Showing posts with label FRAND. Show all posts
Showing posts with label FRAND. Show all posts

27 June 2014

Samsung Can Enforce FRAND-Committed Patents in Japan

Tokyo High Court BuildingIn a dispute between Apple and Samsung, the Japanese Intellectual Property High Court has ruled that damages may be awarded for infringement of a standard-essential patent (SEP) which is subject to a commitment to licence on fair, reasonable and non-discriminatory (FRAND) terms, and that this is not an abuse of the patent if the amount claimed is within the licence fee.

The following report of this recent Japanese ruling in the long-running global dispute between Apple and Samsung has been provided by Daisuke Miyamura of the Ohtsuki Patent and Trademark Law Firm, which is based in Osaka. 

Overview

A series of lawsuits regarding smart phones are being fought between Apple and Samsung all over the world.  In Japan, Apple has filed suits against Samsung four times, and Samsung has filed suits against Apple three times.  On 16 May 2014, the Grand Bench of the Intellectual Property High Court handed down its decision in one of these cases, on an appeal by Samsung against the decision of the lower court granting declaratory judgment in favour of Apple. 

Apple had originally argued that its acts, such as production, transfer and import of products did not constitute infringement of Samsung’s Japanese patent no. 4642898, and demanded declaratory judgment ruling that Samsung had no right to an award of damages based on infringement of the patent right.

The original court decision concluded that some of Apple’s products were included in the scope of the present patent.  However the original court also determined that enforcement of an award of damages based on the Samsung patent was the abuse of the right, and granted all of Apple’s requests for declaratory judgment.

Samsung appealed against the original court decision.

The Grand Bench of the Intellectual Property High Court has now ruled that enforcement of the right to damages based on the Samsung patent is an abuse of the right if the compensation exceeds the licence fee based on the FRAND obligation, but is not an abuse of the right if the compensation is within the license fee based on the FRAND obligation.

18 November 2013

What’s Up Down Under With Apple and Samsung?

Smart devicesLast week, the Federal Court of Australia quietly published a further interim judgment in the ongoing litigation between Apple and Samsung.  Samsung Electronics Co. Limited v Apple Inc. [2013] FCA 1142 was officially decided in 4 November 2013, however publication was delayed to give the parties an opportunity to review the judgment and request that any confidential information be redacted. 

The new judgment is, I am afraid, not very exciting reading, particularly for the lay-person.  It is a decision on the rather dry subject of whether or not Samsung should be allowed to submit further evidence relating to ongoing negotiations conducted with Apple since the commencement of the litigation.  Any content in the judgment which would have made for interesting reading – such as, for example, the terms of proposed licensing arrangements between Apple and Samsung – has been blacked out.

The answer that the court gave to Samsung, incidentally, is ‘no’.  Samsung has already filed an application for leave to appeal the decision, and a hearing on this application will take place on 21 November 2013.

However, this seems as good an opportunity as any to review the history of the Australian Apple/Samsung litigation, and provide an update on its current status. 

As matters stand right now, it does not seem likely that any judgments will be handed down on substantive issues, such as whether Samsung or Apple infringe any of each other’s patents, or whether those patents are valid, until at least the first half of 2014.  In one of the ongoing matters (to which the latest interim decision relates) there are hearing dates set down for a further 41 days, extending into April next year.  Any judgments that are issued will almost certainly be appealed by at least one of the parties, meaning that any final determination in any of the cases is unlikely until at least the second half of 2014, and possibly not until 2015.

It is worth bearing in mind that all of these cases relate to products which are already superseded.  Indeed, some of the allegedly infringing products – such as Samsung’s original Galaxy Tab 10.1, and Apple’s iPhone 3GS – are now two or more generations old.  And, contrary to what you may read in some sections of the media, no ruling in these cases will extend to newer products merely because they appear to include similar features.  A patentee always bears the burden of proving that infringement is occurring.  A court will not ‘infer’ infringement based on a different product, no matter how similar the two may appear.

Which leaves me wondering still, as I have done before, what exactly is the purpose of all this litigation – in Australia and elsewhere – and why do Apple and Samsung seem unable to reach any kind of workable settlement?

23 October 2013

Samsung’s European Proposal – Fair, Foul or Foolhardy?

EU LogoIt has been widely reported in the past few days that Samsung has made a proposal to the European Commission (EC) in the hope of avoiding a fine of up to $18.3 billion, following an EC investigation into the Korean company’s use of its standard-essential patents (SEPs) in ongoing litigation, particularly against Apple.

The EC opened the proceedings in January of 2012, based on Samsung’s applications for injunctive relief in various European countries against ‘competing mobile device makers’ (i.e. Apple).  While Apple has principally asserted non-standards-related patents, Samsung’s defensive strategy has been based substantially on alleged infringements of patents which it has declared as being essential to implement global mobile telephony standards.  The EC was concerned, in particular, that Samsung may have failed to honour its commitment to license any SEPs on fair, reasonable and non-discriminatory (FRAND) terms, and that such behaviour might amount to abuse of a dominant position.

Samsung is right to be concerned about the consequences of an adverse finding by the EC, which can levy fines of up to 10% of a company’s global turnover during the year preceding an investigation.  In 2004, for example, Microsoft was fined €497 million (US$794 million) over licensing, interoperability and software bundling practices.  In 2008, Microsoft was ordered to pay an additional €899 million (US$1.44 billion) for failure to comply with the 2004 decision.  And in 2009, the EC fined Intel €1.06 billion ($1.45 billion) for anti-competitive behaviour.  Samsung’s global turnover during 2011 was over $180 billion!

Samsung’s proposal has been published by the EC, which is seeking comments from ‘interested parties’.  The proposed commitment is simple enough.  As summarised in the EC press release:

Samsung has proposed to commit for a period of five years not to seek any injunctions on the basis of any of its SEPs, present and future, that relate to technologies implemented in smartphones and tablets ("Mobile SEPs") against any company that agrees to a particular licensing framework.

The licensing framework consists of: (i) a negotiation period of up to 12 months and (ii) if no agreement is reached, a third party determination of FRAND terms by either a court or an arbitrator, as agreed by the parties. If the parties cannot agree on either submitting to court or arbitration, the parties will have to submit to arbitration.

Personally, I think that this is a pretty fair compromise.  Certainly it lies somewhere between the two more extreme views expressed by IAM Magazine (that denying Samsung the ability to obtain injunctions will actually harm, rather than benefit, consumers) and by FOSS Patents’ Florian Müller (that ‘Samsung's proposals would make things worse, not better, and they would increase, not decrease, legal uncertainty’).  I do not agree with either of these positions.

19 May 2013

There Ain’t No Such Thing as a Free Video Codec

Motion picturesGoogle, Inc recently achieved something that perhaps no other company or organisation on the planet could have done – it secured an agreement from most of the major corporate owners of patents relating to digital video coding standards, which will enable developers and users to access digital video on the web without payment of patent royalties.

At least, this is what will happen if the World Wide Web Consortium (W3C) takes up the opportunity that Google has created.  However, Google’s recent publication of the proposed terms of a royalty-free cross-licence for implementers of it’s digital video technology has drawn predictable criticism from a number of sources, including Open Source Initiative President Simon Phipps (‘proposal closes door on software freedom’) and FOSS Patents blogger Florian Mueller (effectively accusing Google of hypocrisy and disingenuousness).

It is easy to be cynical about the motivations of a company as large and ubiquitous as Google.  But it is worth having a closer look at exactly what Google has achieved here, regardless of its level of self-interest.  In my opinion, the deal that Google has struck is a significant step forward for royalty-free and open standards on the internet.  And while it is never going to satisfy those individuals and organisations at the more radical end of the free software and/or anti-patent movements, as a practical matter the deal will give the vast majority of internet users an assurance that there will be an open source and royalty-free video standard available for use on the World Wide Web.

17 November 2012

The Australian Apple/Samsung 2013 Year Planner is Here!

2013 Apple-Samsung ThumbnailWith 2012 drawing to a close, Patentology is pleased to announce the availability of the Australian Apple/Samsung 2013 year planner.

This handy reference is an absolute must-have for the wall or desktop of numerous Australian IP lawyers, patent attorneys, Federal Court employees, tech journalists, patent litigation enthusiasts and – of course – Federal Court Justice Annabelle Bennett.

Justice Bennett recently timetabled a number of new hearing dates in the second half of 2013, bringing the total number of court days set down next year in the Australian Apple v Samsung case to 123.  Yes, you did read that correctly – one hundred and twenty-three.  This is in addition to the 46 days of hearings which will have taken place by the end of this year, not including last year’s interlocutory proceedings, and various dates that have been set down for administrative purposes (e.g. management conferences and directions).

Our 2013 year planner – a larger version of which is available by clicking on the thumbnail above – should therefore prove invaluable to to the many individuals involved in this gargantuan case.  It will help senior counsel to organise the expenditure of their substantial fees on European sojourns during the northern summer, while less-experienced articled clerks and junior associates will be able to plan when they might be able to grab a few hours of sleep, or invest a little time in any surviving relationships they may have outside of work!

It does not appear that any of the dates that have been reserved by Justice Bennett are speculative, or merely for contingency.  By all accounts, she has been meticulous in time-tabling the trial, and every set of dates is scheduled for hearing of a specific aspect of the case.

08 November 2012

Fragmented Patent Pools Will Not End Smartphone ‘Wars’

Photograph © Mark Summerfield 2008Depending on where you are in the (developed) world, the next generation of mobile communications networks is either already with you, or on its way.  Colloquially known as ‘4G’, it is more accurately termed ‘LTE-Advanced’, an upgrade from the Long Term Evolution (LTE), or ‘3G’ technology which is now widespread.  LTE-A is an improvement in every respect over 3G – higher peak data rates, greater spectral efficiency, reduced latency and increased throughput.

And, of course, there are more patents than ever before covering networks and devices capable of communicating using the full range of available standards.

Considering that the holders of patents covering the previous generation technologies seem unable, or unwilling, to resolve their existing disputes over access and licensing terms for access to standards-essential patents (SEPs), it may be difficult to imagine how there could ever be peace as the number of such patents – and associated patent holders – only seems to be increasing.

The creation of ‘patent pools’ – collections of SEPs owned by multiple proprietors, and made available as a block via a single licence agreement – may therefore be seen as an encouraging sign.  Two such pools have recently been established covering subsets of the LTE SEPs.  And while we would like to think that this is the beginning of a more peaceful coexistence among competitors in the mobile communications space, a closer look at the LTE patent landscape suggests that there is a long way to go before these pools will represent a realistic option for achieving a truce in the industry.

06 November 2012

South Korea is Not a ‘FRAND Rogue State’!

KoreasOn 24 August 2012, the Seoul Central District Court issued its decision in one of the many ongoing patent cases between rivals Apple and Samsung.  We did not report on the ruling at the time because, frankly, there was very little information available in English, and we therefore did not feel that there was anything much we could add to the news reports (such as this one, from Bloomberg).

Overall, while the decision produced a rare win for Samsung, things certainly did not all go the way of the Korean company.  Of four patents which it asserted against Apple, two were found invalid, and one was found not to be infringed.  Furthermore, Apple was successful in a counterclaim, which resulted in injunctions against various Samsung products, and an award of 25 million Korean won (about US$23,000) in damages.

Samsung’s single valid and infringed patent also earned it an injunction against a number of Apple’s 3G-capable devices, and a damages award of 40 million won (about US$35,000).

One widely-read commentator, however, was willing to infer a great deal from very little.  Florian Mueller, in a FOSS Patents blog post entitled ‘Apple-Samsung ruling suggests South Korea is a FRAND rogue state’, wrote:

A couple of court decisions announced in Seoul, South Korea, this morning indicate that South Korea has decided to become a rogue state in connection with standard-essential patents, essentially telling foreign companies that in order to sell their technology products to the country's 50-million population, they must bow to extortion by Samsung and LG.

This is highly problematic and will have diplomatic repercussions. The victims of such abuse will be companies from the United States, Europe and Japan, and increasingly also Chinese companies. I don't know what Apple is going to do, but it would make sense to talk to both U.S. presidential candidates at the earliest opportunity.

So far, we are unaware of any credible allegations of ‘extortion’ having been made against any Korean companies, or of any diplomatic repercussions, or indeed of any impact on the US presidential race now drawing to a conclusion!

However, this week we have come into possession of a full English translation of the Media Report issued by the Seoul Court on 24 August in relation to its ruling on the Samsung patents, and we have to say it makes very interesting reading, with none of the hallmarks you might expect of a document issued by a ‘rogue state’.

The translation was prepared by Korean IP law firm Lee & Ko (which acted as cousel for Samsung in the case), and was circulated to delegates who had attended the AIPPI Congress in Seoul on 20-23 October 2012.  Lee & Ko have kindly provided their permission for Patentology to make the translation available in full, and it can now be viewed and/or downloaded from Google Drive.  The following is a summary of the Court's main points and reasons.

27 July 2012

Apple v Samsung – Trial Commences, But Will It Matter?

Tablet smartphone stackThis week marked the first five days, in Sydney, of a trial scheduled to run for a total of 34 days between now and October, with Apple and Samsung before Justice Annabelle Bennett in the Federal Court of Australia.  This country has not seen a more extensive set of bookings in any major venue since US pop star P!NK played 58 dates here on her Funhouse tour in 2009!

Some good coverage of the week’s events has been provided by ZDNet reporter Josh Taylor: Australian Apple v. Samsung patent hearing begins; Samsung sacrificed Qualcomm truce for Apple war; Apple: our 3G isn't Samsung's 3G; and Samsung accuses Apple of ‘ambush litigation’.  Rather than simply rehash these stories, in this article we will review some of the issues that have arisen in recent days – both at the trial and more widely – and look at what this might all mean for the longer-term outcome of the ongoing dispute.

15 July 2012

Australian Public Inquiry into the Compulsory Licensing of Patents

Independent InquiryThe Australian Government has asked its Productivity Commission to conduct a nine-month inquiry into the compulsory licensing provisions in the Patents Act 1990


The stated purpose of the inquiry is to ‘assess, advise and recommend on the impacts and mechanisms of compulsory licensing invoked by the Patent Act's public interest and anti-competitive safeguard.’

The Terms of Reference require the Commission to:
  1. assess whether the current Australian provisions can be invoked efficiently and effectively;
  2. recommend any measures to efficiently and effectively exercise these safeguard provisions, in a manner consistent with Australia's international obligations; and
  3. recommend any alternative mechanisms, to ensure that the balance between incentives to innovate and access to technology best reflects the objectives of reasonable access to health care solutions, maximising economic growth and growing the Australian manufacturing industry.
The inquiry will be relatively wide-ranging, taking into account an number of specific areas of sensitivity and public interest, including access to affordable healthcare, impact of gene patents, climate change mitigation, food security and alternative energy technologies, and technical standards essential patents.  It will also look at comparisons with compulsory licensing provisions in other jurisdictions, and consider how the provisions interact with crown use (i.e. provisions enabling government authorities to compulsorily acquire patent licenses) and the new research exemption to infringement introduced by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (see Bar Raised, as IP Law Reforms Signed Into Law).

The Commission is inviting submissions from interested stakeholders, and will be conducting public hearings.

02 June 2012

Apple Not ‘The Developer for the World’ Says Hypocritical Cook

Tim CookAs presented in Walter Isaacson’s biography, it seems that Steve Jobs did not require a rational justification to ‘go thermonuclear war’ against Google and Android.  As we wrote back in October last year, Jobs was willing to ‘spend my last dying breath if I need to, and I will spend every penny of Apple's $40 billion in the bank, to right this wrong.’  To him, the battle over smartphone technology was not about business or money.  Isaacson reports Jobs telling former Google CEO Eric Schmidt, ‘I don't want your money. If you offer me $5 billion, I won't want it. I've got plenty of money. I want you to stop using our ideas in Android, that's all I want.’

Jobs had built Apple into the world’s biggest tech company, and so he could really do no wrong in the eye’s of Apple shareholders and aficionados.  But the fact is that starting a global thermonuclear war, or spending every cent of the company’s money in pursuit of a principle, is not good business.  That path leads ultimately to shareholder revolt!

Jobs’ successor, Tim Cook, has therefore inherited a potential ticking time-bomb.  Apple had some early wins in the patent disputes which it started, but as the various court proceedings drag out over months – and those months will become years, unless there is a settlement – the company is finding itself increasingly mired in suits, countersuits, side issues and appeals.

It should therefore some as no surprise that Cook is trying to recast the battle as one which has a rational business foundation, and in which Apple is on the side of goodness and light.  The cost and distraction of all these law suits must now be justified to observers and shareholders as something more than the result of one person’s outrage.

So, when questioned about the ongoing IP disputes, Cook has taken to responding that, while he would prefer to settle, Apple will not be the world’s developer.  At Apple’s quarterly conference call on 24 April 2012 (as reported by CNET) Cook said ‘I would highly prefer to settle than to battle.  But it’s important that Apple not become the developer for the world. We need people to invent their own stuff.’

26 February 2012

The Fraught Issue of FRAND III: Antitrust and the Future of FRAND

Trust No One... In Part I of this series, we introduced a few background concepts, namely: FRAND licensing; royalty stacking; and patent pooling. In Part II we focussed on the recent political manoeuvrings of various interested parties, in particular Google, Apple and Microsoft. In this final part, we look at the tension between patents, FRAND licensing agreements and competition law, and what this might mean for the future of FRAND and the current disputes.

On 31 January 2012, the European Commission (EC) announced that it has opened a formal antitrust investigation into whether Samsung’s use of its standards-essential patents constitutes illegal anticompetitive behaviour.  It had been conducting a ‘preliminary investigation’ for some months, as part of which the EC had requested that both Samsung and Apple provide information regarding ‘the enforcement of “standards-essential” patents in the mobile telephony sector’.  Samsung’s response at the time was that it had ‘at all times remained committed to fair, reasonable and non-discriminatory (FRAND) licensing terms’ for its wireless standards-related patents,” and was cooperating fully with the EC.

Since then, both Apple and Microsoft have filed official complaints about similar behaviour by Motorola Mobility (with Microsoft’s complaint also naming Google).

The main competition concern appears to be over holders of standards-essential patents seeking injunctions based on those patents, which they have pledged to make available on FRAND terms.  As discussed in our previous article in this series, we cannot see why a patentee should not be entitled to an injunction in appropriate circumstances, such as when another party has refused to take a license on identical terms to other licensees.  However, Europe’s competition regulator, and companies that do not have large portfolios of standards-essential patents, may well see things differently.

In this final article in our series on FRAND we look at the antitrust complaints, the effect these may have on the balance of power in the ongoing disputes, and what this may mean for future developments.

14 February 2012

The Fraught Issue of FRAND II: the Politics of FRAND

your-way-my-wayIn Part I of this series, we introduced a few background concepts, namely: FRAND licensing; royalty stacking; and patent pooling. In this article we will focus more closely on the recent political manoeuvrings of various interested parties.  Part III looks at antitrust issues and how the current disputes over standards-essential patents might be resolved. 


In particular, recent actions by Apple, Microsoft, Google and the European Commission are of interest:
  1. the reported ‘leaking’ of a letter from Apple to the European Telecommunications Standards Institute (ETSI), dated 11 November 2011, complaining about ‘a lack of consistent adherence to FRAND principles’;
  2. Microsoft issuing a statement promising to make ‘essential patents’ available to competitors at fair and reasonable licensing rates, and promising not to seek injunctions or exclusion orders against unlicensed companies making products that infringe these patents;
  3. reports that Google was informing standards setting organizations that Motorola Mobility's standards-essential patents will continue to be available on FRAND terms after its acquisition of the company, followed closely by a ‘leak’ of Google’s actual letter to the IEEE standards body; and
  4. the decision of the European Commission (EC) to open a formal antitrust investigation into whether Samsung’s use of its standards-essential patents constitutes illegal anticompetitive behaviour.
Notably, all of the companies identified above – not to mention the EC – are large, powerful and well-heeled.  They do not need to make promises or issue complaints, or launch investigations, in order to resolve their differences.  If they wished to do so, they could settle everything amongst themselves behind closed doors. 

Failing this, all of the companies involved are perfectly capable of funding the litigation necessary to have the courts decide their disputes for them.  And we should not forget that this is the role of the court in civil litigation – to reach decisions, based on the law, about disputed matters coming before it, and to make orders as to how the parties are to settle their differences.  In short, parties go to court to get an adjudication because they could not – or would not – sort their issues out for themselves.

12 February 2012

The Fraught Issue of FRAND I: A FRAND Primer

FraughtThis is the first of a three part series of articles.  Part II looks at recent political manoeuvrings of various interested parties, in particular Google, Apple and Microsoft.  Part III covers antitrust issues and how the current disputes over standards-essential patents might be resolved.

Readers who have been following the various mobile device patent disputes over the last few weeks will almost certainly have encountered the term FRAND (‘Fair, Reasonable and Non-Discriminatory’) in relation to patent licensing, and the rights of patent-holders – such as Samsung and Motorola – to sue competitors – such as Apple – for injunctions barring sales of competing products.

However, those not involved in patent licensing might never have heard of FRAND until recently.  A few time-limited Google searches for the term ‘FRAND licensing’ reveals 345,000 results for the past year, with 160,000 for the past month.  Going back, however, there are 104,000 results for the previous 12 months, and only 74,000 for the 12 months prior to that.  Additionally, while the older results are largely legal texts, academic commentary and policy documents, recent results come primarily from the media, including traditional mainstream outlets, as well as online sources such as industry, trade and technology news sites and blogs.

Thanks to some highly-publicised actions by some high-profile entities, FRAND is now pretty much mainstream, at least within the technology media.

The tenor of much recent online commentary is to the effect that the use of FRAND, or ‘standards essential’, patents as weapons in the patent ‘wars’ is at least unethical, probably unconscionable, and possibly illegal.

But before you pick sides in the debate over FRAND, we think there are a few matters you need to mull over, which are not getting the airing they deserve.  And the first, and most important, of these is that most of the current fuss over FRAND is political, not legal, and its media profile is largely the result of carefully-executed PR work by the main players, including Apple, Google, Microsoft, and even the European Commission.

01 November 2011

FRAND Obligations to be Aired in Australian Court

Under fire - the iPhone 4S Apple and Samsung today faced Justice Annabelle Bennett once again in the Federal Court of Australia, in Sydney, at a directions hearing in relation to Samsung’s application for an interlocutory injunction barring the iPhone 4S from the Australian market.

According to reports on ZDNet.com.au and ITNews.com.au (see Mobile telcos face Apple-Samsung scrutiny and Apple invokes French law in iPhone hearing) much of the discussion in court today centred around how the ‘FRAND licensing issue’ will play out.

As we reported on 18 October 2011 (see Samsung Appeals, Retaliates, in Patent War With Apple), the patents upon which Samsung is relying in this chapter of the dispute are technically strong, in that they relate to features of the core wireless communications technologies deployed in the 3G mobile communications standards.  If Apple’s products did not implement the patented functions, it is likely that they would be unable to communicate effectively with the networks operated by carriers such as Telstra, Optus and Vodaphone.

However, these patents also suffer from a potential strategic weakness, in that their very essentiality to implementation of the wireless communications standards could limit the manner and extent to which they are enforceable against Apple.

THE ‘FRAND LICENSING ISSUE’

So what is the ‘FRAND licensing issue’, and why is it likely to occupy so much of the court’s attention?

18 October 2011

Samsung Appeals, Retaliates, in Patent War With Apple

Apple-Android-InvadersLast Friday, we reported in detail on the published judgment of Justice Annabelle Bennett, in the Federal Court of Australia, granting Apple a preliminary injunction against Samsung’s Galaxy Tab 10.1 (see Samsung’s ‘Eyes Wide Open’ Sinks Australian Galaxy Tab 10.1).

While we were doing so, Apple and Samsung were back in court arguing about the scope of the injunction.  As reported by Fairfax Media (Apple fails in new Samsung court bid), Apple’s lawyers argued that the injunction should be broad enough in its terms to prevent Samsung from launching any new tablet device, and expressed concerns that the Korean company would simply launch a near-identical problem under a different name.  Samsung, for its part, rejected this argument, pointing out that a broad injunction could impact upon products already on the market in Australia – such as the Galaxy Tab 7 and 10.1v – about which Apple has not complained.

Unsurprisingly, Justice Bennett – who indicated earlier in the proceedings that she would entertain issuing only a narrow injunction – rejected Apple’s submissions.  The Court Orders require that Samsung ‘will not import, promote, offer to supply, supply, offer for sale or sell in Australia the device, examples of which were supplied by the solicitors for the respondents to the solicitors for the applicants on 25 August 2011 (Australian Galaxy Tab 10.1)’, or ‘any version of a Galaxy Tablet 10.1’ which includes the ‘heuristics’ feature or ‘touch screen’ panel as demonstrated to the court, and allegedly covered by Apple’s patents.

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