Mobile telcos face Apple-Samsung scrutiny

Samsung is seeking to obtain agreements between Apple and Australian telcos Optus, Vodafone and Telstra, as well as the source code for the iPhone 4S firmware as it seeks to block the sale of Apple's newest smartphone.
Written by Josh Taylor, Contributor

Samsung is seeking to obtain agreements between Apple and Australian telcos Optus, Vodafone and Telstra, as well as the source code for the iPhone 4S firmware as it seeks to block the sale of Apple's newest smartphone.

In today's directions hearing for the ongoing patent dispute between Apple and Samsung over alleged infringements in the Galaxy Tab 10.1 and Apple's new iPhone 4S, Samsung counsel Cynthia Cochrane told Justice Annabel Bennett that in order to make its case for an interlocutory injunction on the sale of the 4S, it needs Apple to produce the agreements that it had made with the three major mobile telcos in Australia for all iPhone models. Samsung explained that these agreements would show the impact of the device on Samsung's market share and revenue.

"It goes to show [that] since the iPhone 3G was made available in Australia in July 2008, the impact on the market for every iPhone product has been significant, and has lead to a substantial increase ... in market share by revenue," Cochrane told the court.

In particular, Samsung is keen to find out the amounts of subsidies paid by Telstra, Optus and Vodafone to Apple for selling the iPhones on plans.

"If subsidies [are] given for the iPhone 4S, there are less to go around for my client's products."

Samsung had originally sought to obtain all retailer and operator agreements for both the iPhones and the iPad and iPad 2, but its request had been narrowed down to just agreements over iPhone models with the three major telcos. Apple has objected to producing any of the documentation, stating that it is irrelevant to the case.

Samsung took Apple to court over the iPhone 4S in mid October, claiming that the device infringes on three Australian patents held by Samsung:

  • Method and apparatus for transmitting/receiving packet data using a pre-defined length indicator in a mobile communication system (WCDMA)
  • Method and apparatus for data transmission in a mobile telecommunication system-supporting enhanced uplink service (HSPA)
  • Method and apparatus for transmitting and receiving data with high reliability in a mobile communication system supporting packet data transmission (HSPA).

Apple counsel Cameron Moore today argued that these patents fall under the standards for 3G set by the international standards body — the 3rd Generation Partnership Project (3GPP) — in partnership with the European Telecommunications Standards Institute (ETSI). He said that globally, Samsung had agreed to license these patents on fair, reasonable and non-discriminatory (FRAND) terms, and that on this ground, Samsung should just be seeking licence fees from Apple for the iPhone 4S in the form of damages.

Yet Cochrane rejected Moore's claims that FRAND applies in Australia, saying that this would be the first time that FRAND would be tested here.

"There is going to be dispute about its force in Australia," she said, adding that licensing agreements for the patents were not automatic, and that Apple had rejected Samsung's invitation to license said patents.

"We say it's not an automatic procedure, and we offered a licence to Apple and they declined to negotiate. We're disputing that the agreement applies.

Moore also claimed that because Qualcomm developed the baseband chip in the iPhone 4S — the Qualcomm MDM6610 — and had licence agreements in place for Samsung patents, these agreements would apply to the iPhone 4S. Cochrane said that Samsung experts would need to see the source code for the iPhone 4S firmware to see how the chip interacts with the rest of the phone to determine whether the company's patent is being infringed.

"Based on the accompanying firmware, [the expert] can tell how the chips are working in the phones," she said. "To form a final view on whether patent 621 is infringed, he needs to see the documents that set out the source code for that firmware."

Moore said that he was waiting for advice from Apple on whether the company would be able to make the code available to Samsung.

Moore ridiculed the whole case in a Melbourne Cup-themed quip, saying that "the horse had already bolted", since the iPhone 4S is already on sale in Australia.

Justice Bennett has set out several hearing dates over the next few weeks to hear the issue, but said that she aims to have evidence provided in short affidavits, expert meetings, a joint report from the two sides and then oral evidence in court to ensure that she can understand what the issues are.

Bennett also admitted to the court that she personally owns both an iPad and a Samsung phone, so she would be "fairly even-handed".

The case continues on Friday.

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