Samsung pulls FRAND rug from under Apple

Apple is seeking to establish that it was extraordinary for Samsung to not directly license 3G technology under fair, reasonable and non-discriminatory (FRAND) terms.
Written by Josh Taylor, Contributor

Apple is seeking to establish that it was extraordinary for Samsung to not directly license 3G technology under fair, reasonable and non-discriminatory (FRAND) terms.

Samsung took Apple to court late last year over whether a number of devices from the Cupertino tech giant, including the iPhone 4 and the iPad, breach Samsung-held 3G patents. In an interlocutory hearing for the case this morning, Apple sought to obtain documentation from Samsung dating back to 2002, relating to Samsung licensing its 3G UMTS patents, which fall under the FRAND terms, to device manufacturers.

Apple is seeking to prove that Samsung previously licensed these patents without much fuss, and that it was very extraordinary to deny the same licences to Apple on what it considered to be reasonable terms. Samsung counsel Ian Wylie, on the other hand, said that Apple was asking for a lot of material that was not relevant to the case.

"What Apple is seeking to inquire is circumstances concerning any declared essential patents going back way prior to the relevant declarations, which would require an inquiry into quite different conduct between quite different parties," he said.

Justice Annabel Bennett came to a compromise, and settled on Samsung providing information dating back to release 6 of the UMTS standard in 2004.

"Apple are saying that you're not offering a FRAND licence. Your defence is what you're offering to Apple is reasonable under the circumstances. There has to be a basis for an analysis [for] Apple to determine whether that there is a fair and reasonable royalty rate," Bennett said.

Apple had sought to obtain evidence relating to agreements with other companies or proposed agreements with other companies that then fell through. This again was too much, according to Samsung.

"There are practical consequences to going this far in this discovery," he said, adding that there would also be commercial sensitivities for the organisations that Samsung had negotiated with.

Bennett settled that Apple could seek information relating to licensing or cross-licensing of standards by Samsung.

Under European Telecommunications Standards Institute (ETSI) agreements for the standards, Apple counsel Cameron Moore said that Apple believed Samsung would be obligated to license the patents on FRAND terms. Samsung had effectively pulled the rug out from under Apple after Apple had invested money in developing technology that might use these patents.

"Samsung says, 'we're always prepared to talk to people and prepared to reach an agreement', but [we do] not always do so," Wylie said.

Wylie said that Samsung was "under an obligation to offer and negotiate" under FRAND, but did not have an obligation to license if those negotiations fell through.

The European Commission has stated that Samsung has an "irrevocable commitment" to license any standard essential patents relating to European mobile telephony standards on FRAND terms, and is currently investigating whether Samsung is being anti-competitive in its legal action against Apple.

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