Samsung sacrificed Qualcomm truce for Apple war

Samsung sacrificed Qualcomm truce for Apple war

Summary: Samsung ended a truce with Qualcomm and its third-party vendors over 3G patent use when Apple filed court proceedings against Samsung last year.

SHARE:
TOPICS: Patents, Apple, Samsung
38

Samsung signed an agreement with Qualcomm not to sue the chip maker or its customers for using Samsung's 3G patents, but this agreement was called off when Apple took Samsung to court over the Galaxy Tab, Samsung admitted in the Australian Federal Court this morning.

The Federal Court today commenced the long-awaited case between Apple and Samsung over alleged patent infringements by the two companies. The court began hearing Samsung's counter-claim against Apple — that the company infringed on three standards-essential 3G patents held by Samsung in the iPhone 4, iPhone 4S and iPad 2.

Samsung counsel Neil Young today admitted that Qualcomm, which supplies chips to Apple, had an agreement with Samsung whereby the Korean tech giant would not sue Qualcomm or its customers for infringement on 3G patents. According to court documents, this agreement was first made back in 1993.

"There was an agreement between Samsung and Qualcomm. That agreement was not a licence agreement. It contains a contractual provision that Samsung would not sue Qualcomm or customers of Qualcomm who apply [the 3G patents]," Young said.

Samsung stated that this agreement was terminated in April 2011, with notice provided to Qualcomm, when Apple first filed proceedings against the Galaxy Tab in California.

At that point, Apple sought a licence to use Samsung's UMTS patents in its devices, and Samsung's counsel argued that the company offered a "fair commercial rate" to license the products under fair, reasonable and non-discriminatory (FRAND) terms. Samsung stated that Apple rejected this proposal, and refused to enter further negotiations to obtain a licence.

"Samsung has done nothing other than take steps to protect its patent rights against infringement in the same way in it would in the ordinary course in circumstances where it has been sued by Apple, and Apple has refused to enter negotiations for the UMTS patent," Samsung's counsel said.

Samsung stated that Apple's argument is that Samsung's willingness to license the patents means that the patents are automatically licensed under European Telecommunications Standards Institute (ETSI) laws — and, as Australia is an associate member of the institute, these rules should apply here. Samsung will argue that this is not the case, relying on expert testimony from a French professor, as well as Australian legal experts.

Samsung initially sought to prove that Apple had infringed on seven patents, but has now settled on the following three patents as part of its case:

  • Australian Patent number 2005239657: "method and apparatus for transmitting and receiving data with high reliability in a mobile communication system supporting packet data transmission"

  • Australian Patent number 2005202512: "method and apparatus for data transmission in a mobile telecommunication system supporting enhanced uplink service"

  • Australian Patent number 2006241621: "method and apparatus for transmitting/receiving packet data using predefined length indicator in a mobile communication system".

The first week of the case will focus on the latter two patents, while the hearings beginning on 6 August will initially focus on the first patent.

Topics: Patents, Apple, Samsung

About

Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

38 comments
Log in or register to join the discussion
  • Should lawmakers define who invented what?

    Should we allow lawyers to define inventions?
    Should we switch that tasks to a broader community, the users, to define what is invented, what is only a borrowing, and what is only a potential invention? Logically for borrowing, we should also well define to accept or not splitting inventions when well know applications are merely based on evolutions. And most importantly, we should not accept technology exploitations as invention. We must have some balance approaches.
    BeanCube
    • What R U talking about? Are you confused?

      @BeanCube:

      Your post sounds awfully confused. Might be your spellchecker, but your sentences don't make sense.

      I hope you're not another person crying "our patent system is broken" -- or even "software patents shouldn't be allowed".

      Your post shows you don't understand how our (or any) patent/IP system works. Lawyers and lawmakers do NOT control or decide outcomes of patent applications or grants. So I'm not sure why you're asking. Are you proposing they should?

      Our patent system is not perfect, but no countries' is either. They all have weaknesses, inefficiencies, and on occasion make mistakes -- but I would say rarely (definitely not as often as some on ZDNet like to claim).

      But our system IS very effective at establishing and protecting the rights of IP holders. Just because we have more lawsuits now is not due to (and should not be put as a blame of) our patent system. The reason for the RECENT increase in patent-infringement lawsuits is MAINLY due to the immense (BILLIONS) of $$$ at stake for these companies. And unfortunately companies choose to "role the dice" and play the odds with these suits -- even if their legal team tells them they have a slight chance at winning. Partly it's also for media attention -- and strategic advantage.

      Few (percentage-wise) infringement lawsuits now are based on true merit or true legal foundation.

      I would say, though, that this article presents additional arguments against Samsung's behavior. From what's described, Samsung seems to have broken a 1993 contractual agreement with Qualcomm, surrogated to their customers. However we don't know the basis of why Samsung terminated that contract in 2011 -- and we don't know if they did or didn't have just cause.

      On the issue of FRAND licensing by Samsung to Apple -- as many countries/markets require -- we don't know the terms (e.g., price) that Samsung was charging Apple for "fair use" of their UMTS patents, or whether they were charging comparable prices to their other licensees.

      Earlier, there was a similar suit/countersuit between Apple and Nokia (with Apple claiming Nokia was being unreasonable and not complying with FRAND regulations). In that, Apple eventually won (it was found Nokia was not being fair in it's license pricing).

      From what I've read here and elsewhere, it does appear Samsung has a difficult case.

      There's enough "smoke" here to indicate Samsung is not playing fairly.
      Uplift Humanity
      • Woops, a typo

        Typo in my 7th paragraph..... should say "subrogated to their customers" (not "surrogated"). Sorry about that.
        Uplift Humanity
        • other typo's as well

          "role the dice" should be roll. role doesn't make sense in the context of rolling dice.
          "countries'" should read country's.
          Bean Cube's worst offense was "switch that tasks " probably should read switch that task and balance approaches" probably should be balanced approaches to make more sense.
          dhays
          • lol...

            haha

            Countries should not read country's moron. It's countries.
            Misplaced87
      • I agree, but there's a problem

        There are certain situations where an invention/innovation takes place by company A, but company B files and wins the patent first. Or company A makes said invention/innovation, but does not patent every single tweak, but company B does and now company A is violating a patent. Similarly, patents that are given for "future tech" potentially hinder/discourage a different company from making advances with that technology.

        As far as all the current lawsuits, if I can make some minor tweak to get around said allegation, it seems awfully petty to go after someone. I'm not naming names here intentionally because I feel that it is not worth it to the customer in the long-run for this to continue.

        Eventually all of these lawsuits are going to start adding to the cost of devices/services. Whether or not it is to fix a reputation for being a patent squatter, lawsuit-happy, or found repeatedly guilty, the only individuals that win here are the overly rich, big-time investors. Sure, you might have a dozen or so Apple or Google shares or something and having it rise $50 makes you feel good. Guess what, the big guy that has hundreds/thousands of Google, Apple, etc. stock is laughing at you. Meanwhile, the common folk are still paying more.
        ikissfutebol
      • Not sure about your analysis...

        How do you get "Samsung seems to have broken a 1993 contractual agreement with Qualcomm" out of "this agreement was terminated in April 2011, with notice provided to Qualcomm"?
        ibsteve2u
        • Since Apple gives nothing for nothing

          How can you be sure there wasn't a non-competitive clause between Qualcomm and Samsung in that contract (and not license) which terminated the moment Apple started legal action against Samsung in the first place? Samsung simply notified Qualcomm of their breach of contract agreement, thereby terminating it, as they were required by common decency, and the law.

          So it's okay in your opinion that Apple can use essential FRAND licensed patents, without paying for it, by merely claiming "outrageous!" and tying things in court?

          Yet Apple patenting trivial and obvious designs such as the square or rectangular tablet with rounded corners is okay? How about the now invalidated multi-touch technology? Or about the now also invalidated swipe-to-unlock?

          It seems to me Apple is playing dirty, with FUD+BS against not only Samsung, but everybody and everything else not labeled "Apple"... To the detriment of all consumers worldwide. (And to the sole benefit of AAPL's investors, alas).

          But that can go for only so long...

          ~~~~~~~~~~
          Early ripe. Early rotten.
          {Japanese Proverb}

          None of us is a smart as all of us.
          {Japanese Proverb}
          WinTard
          • Wonderfully put

            Apple continues to use double-standards when it comes to things like this. It amazes me that people continue to support such a "rotten" company.
            anonymous
          • Innovations

            Rotten? Didn't you see Apple's response that they implemented the patent differently.... in other words.... "innovated" the implementation of a FRAND patent to avoid licensing.... They are "innovative".... one can't disagree with the assertion.... If you are one of the person who has lied relatively less .... you would be able to appreciate the creativity and "innovations" involved in such an act... not only for your less freq
            ashwinipn
          • Innnovations... continued...

            less frequent lies..... but the amazement at the quantity and such creativeness and "innovations" you witness in others' at times...
            ashwinipn
          • Compatibility?

            Chances are that if Apple tweaked the implementation enough to not be covered by the patents, it would be incompatible with most existing implementations.

            Or wait a minute... Is that why iDevices are notoriously bad at anything radio?
            Natanael_L
        • How you can be sure about anything without seeing the agreement?

          The debates here are such an incredible bunch of hot air. Absent actually reading the entire agreement between the parties, one cannot determine ANYTHING about who might have done a wrong if anyone. Did Samsung get something in return for signing the agreement so in fact they did not give anything away in 1993 but got more than they gave, and then just walked away from a valid contract that Qualcomm had no incentive or insufficient resources to challenge? Was their an escape clause, or NOT. I suggest that instead of debating something without access to the FACTS, each one os us use our time for CONSTRUCTIVE THINGS.
          Sean Durkin
      • Who is really confused? Who is under Apple's RDF spell? Who is unfair?

        @Uplift Humanity
        You said: "Earlier, there was a similar suit/countersuit between Apple and Nokia (with Apple claiming Nokia was being unreasonable and not complying with FRAND regulations). In that, Apple eventually won (it was found Nokia was not being fair in it's license pricing)."

        That is pure insanity!

        However simple undeniable FACTS prove otherwise:

        Source: http://lmgtfy.com/?q=Apple+loses+patent+settles+with+Nokia
        About 17,500,000 results (0.48 seconds)

        No amount of FUD you and others spew, will succeed to BS the large majority of intelligent and informed people out there.

        Apple is losing all credibility, both in the court of law all over the world, as well as in the court of public opinion.

        Smoke eh? There's an app for that!

        ~~~~~~~~~~~
        Advertising may be described as the science of arresting the human intelligence long enough to get money from it.
        ~ Stephen Leacock

        Many a small thing has been made large by the right kind of advertising.
        ~ Mark Twain
        WinTard
        • It WAS a win for Apple, WinTard.

          Apple had been holding the Nokia FRAND royalties in an Escrow account from the day they started selling the iPhone in anticipation of paying those royalties. Nokia refused to license the patents in a FAIR REASONABLE and NONDISCRIMINATORY manner as they had agreed to when they placed them in the consortium's 3G pools of patents. Instead, they were demanding rates that were seven times greater than what other cell phone makers were required to pay AND demanding that, even to pay those rates, Apple had to cross license non-standard essential patents (SEP) from the iPhone to Nokia. Under the rules of the Consortium, any user of the technology who could not get a FRAND license from the patent holder was free to USE the disputed patents, so long as the user paid the prevailing license fee into an account, holding until such time as the dispute was settled. The courts agreed that Nokia was DUE the license at a FRAND rate, which Apple happily paid, including arrears, but that NOKIA was NOT due anything more than that FRAND rate... and that Apple did not have to pay more nor did Apple have to cede any of the non-SEP Intellectual Property to gain access to FRAND patents. Apple essentially won although technically the ruling appears to have been entered on Nokia's behalf, in that it ordered Apple to pay the royalties—royalties Apple had always been willing to pay.
          Swordmaker
      • Except that the patent system really is broken.

        And lawmakers DO control or decide outcomes of patent applications or grants. It's true they don't do it directly as in reviewing and approving individual applications, but the legislative branch is responsible for the laws under which those applications are evaluated and has the power to change said laws.

        I firmly believe that when someone (or some company) invents something, they have a right to profit from their invention and the right to protect their intellectual property. The issue as I see it is that there have been too many patents granted for things that are simple ideas that anyone could have thought of and are just obvious uses for the existing state of technology.

        I think this is what beancube was trying to get at when he talks about "technology exploitations": Exploiting the current state of technology to assemble a product. In point of fact, I don't believe Apple has ever "invented" anything in the way of hardware. They just assembled components that someone else invented. They have often assembled them in innovative ways, but there is really nothing much in the guts of the product that is any different from what anyone else is making. And rounded corners do not count as an invention.
        cornpie
      • "Our system"?!

        "Our system"?! And whose might that be, uplift humanity?

        Quite apart from the number of errors of fact, bias and plain spin in your post, this part beggars belief.

        I can tell from the spelling, and ethnocentric arrogant assumption that we are talking about the US system.

        This article was about an Australian case, Australian patents and therefore Australian IP law. Yet you trail off on some tangent without even indicating "I'm now talking about something wholly irrelevant to the original article", you just assume that everybody 'gets' that the topic is now US patent fairness. Nothing in Beancube's post suggests they were talking about US context.

        Your comments have added nothing to this thread as they are off topic, as well as glaringly suffering from pro-Apple bias. Others have already noted some, I think the Nokia example is RDF at its peak. Although reading that Samsung terminated an agreement as 'broke' an agreement is right up there! Did that happen automatically for you or did it come down in an update?
        lexter99
      • How is it effective?

        When the small guys goes to a large company and says "you broke our patent" and they say "well, here's 100 of ours that YOU are breaking", who does it protect? When you are a small company that are under threat to be sued over a crappy patent, but can't afford to go to court, who does it protect?

        Yup, only those with lots of cash.

        So if your point is that it protects the status quo, then yes it does. But in no way at all does it support innovation, not as it works today.
        Natanael_L
    • it does need balance

      the decisions in court which show who owns what are not fair by any means. Just how apple was granted 27 patents for things that shouldnt be patented or things they didnt invent.
      Jimster480
    • Patent infringement

      I want to see Apple's patent. I know Samsung's device looked identical, but what are the actual patents, and where can I read them ?

      S.
      ShaneK