Samsung could be fined billions for trying to ban Apple products in Europe

posted by Alan F.

Dec 26, 2012, 3:27 PM

Samsung could be fined billions for trying to ban Apple products in Europe

Samsung sought a European sales ban on the Apple iPhone

Samsung is facing a potential fine of 10% of its revenue, or billions of British Pounds, for failing to license its standards-essential patents to Apple using fair and reasonable terms. When Apple refused to pay what it considered to be an unfair licensing fee, Samsung sought a sales ban on the Apple iPhone and Apple iPad in Europe,a request that has been rejected by the EC. The potential fine could be as high as 9.3 billion GBP or $15 billion USD based on Sammy's 2011 revenue of $148.9 billion. The EC Competition arm made a formal statement on Friday, objecting to Samsung's actions.

Google's wholly owned Motorola subsidiary is also being looked at by the EC for using its standards-essential patents for Wi-Fi and the H.264 video standard to seek a European sales ban on Microsoft's Xbox 360 and Windows Phone handsets. Both Samsung and Motorola could face fines in the U.S. where the FTC this month ruled that Motorola was using its FRAND patents to "hold up" Microsoft. Samsung is being investigated in the U.S.as the Justice Department is examining the Korean tech giant's actions toward Apple with its FRAND patents.

"Samsung remains committed to licensing our technologies on fair, reasonable and non-discriminatory terms, and we strongly believe it is better when companies compete fairly in the marketplace, rather than in court. In this spirit, Samsung has decided to withdraw our injunction requests against Apple on the basis of our standard essential patents pending in European courts, in the interest of protecting consumer choice."-Samsung playing defense

There is a big difference between the patents Apple has been trying to protect with its law suits, and the FRAND patents owned by Samsung and Motorola. Apple seeks to defend the illegal use of patents it owns which are not essential to a product such as the "pinch-to-zoom" gesture, and certain design patents that are in in Apple's IP portfolio. The patents being used by Samsung and Motorola are considered standards-essential which means that because they are essential to the production of a product, the owner of the patent must license it at a fair and reasonable basis to all who request it. If a price cannot be agreed on, both sides must accept the licensing fee determined by the court. Apple said it would pay Samsung for the rights to use the patents in question, but both parties could not agree on the price.

Just before the EC's Competition arm made its statement on Friday, Samsung withdrew its request for the European sales ban on the Apple iPhone and Apple iPad, but has continued its lawsuit against Apple for using Samsung's patent without licensing it. European commissioner for competition Joaquin Almunia says that allowing companies like Samsung that own FRAND patents to ban sales when licensing cannot be agreed on, is akin to a "hold-up" since these patents are essential for a company to operate in a particular market. The EC also decided that since Apple had offered to pay a licensing fee to use the patents, a ban on its products was not warranted''.The commission added, "Recourse to injunctions harms competition." Now it will be up to Samsung to reply after which the EC will announce a fine or take some other action.

source: Guardian

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87 Comments

59. Shino

Posts: 196; Member since: Jul 23, 2012

Bhehe, this could be the grand finale for Samsung. But they are stupid. What do they expected? When you are a thief, finally you get what you deserve. What is more interesting is that EC finally went after the big liar of them all - Giggle.

posted on Dec 27, 2012, 2:50 AM 0

67. tedkord

Posts: 17519; Member since: Jun 17, 2009

When will Apple get what it deserves? (Desktop GUI and mouse, multitouch, swipe to unlock, notification shade, wireless sync, etc...)

posted on Dec 27, 2012, 6:24 AM 1

72. mrochester unregistered

Does Apple deserve anything?

posted on Dec 27, 2012, 7:38 AM 0

75. ultimatebatman

Posts: 52; Member since: Dec 04, 2012

Swift death

posted on Dec 27, 2012, 9:55 AM 0

79. mrochester unregistered

I think the reduction in competition and innovation that would lead to would cripple the industry. I don't think a one horse race with only Samsung in the pack sounds very appealing!

posted on Dec 27, 2012, 1:26 PM 0

84. ajc76

Posts: 6; Member since: Dec 10, 2012

But a one horse race with Apple does...?

posted on Dec 27, 2012, 5:33 PM 1

85. jroc74

Posts: 6023; Member since: Dec 30, 2010

Exactly...thats what Apple wants. I dont wanna hear no sympathy posts about Apple. TV manufactures dont sue each other over corners and icons. car manufactures dont either. Even the few lawsuits that did happen have fizzeled away. Now a days, sometimes I cant tell what car is what unless I look for the car maker sign.

posted on Dec 27, 2012, 6:12 PM 0

87. mrochester unregistered

A one horse race with only Apple in the pack isn't appealing in the slightest. The current level of competition drives the innovation that we have witnessed, with particularly Samsung and Apple engaged in a one-upmanship battle. That's absolutely brilliant for us as consumers as it means we get amazing products. What the industry desperately needs is a strong third player (or ideally, even more) such as Windows Phone or BB10 so that we have a greater choice of eco-systems rather than the current lock down of Android (Samsung) and iOS (Apple).

posted on Dec 28, 2012, 6:29 AM 0

58. ultimatebatman

Posts: 52; Member since: Dec 04, 2012

So extremely basic rectangualr designs and common pinching and swiping gestures are exempt form fair use? Who are these Ahole jusdges who consid=stently drink Apple's koolaid? And why is it immediately decided that Apple:s price is the correct price to charge for FRAND patents? We all know Apple expects to pay the minimum for the maximum, like they do with their labor and materials, so why should Motorola and Samsung accept to be ripped off???

posted on Dec 26, 2012, 10:56 PM 1

63. mrochester unregistered

I think you're missing the point of the article which is the difference between FRAND and non-FRAND patents. It isn't up to Apple to decide how much to pay for Samsung's FRAND patents, it's up to the court (which has yet to be decided). In the meantime, Samsung cannot stop Apple from making or selling products using those patents (which is what Samsung tried to do, and are now being investigated and fined for).

posted on Dec 27, 2012, 4:03 AM 0

74. ultimatebatman

Posts: 52; Member since: Dec 04, 2012

I understand the difference. My argument is that Apple patented ridiculously common shapes and designs, and sues everyone for using them. Shouldn't a rectangular shape or simple pinch and swipes be governed by "Fair, Reasonable, and Non-Discriminatory" usage laws? It seems that the law turns a blind eye in this case, since Apple saw able to gouge 1 billion $ out of Samsung for their use.

posted on Dec 27, 2012, 9:55 AM 1

78. mrochester unregistered

Apple can patent whatever they like; it's up to the respective patent offices to decide whether something is patentable or not. Only patents that form part of an agreed standard are subject to FRAND terms. The pinch to zoom gesture isn't an agreed standard and therefore doesn't fall into the FRAND category. Manufacturers could design and implement other ways of zooming into and out of content on a touchscreen device (such as a jog dial, or + and - buttons on the screen etc).

posted on Dec 27, 2012, 1:25 PM 0

57. lubba

Posts: 1313; Member since: Jan 17, 2011

Yes too bad for Samsung but that's what you get for trying to be like somebody else. As Google, I hope they get penalized to the max! And to that former Motorola CEO Sanjay, you are a f**king idiot. Sold his company to Google in a time when MS was trying to Cort for their business of building building WP. Now the idiot is fired, hundreds layed off, and devisions being sold off. Motorola is basically dead! The devil has taken over.

posted on Dec 26, 2012, 10:52 PM 1

48. corporateJP

Posts: 2458; Member since: Nov 28, 2009

This is comedy. Apple doesn't want to pay for something (the "fair price" at this time is under question) and is allowed to continue manufacturing and sales of their devices, and the owner of the patent will be fined? Europe is a bigger joke legally than the U.S.

posted on Dec 26, 2012, 9:19 PM 4

47. jsdechavez

Posts: 818; Member since: Jul 20, 2012

This is getting ridiculous...

posted on Dec 26, 2012, 8:41 PM 2

45. InspectorGadget80 unregistered

are u fcking serious? When this dumb sht is going to end. how the hell the EU will fine Samsung and not Apple? Apple is the one BANING SAMSUNG in every other country yet they got away with it excluded some countries. Their being PAID BY APPLE I'm sure of IT

posted on Dec 26, 2012, 8:15 PM 3

41. willard12 unregistered

"Apple seeks to defend the illegal use of patents it owns which are not essential to a product such as the "pinch-to-zoom" gesture" Can you still own patent if it's invalidated? http://www.phonearena.com/news/Apples-pinch-to-zoom-patent-invalidated-by-USPTO_id37871

posted on Dec 26, 2012, 7:54 PM 4

44. jroc74

Posts: 6023; Member since: Dec 30, 2010

And thats 1 out of 3 that the USPTO made invalid.

posted on Dec 26, 2012, 7:59 PM 0

37. Aeires unregistered

Key phrase in the entire story: "When Apple refused to pay what it considered to be an unfair licensing fee..." Apple thinks anything fair is too much, not much merit in their point of view when they don't want to pay what everyone else has paid.

posted on Dec 26, 2012, 7:44 PM 4

42. jroc74

Posts: 6023; Member since: Dec 30, 2010

Of course....folks will over look that part. Maybe because Apple sells so many iDevices....they think they should pay less. If I sell 10 devices and pay 2% per device and you sell 100 million and have to pay 2% per device....2% is 2%. Sorry you are so successful. I wouldnt be surprised if Apple is thinking this.

posted on Dec 26, 2012, 7:59 PM 3

62. mrochester unregistered

How do we know that Apple don't want to pay what everyone else pays?

posted on Dec 27, 2012, 3:58 AM 0

69. Aeires unregistered

Because their stance on what should be paid was brought out in the Samsung trial. Apple wanted a ridiculous amount for Samsung to use their patents but only wanted to pay pennies for Samsung's patents.

posted on Dec 27, 2012, 6:54 AM 1

71. mrochester unregistered

How do you know how that compares to what other companies pay and license to Samsung for access to the same tech?

posted on Dec 27, 2012, 7:37 AM 0

73. Aeires unregistered

No one pays pennies for vital patents. Standard fees usually run around 2-4 dollars mostly. On the flipside, it's highly unlikely that anyone pays the $24 dollars Apple had requested Samsung pay for one of their patents. Research, information is available if you look.

posted on Dec 27, 2012, 8:39 AM 1

77. mrochester unregistered

What about what Samsung/Apple requested to cross license from the other party? You've only mentioned monetary compensation so far.

posted on Dec 27, 2012, 1:19 PM 0

35. tiara6918

Posts: 2263; Member since: Apr 26, 2012

Why do they have to fine such a huge amount? Were there damages done?

posted on Dec 26, 2012, 7:29 PM 0

61. mrochester unregistered

I don't think it matters whether any damage has actually been doing. The issue is Samsung showed they were fully prepared to use their FRAND patents in an abusive and anti-competitive way.