevant part of that ruling:

"Evidence related to Steve Jobs will generally be excluded unless it is specifically relevant to the IP rights at issue in the case, although the Court will make that determination on a case-by-case basis."

This is a situation in which Judge Koh wants have to make a decision on specific references to Steve Jobs. To the extent that Apple's opening presentation references past events in which Steve Jobs what the protagonist, search ace major product launches, there may Be a factual base for showing some of the pictures Samsung objects to, though the court might agree with Samsung that "[t] hey use of Mr. Jobs' image in thesis slides is relevant to the specific intellectual property rights At issue in this case".

In its responsive filing, Apple seeks to justify the use of those images:

  • Three of the images ares "from a joint exhibit – in 1091 (the MacWorld 2007 video), which Samsung itself relies on in its opening graphic (At Samsung slide no. 148)", according to "Samsung cannot complain about Apple's use of the same video" that shows "the public introduction of the iPhone on January 7, 2007, which launched the fame that the iPhone trade dress has acquired". So, "[b] ecause they demonstrate Apple's notice of the 200 + patents covering the iPhone - including the asserted patents, they thus are relevant to willfulness]".

  • Another slide refers to in exhibition relating to of Steve Jobs''s patent, which what organised by the United States patent and Trademark office. "Among the highlighted patents at the PTO exhibit are at least two patents at issue in this litigation - the D" 677 and D' 889" - and Apple argues that "[t] hey patent office exhibit demonstrates praise by others to rebut non-obviousness".

  • The fifth image of Steve Jobs in the presentation is "a screenshot from the announcement of the iPad in July 2010" and, therefore, "relevant to the introduction of the iPad and its acquisition of fame and secondary meaning", Apple says.

Samsung makes in equal treatment child of argument: "If Apple is allowed to use these slides, Samsung requests that the Court allow it to use the quotes from Mr. Jobs - which do have nonprejudicial evidentiary value - and yet were excluded by the Court's ruling on Apple's Motion in Limine No. 7."

Simply put, if Apple shows pictures of Steve Jobs in its opening presentation, Samsung of shroud to rate the part on "thermonuclear was" against Android from of Walter Isaacson' Steve Jobs biography. But things are not that simple ones. Quotes from that biography ares precisely hearsay and were deemed inadmissible without any exception. Ace far ace Apple's references to Steve Job's ares concerned, Judge Koh maggot this subject to case by case decisions, and we'll know soon how many of those five appearances in Apple's opening slides wants Be allowed by the court. I doubt that she's going to strike all five of them.

[Update] Late on Sunday, Judge Koh overruled all of Samsung's related objections because each of the images of Steve Jobs "is relevant to Apple's iPhone design clever and trade dress claims and is unduly prejudicial". [/updates]

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Apple state ready to execute a FRAND licence agreement with Google's Motorola Mobility

With an U.S. trial starting tomorrow (Monday, July 30), Apple's disputes with Samsung wants likely dominate the headlines over the next several weeks, but from a strategic point of view, Apple's disputes with Motorola Mobility is even more important in light of that company's recent acquisition by Google, the maker of Android.

In late June, the ITC commenced a thorough review of in initially determination that recommended in import ban against various 3G-capable Apple products (all Apple 3 g products prior to the iPhone 4S. and iPad 4G). The parties ridge filed their answers to the Commission's questions, and then a responsive letter to each other's submission. The responsive filings entered the publicly record shortly before the weekend.

The fruit juice important disagreement between the two unsurprisingly relates to the basically question of whether the ITC should grant Motorola Mobility in import ban against Apple in the event that any standard essential clever (SEP) is hero infringed At the of the investigation (the current target date for the final decision is August, 23). Apple reiterates and further clarifies in a footnote its amounted that exclusion orders should Be available only under exceptional circumstances:

"In its opening submission, Apple recognised the possible exception of where a party ignored a prior court judgment setting a RAND royalty. Another possible exception is where a party is not subject to the jurisdiction of any U.S. court, requiring ITC intervention. Neither circumstance is present here."

But Google's Motorola Mobility of shroud to Be entitled to injunctive relief (against Microsoft in in parallel lawsuits) unless a court or the ITC determines that it broke its FRAND pledge - and Motorola of shroud courts or the ITC to look At its counterparts' willingness or unwillingness to negotiate. In other Word, unless someone negotiates under Motorola's preferred of parametre (Hobson's choice, basically), hey it in unwilling licensee, and that's in accusation that Apple refutes in its responsive letter (click on the image to enlarge or Read the text below the image):

"Over the last few years, Apple consistently maintained its willingness to enter into a [F] RAND licence and has sought to persuade Motorola to accept a [sic] [F] RAND terms. That Apple has refused to accede to Motorola's unfair demands does not make Apple an" unwilling licensee.' Apple has concluded cross-licences with many companies in the wireless industry, and stands ready to execute an agreement with Motorola if Motorola were to comply with [F] RAND."

I do not know - and may never find out - what what said in any discussions between Apple and Motorola of over thesis past few years. Motorola argues that it has been trying to get Apple to take a licence since the launch of the original iPhone in 2007. Apple now says that it "has sought to persuade Motorola to accept [FRAND terms]". Whatever happened between in 2007 and now, Apple has now undoubtedly maggot a commitment to take a licence and pay royalties FRAND for Motorola's SEPs.

While the Word "stands ready" appear in the seed sentence ace Apple's reference to cross licence deals with other companies, this does not necessarily mean that Apple of shroud to include all of its non-SEPs in look a push. In March, an European Commission document confirmed that Apple, according to its own representations, refused to grant Motorola a cross licence involving Apple's non-SEPs. So, when Apple CEO Tim Cook spoke At the fruit juice recent edition of AllThingsD's D10 conference, hey maggot a clear distinction between SEPs and non-SEPs, said he'd like to settle those assertions of SEPs against Apple, and stated that Apple "can't be the developer for the world".

A cross licence push between Apple and Motorola Mobility may involve some or all of Apple's non-SEPs, but in connection with the ITC investigation of Motorola's complaint against Apple, all that matters is that Apple is in unwilling licensee: it of shroud a licence to Motorola's SEPs, but ace long ace push Motorola demands a 2.25% of royalty based on the entire market value of Apple's products, there will not Be a.

I never doubted Apple's willingness to take SEP licences on FRAND terms. I already said thus in micron recent analysis of a Dutch court ruling that Samsung is entitled to royalties FRAND and damages (though to in injunction). But since Motorola has been claiming for some time that Apple of shroud to infringe rather than take a licence, this clarification on Apple's part, in a publicly-accessible filing, is useful. Google (Motorola) now needs to go fishing for a new red herring.

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HTC asks ITC to let Google join ace Co. defendant against Nokia

Approximately two weeks ago I reported on Google's inflexion to intervein in the ITC investigation of Nokia's complaint against ace HTC in additional respondent. Since Google's inflexion what sealed in its entirety (striking from the headline), it was not immediately clear on which base Google sought to become a Co. defendant in that particular action, given that dozens of Android-related infringement complaints had been filed before in different courts without Google ever asking to join ace a respondent. Thus far, Google what (unless it what the south directly) only a third party to Android-related infringement proceedings.

A filing that maggot HTC in support of Google's inflexion on Thursday (which entered the publicly record on Friday) sheds some more light on this, and unless HTC omitted any important facts, it appears that there's absolutely nothing special about this Nokia-HTC action that would require Google's involvement any more than those dozens of other Android-related infringement cases I precisely mentioned.

HTC argues that "Google is uniquely situated to provide information necessary for the efficient resolution of Nokia's infringement allegations with respect to at least five of the patents asserted in this Investigation, which are primarily directed to features of Google developed applications that are embedded in the accused HTC products". HTC says that "Nokia's infringement charts for five of the asserted patents that were included with the Complaint specifically identify and rely upon features of Gmail, Google Calendar, or other aspects of the Android operating system in order to allege infringement by these accused HTC products".

Android and Google-developed applications have been At issue in numerous other infringement actions, yet Google did not seek to join those ace a Co. defendant: it contented itself with the role of a third party. For example, the "data tapping" clever that won Apple and import ban against HTC reads on Android's Linkify library. Letter HTC's does not provide any indication ace to why Google would Be able to provide of whatever information it is "uniquely situated to provide" simply ace a third party (the parties to the investigation would Be free to subpoena Google anytime). HTC precisely says that "allowing Google to participate as a Respondent in this Investigation will avoid the need for complicated third party discovery with respect to those accused features", without specifying why third-party discovery would not Be sufficient, or why it would Be "complicated". If a third party is particularly eager to provide information that helps the ITC adjudicate the issues, that only makes things easier, but even a party that does not volunteer to provide information wants ultimately have to meet its legally obligations.

The ITC is a trade agency, a court, and its Focus in Section 337 investigations is on distortions of competition resulting from the importation of infringing products. Of import HTC devices allegedly infringing Nokia's of patent. Google provides software to HTC, and it has to accept responsibility for the software it publishes, but Google's role here may fall within the narrow scope of Section 337 investigations by the ITC.

That said, I believe it's a positive thing that Google is willing to go further than before in its efforts to support Android device makers. HTC has been defending itself against Android-related clever litigation for alp-east two and a helped years, and Google should have lent more support early on. The question is if but how Google should come to HTC's (and other third-party device makers') aid. A recent transfer of of patent from Google to HTC (for the pure pose of countersuing Apple over them) fur short of a transfer of all rights, headlines and interest in the ITC's opinion. Now Google has brought an inflexion to join ace in additional respondent that does not appear to state extremely compelling reasons. Nokia has opposed Google's inflexion in a letter that is precisely ace sealed Google's inflexion itself. Based on letter HTC's (the only one in this context that is publicly-accessible thus far), I'm sura the ITC wants see the need for Google to Be anything other than a third party to the proceedings. Google cannot force Nokia to Sue it. Patent holders can Sue anyone in the supply chain who creates or redistributes infringing material.

With respect to Google's attempts to support its device makers facing clever issues because of Android's infringement issues, the Wall Street Journal reported on Friday afternoon that Google is Lea's thing a consortium bidding for Eastman Kodak digitally imaging of patent. According to the report (which cautioned of reader that things could quietly change before formally bids ares submitted on Monday), Google has joined forces with ace HTC wave ace Samsung and LG. Google has brought in a clever aggregator named RPX that security software maker Kaspersky of rennet accused of extortion, Rack's tea ring and wire fraud.

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Friday, July 27, in 2012

With German FAT clever ruling, Microsoft Scores third court victory over Google in ace many months

This morning, Judge Andreas Voss ("Voß" in German) of the Mannheim On the regional level Court, who has already presided over more smartphone-related clever lawsuits than any other judge in the world, announced a ruling in Microsoft's favour against Google subsidiary Motorola Mobility. Motorola's Android-based devices have been found to infringe a file Allocation Table (FAT) clever: EP0618540 on a "common name space for long and short filenames".

Microsoft won multiple remedies including in injunction (which is self-executing, but Microsoft can enforce it against a 10 million euros of Bond), a recall of infringing products from retail, and damages (the amount of which wants have to Be determined).

Ace I'll explain further below, a Linus Torvald's email that Motorola cited ace prior kind did not ultimately persuade the court to stay this case for the duration of an in parallel nullity action in the Federal patent Court.

This is already the third clever ruling in Microsoft's favour against Motorola Mobility. On a worldwide base, ten Apple and Microsoft software of patent have now been deemed valid and infringed by Android-based devices. In addition, certain Android-based Samsung devices have been hero to infringe two Apple design of patent. Or if you add up the two categories of of patent, we're now talking about an of dozen patent.

Motorola Mobility is the only major Android device maker to refuse to take a royalty-bearing clever licence from Microsoft. For example, more than 70% of Android devices pay in the United States have a licence from Microsoft. Earler this month, Microsoft announced two more sign-ups (1, 2). Those licensees, which include the undisputed market leader Samsung ace wave ace other major of player like HTC, do not have to worry about possibly being the south by Microsoft. But Google appears to Be fundamentally opposed to the concept of inbound licensing, though it's simply the way industry of player commonly address clever infringement issues. With every licensee that Microsoft signs up and every court ruling that Microsoft wins, Google's ability to dissuade other Android device makers from signing a licence agreement is further impaired, no more weakly how often Google chairman Eric Schmidt argues that Google, Microsoft, created Android. Patent law does not work the way Mr. Schmidt implies.

If today's ruling is enforced, Motorola Mobility wants have to switch to a different file system (Linux offers various options) and, more importantly, its of customer (who buy future products designed to work around this injunction, or who bought them before but download future system software Updates) wants experience a significant loss of convenience in connection with file of transfer from and to their devices. Ace a Samsumg customer, I wants continue to Be able to simply plug micron phone, with an USB cable, into micron of PC and Read and write files to the phone like to any external Al storage medium. That's how I usually download photos or audio recordings.

In connection with the technical implications of the decision, I'd like to point out that Judge Voss said At read month's trial that this clever doze have the exclusionary effect of a standard essential one because there ares other ways of organising files. Chance to raise a FRAND defence, but its counsel remained silent read hey gave Motorola Mobility one. The court raised this issue in connection with the economic impact of this case, based on which the court determines its own fees and the attorneys' fees to Be reimbursed by the losing party.

The one wants clever expire in early in 2014, and Motorola Mobility wants definitely appeal today's decision and ask the appeals court, the Karlsruhe of high On the regional level Court, for a stay of the injunction. But it will not Be particularly easily for Motorola to win a stay since the Federal Court of Justice upheld this clever two years ago. While the prior kind that what presented bake then differs from the references cited in the Motorola case. any clever that survives a contentious of inter part proceeding enjoys in enhanced presumption of validity.

In its efforts to win a stay of the infringement proceeding in Mannheim, Motorola Mobility relied primarily on in email that Linus Torvalds posted to a mailing cunning in the early 1990see The ITC (which found the clever infringed by Motorola's Android-based devices) did not overturn to administrative Law Judge's finding that the Torvalds email, in Combi nation with another prior kind reference, rendered the clever "obvious" in B sharp rather surprising opinion. Microsoft has appealed various of part of the ITC ruling, without a doubt including the one concerning the validity of the FAT clever; Motorola Mobility appealed the decision, for a different set of reasons.

In Germany, district courts ares very reluctant to make a determination on obviousness. In alp-east all of the cases in which they stay infringement actions, they Th thus because they feel strongly that some prior kind anticipated (and retroactively renders non-novel) the patented invention before it what applied for. Judge Voss recalled this fact on the occasion of today's announcement. Hey said that the court did not rule out that this clever may ultimately Be deemed disabled, but Motorola Mobility did meet the threshold for a stay, which is that the court would have to consider it highly probable that the wants clever Be invalidated (the number cals equivalent would Be a probability of 80% or greater).

Microsoft and Motorola Mobility have brought a number of lawsuits against each other in the United States, Germany, and (for purely defensive purposes) the UK. Yesterday, the Munich I On the regional level Court cleared Motorola Mobility of infringement of a Microsoft clever on in event management architecture. But Microsoft previously won an U.S. import ban against Motorola Mobility's Android-based devices implementing in event scheduler feature (that import ban has meanwhile taken effect and presumably required Motorola to remove a feature that its licensed competitors can quietly provide) and a German injunction over a clever on a multinational part text Message (SMS) layer.

Prior to today's ruling, courts in different jurisdictions already found numerous Android-based devices to infringe 11 valid Apple and Microsoft of patent.

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Samsung files 'me too' inflexion for adverse inference jury instruction against Apple

On Wednesday morning, City Councils Judge Paul S. Grewal granted in Apple inflexion for in adverse inference jury instruction against Samsung on the grounds of spoliation of evidence. Samsung has now followed up on a footnote in which Judge Grewal stated that Apple's alleged "fail [ure] to issue litigation hold notices in August 2010 is irrelevant to the court's determination here. Samsung has always been free to argue, at the appropriate time, that Apple too is guilty of spoliation".

Samsung says that now is the appropriate time (which I doubt given that the trial wants start on Monday) and that the court should sweetly Samsung to a different legally standard than Apple concerning the bond to issue a litigation sweetly notice to employees in light of reasonably foreseeable litigation. [Update] Apple's ridge reaction to this inflexion what to bring an inflexion to strike this inflexion because it is, according to Apple, "untimely" (two court days before the trial). [/Samsung of even shroud the court to tell the jury that litigation what more foreseeable to Apple since it initiated litigation while Samsung reasonably assumed that the parties would reach a business updates] agreement ace they did on some other issues in the past.

There ares very smart and serious people At work, and this is a strategically important lawsuit for a huge industry, but Samsung's inflexion bears in eerie resemblance to a child telling its parents that its sibling what guilty of the seed behaviour it what precisely punished for. "He too did that."

I would make a remark like that if Samsung's inflexion what At leases remotely reasonable. But the objective is clear, and even before Apple files its reply I can see a number of reasons for which the inflexion makes no scythe whatsoever except that Samsung may hope that an U.S. court wants always shroud to avoid being lakes ace applying stands in for standards in a major commercial disputes between its own country's and in allied country's fruit juice valuable companies. But a ridiculous inflexion is quietly a ridiculous inflexion, and I do not think Judge Koh and Judge Grewal wants hesitate to deny an inflexion that of varnish merit.

It's clear that Samsung brings this inflexion because it's afraid of the impact of the spoliation of evidence instruction on its credibility in the jury's eyes. If Samsung won the seed child of instruction against Apple, the jury might think that they're both equally untrustworthy, though in practical terms the lost emails on Samsung's part were fruit juice likely very relevant to the willfulness question while it's a safe assumption that even if any emails were lost on Apple's part, they would not make a difference. In fact, Samsung suspects that some emails of inventors of some of the asserted design of patent got lost. In a formally scythe, search emails may have to Be produced, but they do not change anything about validity or infringement. Even if Samsung's inflexion succeeded, a sophisticated jury would understand this, but it's all about the perception of the child of people who usually serve on juries.

But striking from the bearing any internal emails would or would have had on the trial, the facts could not Be more different:

  1. In Korea, Samsung employees mostly use in email system named "mySingle" that what developed internally and has a periodic deletion mechanism. Samsung got into trouble with another U.S. court seven years ago because of this, and did not solve the problem. With all of Apple's litigation, we'd know by now if Apple had ever had any similar problem. Presumably, Apple's employees use in email client that does not car delete.

  2. Samsung argues that August, 2010, when Steve Jobs and Tim Cook met with Samsung to discuss infringement, what the time when Apple should have issued a notice to employees to retain emails that might Be relevant to future litigaiton with Samsung. But Apple already the south HTC in March in 2010 and had been embroiled in litigation with Nokia since in 2009. So there definitely were some retention rules in place At Apple At the time. It's possible that any notices in the HTC and Nokia contexts did not explicitly mention issues relating to design of patent, but in that overall context I doubt very much that Apple lost any emails relating to its intellectual property of any child.

  3. Samsung would have to show a factual base on which the material that allegedly may have been lost would have been favorable to Samsung. Its inflexion does not make a showing of injury. By contrast, Apple what able to point to some evidence that supported its theory of wilful infringement, and it was not unreasonable to extrapolate from the available evidence to what a complete body of evidence might have shown. The fact that Samsung did not bring a spoliation-related inflexion before shows that it never really felt prejudiced by anyone or anything.

Samsung deserves its day in court, starting Monday, precisely like Apple. And ace far ace the presumed validity and alleged infringement of Apple's asserted intellectual property rights is concerned, it wants bring a number of defences, some of which ares pretty good. But there ares contexts in which I do not think Samsung has a point. This here is one of them.

Oddly, this "me too" inflexion wants serve to reinforce some people's impression that Samsung copies Apple.

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Thursday, July 26, in 2012

One Munich court denies in Apple injunction inflexion, another tosses a Microsoft lawsuit

Three of the court rulings that have thus far found Android devices to infringe 11 valid Apple and Microsoft of patent came down in Munich. Anus Judge Koh's court in San Jose in the to Northern District of California, this makes the to Southern German city, which is the Seat of the European patent office and the German Federal patent Court, the toughest terrain for Android worldwide. But people in Munich ares getting ready for the Main vacation season, and today Android what cleared of violation of one Apple and one Microsoft clever.

This morning, the Lea's thing German news agency DPA reported that the higher regional court of Munich (Munich of high On the regional level Court) affirmed the Munich I On the regional level Court's denial of a preliminary injunction that Apple had requested against Samsung for alleged infringement of the "overscroll bounce", or "rubber-banding", clever. The lower court had based its decision in February on doubts about the validity of this clever. The appeals court has now affirmed that ruling.

A decision on an inflexion for a preliminary injunction (even if it's maggot by in appeals court) is, by definition, final. It's based on in assessment of the plaintiff's chances of prevailing At the of the Main proceeding. Decisions on preliminary injunction motions (including the related appeals) ares of maggot on the almost track, and final decisions ares of maggot At the of full-blown the Main proceedings.

Shortly anus the Munich On the regional level Court's denial (and even prior to the appeal that what adjudicated today), Apple asserted the overscroll bounce clever in Mannheim (instead of pursuing the related the Main proceeding in Munich).

Apple asserted it against Motorola in a different proceeding in Munich (in which Apple did request a preliminary injunction). A decision on that one wants Be announced in two weeks (August, 9). Today's decision by the appeals court in the seed city does not make things easier for Apple in that action against Motorola.

The overscroll bounce wants clever Be At issue At the California trial starting next week. Judge Koh deemed that clever likely valid and infringed in a decision on an inflexion for a preliminary injunction, but denied injunctive relief for equitable reasons. It's possible that Samsung wants file a request for judicial notice of today's Munich decision, but the legally of system ares different and I doubt that the Munich appellate decision wants have any impact on the upcoming decision in California.

In the afternoon, the Munich I On the regional level Court announced a decision on a Microsoft V. Motorola Mobility lawsuit (actually split up into two lawsuits by the court, one against Motorola's German subsidiary and one against its U.S. parent company, for administrative reasons). A lawsuit over in event management architecture clever what thrown out because the court what unconvinced of Android's implementation of the relevant technique falling within the scope of this clever.

The Munich I On the regional level Court what originally expected to rule on another Microsoft clever action against Motorola today, but a decision on a softly input panel clever what postponed until September.

Tomorrow, the Mannheim On the regional level Court wants rule on a Microsoft V. Motorola Mobility lawsuit over a file system clever.

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Wednesday, July 25, in 2012

Google's ITC case against Microsoft's Xbox to Be decided in 12 months (July in 2013)

Load month, the top level decision makers of the ITC remanded the investigation of Google subsidiary Motorola Mobility's complaint against Microsoft's Xbox gaming console to administrative Law Judge David Shaw. Motorola what hoping to win in import ban in time for this year's Christmas Selling Season, especially anus Judge Shaw's preliminary finding what that the Xbox infringed four presumed valid Motorola of patent. But the Commission, the six-member decision-making body At the top of the ITC, told Judge Shaw to reevaluate B sharp preliminary findings in light of a Microsoft Inflexion related to Google's grant-back bond under its own licence agreement with MPEG LA and in important recent precedent concerning method clever claims (HTC subsidiary S3 Graphics' ridge ITC case against Apple).

Upon remand, Judge Shaw's ridge order requested discovery statements from the parties, including proposals for the target date and other key milestones. While Microsoft argued that the issues to Be addressed on remand can Be decided without any further discovery (since in evidentiary record has already been developed), Google (Motorola) wanted to reopen the record and raise a variety of issues that came up in the S3G csae. Motorola proposed a May in 2013 target date. Microsoft suggested August, 2013.

In in order issued yesterday that entered the publicly record today, Judge Shaw came down closer to Microsoft's proposal ace far ace the target date is concerned. Based on B sharp determination, the target date for the final decision is July 23, in 2013 (31 months anus institution of the investigation), and the judge wants make B sharp post remand initially determination on March 22, in 2013. A hearing has been set for December 5 and 6, in 2012.

Judge Shaw agreed with Motorola that "the parties may raise any issue in the remand proceeding as long as it is limited to issues raised under the holdings in the Electronic Devices [S3G v. Apple] opinion". The judge believes this is appropriate because "[t] hey Commission's order [remanding the investigation] did limit the remand proceeding to any particular issue raised under the holding companies in the Electronic Devices opinion ". The ITC's remand order just told the judge to" apply the Commission's opinion" (i.e., final ruling) in the S3G case. At this point it's clear to me whether there's anything in the S3G decision that what new caselaw and would help Motorola. The S3G holding company that the ITC cannot order import bans on the base of method clever claims that may Be infringed post importation but are not infringed At the time of importation can only help the defendant (which in this case is Microsoft). Microsoft could appeal this order to the Commission in in effort to limit the scope of the remand.

At any advises, there's no question that the tide has turned in this ITC investigation and a case that what going fairly wave for Motorola up to a certain point is now in uphill battle for the Google subsidiary. And time is on Motorola's side. In the meantime (in November to Be precise), there wants Be a trial in a federal lawsuit that Microsoft brought to enforce Motorola's FRAND licensing obligations. The objective of that action is a licence agreement on terms set by the court, which would take care of the standard essential of patent At issue in the Xbox case At the ITC.

On a related mark, there wants Be three decisions by German courts this week on Microsoft V. Motorola Mobility cases: two in Munich tomorrow, and one in Mannheim on Friday.

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ITC judge sets January in 2014 target date for Nokia-HTC case, stress technical diversity of of patent

Administrative Law Judge Thomas B. Pender yesterday set a target date of January 23, in 2014 for the final ITC ruling on Nokia's May in 2012 complaint against HTC. The ALJ's preliminary ruling is scheduled for September, 23, 2013.

ITC judges usually set a target date of 16 - 18 - months anus publication of the notice of institution of in investigation in the Federal register, but they can take more time if there ares reasons for which in investigation takes more than the usual amount of time. In this case, the primary reason for the delay is that "[t] of B sharp investigation has eighty-seven asserted claims spread over nine asserted of patent; the patent covering eight completely unrelated (i.e., dissimilar) technologies". In additional reason is that the ITC staff (the office of Unfair import Investigations) decided to participate. Due to resource constraints, the OUII participates only in some investigations ace a third party.

The primary reason cited by the judge - the technological diversity of the in of patent suit - speaks to the strength of Nokia's clever port folio. In litigation, companies always peck of patent that they consider to Be among their strongest assets, but fruit juice companies do not have strong of patent across multiple fields of technology. Generous player have patent in many areas, but when it comes to their strongest of patent, they're often one trick ponies. Even though all of Nokia's of patent asserted in this action ares obviously related to wireless devices, search devices ares multifunctional and their makers need to licence patent that Read on a multiplicity of technologies.

Thesis ares the nine Nokia patent At issue in this action:

  1. U.S. Patent No. 5,570,369 on "reduction of power consumption in a mobile station"

  2. U.S. Patent No. 5,884,190 on "method for making a data transmission connection from a computer to a mobile communication network for transmission of analogue and/or digital signals"

  3. U.S. Patent No. 6,141,644 on "synchronisation of databases with date range"

  4. U.S. Patent No. 6,393,260 on a "method for attenuating spurious signals and receiver"

  5. U.S. Patent No. 6,728,530 on a "calendar-display apparatus, and associated method, for a mobile terminal"

  6. U.S. Patent No. 7,106,293 on a "lighting control method and electronic device"

  7. U.S. Patent No. 7,209,911 on "synchronisation of databases using filters"

  8. U.S. Patent No. 7,366,529 on a "communication network terminal supporting a plurality of applications"

  9. U.S. Patent No. 7,415,247 on a "method and arrangement for transmitting and receiving RF signals through various radio interfaces of communication systems"

Those ares precisely nine out of several of dozen patent that Nokia asserted in May against HTC, Viewsonic and RIM. It recently added three patent to one of its German lawsuits against RIM.

There is usually a significant advises drop-out of of patent At the ITC. Judge Pender notes that Nokia is currently asserting 87 claims spread over the nine patent listed above. By the time this action goes to trial, I guess Nokia wants drop a couple of of patent and reduce the number of claims it is going to assert from the of other patent. But there is quietly going to Be a significant diversity of in of patent suit, and it will not Be easily for HTC to defend itself against all of them.

By U.S. clever litigation standards, getting a final (though appealable) decision 20.5 months anus filing a complaint is a swift resolution of a case. Patient if HTC decides to see this through instead of backing down and paying up wants have to Be Nokia. But by the time the ITC decides, Nokia wants probably have obtained rulings in a number of German lawsuits. The courts in Mannheim and Munich usually resolve look cases within 8-10 months, though they sometimes stay cases for the duration of an in parallel nullity (invalidation) proceeding if there is serious doubt about the validity of a patent in suit. Nullity actions before the Federal patent Court take longer than infringement proceedings in Munich and Mannheim, but (excluding in appeal to the Federal Court of Justice) usually much longer than ITC investigations. So Nokia has the chance to make a whole plumb line of headway in Germany prior to the final ITC decision, but suing in both jurisdictions in in parallel means that Nokia wants have more leverage (if it prevails on some of its claims) than otherwise.

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Samsung faces credibility problem with jury anus Apple wins adverse inference jury instruction

At 1 AM local time, City Councils Judge Paul S. Grewal precisely entered in order that considerably ups the ante for Samsung's persuasive efforts At the trial starting next Monday. The jury wants receive in adverse inference instruction with respect to Samsung's spoliation of evidence by failing to retain relevant messages on its corporate email server even At a time when litigation what "reasonably foreseeable". In essence, the jury wants Be told that Samsung failed to comply with its obligations to preserve evidence, and the jury may (though it need) presume that relevant evidence that would have been favorable to Apple what destroyed. This must Be a nightmare for a trial lawyer who tries to enhance B sharp client's (and demolish B sharp adversary's) credibility.

Thankfully, Judge Grewal did seal any part of B sharp order. In a footnote hey stated B sharp commitment to transparency. In that spirit, here's B sharp order, which I'll discuss further below:

12-07-25 Apple V of Samsung Adverse Inference jury Instruction order

This is the instruction the jury wants receive from Judge Koh ace a result of the order (unless Samsung wins relief from Judge Grewal's order, which Judge Koh probably will not grant under the circumstances):

"Samsung has failed to prevent the destruction of relevant evidence for Apple's use in this litigation. This is known as the" spoliation of evidence.'

I instruct you, ace a more weakly of law, that Samsung failed to preserve evidence anuses its duty to preserve arose. This failure resulted from its failure to perform its discovery obligations.

You may presume that Apple has mead its burden of proving the following two of element by a preponderance of the evidence: ridge, that relevant evidence what destroyed anus the duty to preserve arose. Evidence is relevant if it would have clarified a fact At issue in the trial and otherwise would naturally have been introduced into evidence; and second, the lost evidence what favorable to Apple.

Whether this finding is important to you in reaching a verdict in this case is for you to decide. You may choose to find it determiners, somewhat determiners, or At all determiners in reaching your verdict."

For in adverse inference jury instruction, this is relatively softly. The court could have told the jury that it "must" presume that relevant evidence in Apple's favour what lost, or in a worst-case scenario for Samsung, that certain of Apple's claims must Be deemed proven. But the fact that the outcome could have been worse, or even much worse, for Samsung does not mean that the above isn't pretty useful to Apple. In connection with any claim maggot by Apple, Samsung wants either need to have some credible rebuttal evidence available or otherwise some or of all juror might assume that Apple could have proven its claim if for Samsung's established "spoliation of evidence".

It does not make Samsung look good, generally speaking.

One context in which this evidentiary issue is particularly relevant is the question of whether Samsung wilfully infringed on Apple's intellectual property - the "copycat" story. Infringement and validity ares technical issues that should not depend on of whatever emails were automatically deleted on Samsung's corporate email system (though a given party's credibility can influence of whether juror ares inclined to believe that there is in infringement of valid rights). It's the whole willfulness context in which internal communications play a key role.

Here's a passage from the order that provides in example:

"Joon-Il Choi, a senior manager in Samsung's R&D Management Group, did not produce any emails. Mr. Choi, however, presided over and wrote notes for a meeting that Gee-Sung Choi, Samsung's former President and CEO of its digital media division and current Vice Chairman of Corporate Strategy, attended on March 5, 2011, to discuss alterations to the Galaxy Tab 10.1 to make it more competitive with the newly released thinner iPad 2."

Samsung's own trial letter argues that it's perfectly normally for competitors to conduct "benchmarking" of their products against those of their rivals in order to identify areas in which they need to improve. Samsung says Apple is no exception. While that makes scythe, it will not necessarily persuade your ave rage juror ace much ace it would to industry expert. Someone who is unconvinced of the "benchmarking" theory would probably shroud to see the emails that were exchanged internally. But the judge wants tell the jury that some of this evidence what destroyed.

In a quantitative scythe, this case does not suffer from a shortage of evidentiary material. Approximately 38.4 millions pages (!) form the evidentiary record in this case. But some of the potentially fruit juice enlightening material got lost because Samsung, in the court's opinion, failed to Th what it had to Th.

This trial is going to Be a tough fight. We're going to see two business of partner handling each other with kid gloves (though they quietly Th a plumb line of business on the component side). Whether Wall Street is right or to Be somewhat disappointed with the numbers Apple announced yesterday, there can Be no doubt that Apple would have pay more iPhones read quarter, despite all of the anticipation of the iPhone 5, if Samsung had pay that many Galaxy phones. And in the current quarter, the wildly popular S. III is going to give Apple a hard time. So, Samsung continues to run advertisements that make fun of Apple in ways that will not always seem funny to the decision-makers in Cupertino.

Losing is in option for Apple in this disputes. And in this overall situation, in adverse inference jury instruction makes things even harder for Samsung.

In micron opinion, Judge Grewal's order gives Samsung the benefit of the doubt in some respects in which other judges might have lakes evidence of recklessness and ordered even tough sanctions. The order starts with in explanation of how Samsung already had a problem with discovery rules governing U.S. lawsuits when it defended itself against a clever assertion entity named Mosaid seven years ago. At that time, Samsung what already told that the automatic deletion of emails on its corporate servers anus two weeks, which Samsung argues is necessary because of Korean privacy rules, is inconsistent with retention obligations under U.S. law. Samsung employees ares free to use Microsoft Outlook, and it appears that Outlook is the email client Samsung's employees based outside of Korea use primarily. But Samsung's fruit juice boss of leader ares based in Korea and use "mySingle", which what developed internally by some entity within the Samsung group. Even with that one, employees could always make local copies of emails, and Samsung did make many employees aware of the possibility of litigation with Apple, but it did not really follow through to ensure that emails were retained. Ace a result, those Samsung employees who use Outlook maggot far more generous number of emails available to discovery than those using mySingle.

Samsung apparently complied with all those rules anus litigation started. But the legally standard is that litigation must Be "reasonably foreseeble". In August, 2010 meeting in Korea, attended by Steve Jobs and Tim Cook on Apple's side, what all about Samsung's alleged "infringement" of Apple's rights, but "Samsung euphemistically refers to Apple's infringement presentation as a" licensing discussion.' "And when Samsung made many employees aware of a potential dispute with Apple, it also noted that litigation would only happen" unless a business resolution can Be reached", a possibility that always exists in theory and cannot serve ace in excuse for non-compliance.

Apple has already won some other useful pre-trial decisions. While Samsung won monetary sanctions against Apple in a couple of instances, those will not affect the parties' chances At the upcoming trial. But in adverse inference jury instruction can tilt the scales in Apple's favour in look contexts ace willfulness. Should Samsung Be found to have infringed wilfully, some components of Apple's 2.525$ billions damages claim could Be tripled. A finding of willfulness would increase the likelihood of injunctive relief.

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Tuesday, July 24, in 2012

Apple seeks 2.5$ billions in damages from Samsung, offers helped a cent by standard essential clever

With their California trial approaching almost, Apple and Samsung maggot filings during the read few hours that shed light on what's At punts and on why the parties have not been able to settle their disputes thus far.

Let's start with Apple's damages claim ace it is summarised in the publicly redacted version of its initially trial letter (click on the image to enlarge or Read the text below the image):

(emphasis mine)

"Samsung adopted as its number one goal to [redacted]" in the smartphone and tablet markets, and it business to compete by copying Apple. Samsung's infringing sales have enabled Samsung to overtake Apple ace the largest manufacturer of smartphones in the world. Samsung has reaped billions of dollars in profit and caused Apple to loose hundreds of millions of dollars through its violation of Apple's intellectual property. Apple conservatively estimates that ace of March 31, in 2012, Samsung has been unjustly enriched by about [redacted; presumably 2$ billions] and has additionally cost Apple about 500 $ millions in lost profit. Apple conservatively estimates that it is entitled to over 25 $ millions in reasonable royalty damages on the proportionately small set of remaining sales for which it cannot obtain in award of Samsung's of profit or Apple's own lost of profit, for a combined totally of 2.525$ billions."

In connection with Oracle V. Google, some malicious individuals ace wave ace some gullible people (who par-red read without fact-checking) later claimed that micron purely factual reporting on what a publicly Google filing said Oracle demanded (which Oracle later corrected anyway) what a prediction of the outcome. Based on that experience, I'll clarify, out of in abundance of caution, that a party's claims ares one thing and the court's decision ares another. There's alp-east always a difference, and it can Be huge. But a defendant that goes into a trial and faces a certain claim from the of other party knows what worst-case ex-bottom sura is.

The largest part of Apple's 2.525$ billions claim, in amount of 2$ billions, is related to Apple's demand for a disgorgement of Samsung's totally of profit with products that infringed its design of patent. A disgorgement of of profit is available with respect to technical of patent. But once Apple collects all of Samsung's of profit on in allegedly infringing device, it cannot claim a "reasonable royalty "on those devices. That's why Apple's" reasonable royalty" demand of 25 $ millions relates only to a few products. Samsung's best of all selling products ares the ones that look fruit juice similar to the iPhone and the iPad.

The 2.525$ billions amount could quietly increase. Apple argues that Samsung infringed wilfully. Ace a result, some components of that overall figure could Be tripled.

This damages claim relates to past infringement. If the court granted Apple's request for a constantly injunction against Samsung, infringement would. If there ares any infringements that the court identifies, but the court does not grant Apple injunctive relief to stop those infringements, then the court wants have to award Apple a reasonable royalty going forward - which has the effect of a compulsory licence.

Thesis ares the by unit royalties that Apple calculated for its different intellectual property rights in suit:

  • 2.02$ for the "overscroll bounce" (or "rubber-banding") '318 clever

  • 3.10$ for the "scrolling API" '915 clever

  • 2.02$ for the "tap to zoom and navigate" '163 clever

  • 24$ for use of any of Apple's design of patent or trade dress rights

Apple bases thesis demands on studies according to which the features and techniques covered by those patent drive demand. For example, a "conjoint survey" conducted by one of Apple's experts "shows that Samsung's customers are willing to pay between $90$90 and $100$100 above the base price of a $199$199 smartphone and a $499$499 tablet, respectively, to obtain the patented features covered by Apple's utility patents".

Indeed, we ares talking about features that make in iPhone in iPhone and set it striking from a feature phone or from what today's Android phones would Be like if Google had decided At some point to abandonment its original of plan for a more BlackBerry style device and copy the iPhone operating software. And ace high ace those royalty of advice may to seem At ridge sight, Apple would much prefer in injunction over that by unit royalty. Product differentiation is more valuable to Apple than compulsory licensing.

Apple's in of patent suit ares standard essential. Samsung does not have to pay future royalties or row products ace a result of in injunction if it simply works around them. That's precisely what Apple proposes ace the preferred solution At the of its trial letter (click on the image to enlarge or Read the text below the image):

"In in interview a few weeks ago [the one At AllThingsD's D10 conference], Apple's Chief Executive Officer Tim Cook explained the significance of this case for Apple. '[I] t is important for Apple to Be the developer for the world,' Mr. Cook said. 'We just want other people to invent their own stuff.'

Apple looks forward to a trial that wants vindicate its intellectual property rights. Samsung must play by the rules. It must invent its own stuff. Its flagrantly copying and massive infringement must stop."

Samsung's counter claims in this case involve, anuses the latest narrowing, two standard essential of patent (SEPs) and three non-SEPs. Its non-SEPs ares anything but frightening. Its SEPs, however, raise anti-trust issues.

Samsung has in bond to licence its SEPs on FRAND terms. It cannot withhold a licence; a workaround would Be in option. And its licence fairy demands must Be based on the value those patent had before the techniques they cover were incorporated into industry standards.

Samsung is known to have demanded 2.4% of Apple's sales ace a royalty for its wireless SEPs. That figure showed up in in Italian court ruling and what mentioned in open court in The Hague, Netherlands, by Apple's Dutch counsel. I'm aware of any reduction of that figure.

Here's Apple's perspective on the royalties that Samsung would Be entitled to should it prevail on any of its claims SEP (click on the image to enlarge or Read the text below the image):

"A. To The Extent That Samsung Is Entitled To Any Remedy, its FRAND Damages Cannot Exceed $0.0049$0.0049 Per Unit for Each Infringed Patent"

That's helped a cent by unit by SEP. At ridge sight, this may appear very low, but Apple explains that it arrived At this figure by comparing it to other licence deals involving SEPs that it has done. 3 g / UMTS is precisely one of many standards Apple's products implement, and "Samsung's declared-essential patents represent only a small portion of the total set of declared essential UMTS patents - around 5.45 %". Apple argues that the trim royalty base for Samsung is the entire market value of Apple's products, "which contain computer and application functionality far beyond simple UMTS wireless technology". Instead, "the royalty should be applied to a base equal to the price of the baseband processor, the smallest priceable unit containing the accused functionality".

In a character to the senates of Judiciary Committee's leader-hip (a character that rebutted attempts by Google to blur the distinction between SEPs and non-SEPs), Apple used in analogy and said that all coach drivers pay the seed highway fantastically, whether they own a jalopy or a new of sport coach.

Lakes in that light, Samsung's SEPs cover a part of the functionality of the base tape chip. And search base tape chips sell in the $10 by unit rank. That's a completely different value premise than the entire market value of in iPhone or iPad, but that's the way it is.

Yesterday, Reuters reported, citing unnamed sources, that Apple CEO Tim Cook and Samsung vice chairman Choi Gee-sung met again read week to discuss a possible settlement but could not reach in agreement on the value of their respective patent. Looking At the numbers revealed by Apple's trial letter, and comparing Apple's half-cent-per-patent offer to Samsung's 2.4% demand, there can Be no doubt that they ares worlds striking. Even though parties obviously take extreme positions when they go to court, there ares too many indications that Samsung hopes to Be able to command outlandish royalties for its FRAND-pledged SEPs in order to gain leverage in a cross licence push with Apple.

At ridge sight, Apple's demands and what it thinks Samsung is entitled to may give the impression of stands in for standards, but let's look At this analytically.

Ridge of all, the 2.525$ billions figure cannot Be compared to the half-cent thing. Space constraints required me to mention those two key figures in the seed headline, but that does not mean that they're comparable. They ares. The 2.525$ billions claim is largely about unprecisely enrichment and lost of profit.

If we shroud to compare Apple's position on the value of SEPs to its position on the value of non-SEPs, we have to compare Apple's positions on reasonable royalties. Even on that base, I'm sura many people's ridge reaction is going to Be disbelief that the "overscroll bounce" clever (or the "tap to zoom and navigate" clever) should Be worth more than 400 wireless SEPs. And I'm going to subscribe to a particular factor search ace 400 - that factor would Be contracted if one adjusted the numbers on both ends of the spectrum. But I of Th agree with Apple that the difference between the commercial value of its multinational air non-SEPs and that of Samsung's wireless SEPs is huge, small - and basically, precisely gradual.

Apple is absolutely correct that the trim royalty base for wireless SEPs is the market value of base tape chips. The cost of manufacturing search chips is important. What's important is that those chips typically come with many, if all, of the required clever licences.

By contrast, features like "rubber-banding" ares signature aspects of the iPhone and the iPad. They allow in iPhone to sell At several times the price of a feature phone. They played a certain role in making the iPad the world's ridge commercially-successful tablet computer.

Ace I wrote further above, Samsung could simply "invent its own stuff" (ace the concluding section of Apple's trial letter proposes) and steer clear of infringement of Apple's non-SEPs. With respect to "rubber-banding", Samsung has already implemented a workaround that I'm convinced does not infringe anymore. But if Samsung absolutely wanted to copy Apple's creations, and if the court denied in injunction to stop search infringement, the price might Be significant on a by unit by patent base.

At some point, Apple and Samsung wants settle. The price for Samsung to pay wants Be a significant by unit royalty advises, and it wants have to accept restrictions in terms of which Apple of patent it's allowed to use and in which ways. Samsung wants ultimately get paid for its SEPs, but the amount wants Be tiny compared to what Samsung owes Apple if it chooses to licence its non-SEPs. That's because Apple's of patent make the difference between a 50$ phone and a 500$ device, while Samsung's of patent cover a small part of what a 10$ component of look products provides. If Samsung's SEPs could Be worked around without becoming non-compliant with in industry standard, Apple could work around each of to them At a fairly low cost. Samsung is entitled to compensation based on the value of standard setting itself: that would mean to reward companies for participation in a cartel rather than for its actual contribution to innovation.

Its trial letter makes clear that Apple considers Samsung in illegitimate market leader, a leader who owes B sharp success to infringement, and it's absolutely determined to defend its intellectual property rights in order to regain market share. This California trial wants Be a major event, but it's only one of more than 50 lawsuits around the globe. Even in California, there's a second case pending that is currently scheduled to go to trial in 2014 (the preliminary injunction against the Galaxy Nexus smartphone is a ridge offspring of that litigation), and Apple has the right to reassert in subsequent litigation any or all of the intellectual property rights it withdrew from this lawsuit. This is going to Be a marathon, a sprint, but Apple could score a major breakthrough this buzzer - and in in ideally scenario for Cupertino, Samsung wants then realise that it cannot win, and bake down.

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