Samsung and the EU

by Charlie Rothbart on 2 February 2012

In my last post I discussed the ongoing litigations between Apple and Samsung, specifically in relation to  standards-essential patents.

It has now been announced that the EU Commission has launched a formal investigation into the 3G licensing practices of Samsung and the alleged contravention of the “irrevocable commitment it made to the European Telecommunications Standards Institute (ETSI).”

The Agreement on Trade Related Aspects of Intellectual Property (TRIPS) requires signatory states to ensure that their national patent legislation obliges patent rights holders to license, on fair, reasonable and non-discriminatory terms (FRAND) their standard-essential patents.

Yet Samsung has asserted a standard-essential 3G patent against Apple, and as a result the Commission is investigating to ascertain whether this is an anti-competitive practice in contravention of Article 102 EU, which prevents the distortion of the common market by an abuse of an entity in a dominant position.

A notable feature of this investigation is that it was not (apparently, or at least publicly) requested by Apple, which is the usual sequence of events in circumstances such as these: the Commission is acting entirely on its own initiative.

The instigation of this investigation demonstrates to the commercial world that the mechanisms in place to protect the consumer and to further the aims of the EU Treaties in maintaining the single Community market really do have teeth. Whether Samsung will be bitten remains to be seen, although it is hard to see how it can be avoided.

As yet, Samsung has not commented on the news, and it remains to be seen if the parties even attempted to negotiate a licence in line with the FRAND obligations.

For the telecommunication industry, lawyers, patent attorneys and policy makers alike, this will be an interesting process to watch, and one which could have significant implications for FRAND, competition law and the plethora of patent litigation that is currently battering the telecommunications market.

 

 

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2012: Our Predictions for the Year Ahead

by Charlie Rothbart on 4 January 2012

Now that the holiday season is well and truly behind us and we are all making (and often, breaking) our usual resolutions to eat less, drink less, exercise more, and generally be better human beings, we are presented with an opportunity to glance ahead into the coming year and think about what we expect to see in 2012 (if, like me, you do not believe the Apocalypse rumours).

2011 will be the year that remembers patent wars in the telecommunications industry as being rife, with patents viewed globally as an increasingly large and unnecessary barrier to innovation and commercial competition. But we expect that this pattern will continue throughout 2012, especially with the commercialisation of new technologies, such as the rolling out of 4G, which is likely to bring a whole new wave of litigation with a new cast of actors (and probably some of the old cast too).

New Technologies

Apart from the implementation of 4G, what else can we expect to see in 2012?

IBM recently predicted that by 2017, passwords as a primary means of access will be rendered obsolete:

“Devices to authenticate your identity by biometric means will become commonplace in the next five years and passwords will become a thing of the past.”

IBM also predicts that the use of mind control (to operate machinery, as opposed to main-streaming Jedi Mind Tricks) will also begin to soar over the next 5 years. If this is the case, one can expect players in these technological fields to be producing and possibly enforcing vast amounts of mind-control-related IP during 2012.

Of course, no Predictions-About-the-Coming-Year post would be complete without a mention of the Olympics, which is coming to London this summer. Not surprisingly, innovation and IP even got a mention from BBC’s Phil Fearnley, general manager at BBC Future Media. In The Guardian, Phil has promised that

“Viewers will see innovations in the way IP and broadcast streams and the way data and video will interact.”

and that

“The Olympic Games in London in 2012 will be remembered as the first truly digital Olympics.”

We will also see the rise (or demise) of the ultrabook this year, with Intel pushing hard to revolutionise the laptop and PC market in the age of the tablet. We expect some interesting, game-changing technologies to be revealed along the way.

Policy

Having seen patent ‘reform’ in the US in the shape of the America Invents Act, and the Hargreaves Review in the UK (a process mainly focusing on copyright which is still on-going), one can expect that the piles and piles of patent litigation suits between the likes of Google, Oracle, Samsung, HTC and Apple, to name but a few, will only increase the pressure on policy makers to step-up the pace of review of patent laws, on both sides of the Atlantic.

On this side of the Atlantic, much closer to home – at least it is if you don’t listen to President Sarkozy – is the potentially imminent birth of the EU patent. The Legal Affairs Committee in December gave its approval for the “EU Patent Package”, which includes a unitary patent, a new language regime and a unified patent court. Despite the teething problems which often follow any newly created judicial process, this activity is likely to keep IP firmly in the main stream press during 2012.

 

Litigation and the Focus on IP

Of course, the Samsung and Apple litigation is set to continue well into 2012, as will the Android-related litigation between HTC, Samsung et al., which is likely to keep the attention of the mainstream press fixed firmly on patents for some time.

For me, one of the most interesting cases to watch in 2012, which has spilled over from 2011, is  Oracle v Google. The outcome of this litigation could see Google’s Android partners having to pay significant licensing fees to Oracle, or Google may be forced to re-write the Android platform to avoid Java patents. Either outcome would cause a significant stir for Google and manufacturers of Android phones and tablets, not to mention the world of IP. This is of course assuming that Oracle is victorious, which may well not be the case.

 

2012′s Winners and Losers

2011 was a tough year for some of the biggest names. We expect the likes of Apple and Google to continue on their trajectory for world domination without too many snags along the way, but Nokia and RIM are examples of companies to keep a concerned eye on this year.

  • Can Nokia’s Symbian continue to contribute to the balance sheet?
  • Will 2012 see RIM finally RIP?
  • And how will Microsoft prevail in the mobile market with Windows 8 when it is up against the ever-growing Android and the so-far-unstoppable iOS?

It is true to say that the most reliable prediction for 2012 is that it is going to be a very interesting year for us here at Tangible IP…

As IP professionals, we are ever hopeful that the commercial world will start to notice on a much broader scale the value and importance of IP to business. During 2012, we will keep on promoting the value of IP strategies and helping our clients realise the maximum value possible from their IP and other intangible assets, whilst patiently waiting for the proverbial light to come on above the opportunities most are missing out on by over-looking their IP.

We hope that the continuing and increasing attention of the main stream press on patents and infringement litigation in the telecommunications industry will eventually serve as a catalyst for IP and turn the attention it receives at board level from being not just a cause for concern, but a valuable commercial asset.

But for now, we wish you all a very happy and prosperous New Year. Let the journey begin.

 

 

 

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Apple, Samsung, and Antitrust

by Charlie Rothbart on 1 December 2011

It has been announced today that Samsung has had its first little victory over Apple, with the ban on Samsung’s sale of tablets in Australia being overturned. This could be very good news for Samsung, especially if it manages to get the product back on the shelves in time for the Christmas rush.

A stay has been granted until Friday, in which time Apple can appeal the decision, although whether or not it will do so remains to be seen.

Samsung is now hoping that this decision will pave the way for other jurisdictions to follow suit, and that the German courts will also lift the injunction it imposed against Samsung.

This case could have significant influence over the way in which standards-essential patents can be used in the future. OK, Samsung’s bans have been in relation to infringement of less fundamental technology, but the battle has highlighted to the world the dangers of patents being used to block competitors in the market where the patents relate to technology essential to the market as a whole.

The ITC and the EU have both started antitrust probes, with the EU Commission issuing RFIs to both companies last month. The investigation appears to be more of a threat to Samsung, as it is only Samsung asserting standards-essential patents in this instance. However, although there are rumours that Samsung refused to negotiate a licence with Apple before this litigious period began, there is a risk that Apple could also be fined for not taking a licence under FRAND.

Having said all of that, so far Samsung has been unsuccessful in stopping Apple, so whether it can really be said that these patents are being asserted with anticompetitive outcomes is questionable.

We will know more further down the line. Antitrust investigations can take several years, and if the RFIs are still being completed, it is very early days and nothing will be made public at this stage.

Rather than keeping an eye on who does and does not get fined, it will be more interesting to watch the impact this litigation and investigation has on the future of standards-essential patents, FRAND, and patent litigation in the telecommunications market in general.

 

 

 

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The smartphone battle: Apple v Samsung – What does it all mean?

by Charlie Rothbart on 25 November 2011

In my last post I mentioned the number of questions raised by this on-going battle between Apple and Samsung. This post will outline what some of these questions are.

1. What’s Going On?

We all know what this fight is about in terms of IP infringement, but what is it really all about? Can it really be as simple as two massively successful companies bickering and spending millions (potentially billions?) in legal fees, over products that look similar?

I mean, let’s face it, one could argue that all phones and tablets look the same on some level. If you ask people of my grandparents’ (and parents’) generation, I would bet that the vast majority would not be able to tell one from another. (This obviously does not apply to the most tech savvy of that generation, and this comment does not intend to offend or be ageist in any way…)

But the point is this: why would two companies, both of which rely on the other at some point in their respective supply chains, target one another to such a relentless extent?

It has been reported that Samsung had an informal policy not to sue Apple, but abandoned this approach after Apple launched its first infringement suit against Samsung in April 2011. And it is widely believed that Apple generally takes a non-aggressive approach when it comes to suing others for IP infringement.

All of this leads me to the conclusion that there must be something else going on here. Is this about locking a competitor out of the market (if so, the ITC and EU anti-trust probes are likely to put a stop to this – more later) or does this go deeper?

It has been revealed since Steve Jobs passed away last month that he had sworn to “destroy Android”, aiming his onslaught specifically at HTC; however, perhaps this fight with Samsung has been a back-handed way of causing another Android smartphone manufacturer problems. It would certainly make sense as Samsung was said to have overtaken Apple in smartphone sales earlier this year.

One thing that just doesn’t sit right about this theory, however, is why two companies would spend so much time, effort and money on this. Would the funds not be better invested in technological development?

Apple specifically is renowned for being a retailer; it was one of the most popular online retailers in the UK this year, second only to Amazon. Perhaps part of the image Apple has of being consumer-centric is what lies behind Apple’s determination to stop similar looking products being produced by Samsung?

Having said that, if you go to any online store and browse the variety of tablets, one could argue that they all look really quite similar (at least in respects of the European patent described in the last post)…

2. What effect is this having on IP law and policy?

This situation does nothing to temper those arguments that IP prohibits rather than promotes innovation. Especially now that IP is featuring so much more in the mainstream press; it a shame that such negative connotations are being inferred by battles like this.

Although usually I am in the camp that favours IP and believes that it does further innovation, in this case I would argue that innovation is being hampered: not because of IP, but because of the way IP is being enforced. If Samsung and Apple got around a table, hashed out some cross-licensing deal and invested the rest of the cash reserved for legal expenses into R&D, innovation would be furthered.Instead, they are both pouring the cash into legal representation and court fees and at the same time drawing the attention of the worldwide public (who most likely are thinking that their favourite brands are not living up to expectations), and making IP look like the ugly sisters preventing Cinderella from going to the ball.

 

It has been said that Apple attempted negotiations with Samsung right at the beginning of this debacle, but that Samsung was not willing to play ball. Whether or not this is true I don’t know, but if it is the case it is not going to look good for Samsung in court, under the FRAND licensing rules.

And it is in relation to FRAND that the ITC and EU anti-trust probes have been instigated. The EU probe was started on their “own initiative”, to look at the way standard-essential patents (as owned by Samsung, not Apple) are being used/abused in this battle.

This could be the defining aspect of this litigation: Apple is already succeeding in obtaining injunctions against the sale of Samsung products, whilst Samsung has so far failed to stop iPhones and iPad sales. The fact that the nub of Samsung’s claims lie in 3G-related patents, the most important of which were declared by Samsung as standard-essential, could be Samsung’s downfall in this case.

By definition, Apple has a right to use these patents in its technology. Samsung has an obligation to license the patents. If I had to put my money on one party ‘winning’ this tussle, I would be backing Apple.

I say ‘winning’ – I’m not sure whether it can be said that either party will be a ‘winner’, but litigation eventually has to go in favour of one party…

3. What’s next?

Only time will tell whether there will be more suits filed in more countries, although my suspicions are that having already filed in the major jurisdictions, the focus now will be on seeing the current lawsuits through to some kind of an end. Whether this is going to be a cross-licensing arrangement or not, it is hard to say, although I think it is going to be hard for Samsung to avoid granting any licences at all.

The outcome of the anti-trust probes is going to be an interesting one to watch. It is also feels as if this case/these cases could be pivotal in the telecoms patent litigation story. Whether this is true or not will only be ascertained after it is over, but what is certain is that the world is watching this one like a hawk. Whatever the outcome, it is going to shape the way the mainstream media view and report on IP in the near future.

For Samsung, it seems, rightly or wrongly, that their smartphone and tablets look too similar to Apple products, which is something that is not too difficult to rectify. For Apple, if they are found to be infringing patents which have been declared standards-essential, they will be relieved to be granted compulsory licences by Samsung, even if only on the instruction of the courts.

For me, it would make much more sense to invest at least some of the money which is earmarked for the lawyers into developing their 4G technologies and moving forward from this.

As comfort to Apple, I am not convinced that it matters too much if other products look like Apple products: there is always a loyal following queueing up outside Apple’s stores the night before a new product release. How many others can say that? I know that Samsung can’t. And these people (and others that are perhaps less crazy, but still fans of Apple products) will select Apple again and again, even if there is a product on the market, similar in look and feel, that costs half the price.

And no matter how hard Samsung or others try, that kind of thing just cannot be copied.

 

 

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The Apple v Samsung Patent War

by Charlie Rothbart on 23 November 2011

Introduction

Apple and Samsung are now 7 months in to their own chapter in what was coined by The Economist in October 2010 as the Great Patent Battle. The market heavyweights are now embroiled in litigation over their smartphones and tablets in 9 countries worldwide: US (District of California), Netherlands, Japan, Germany, South Korea, UK, Australia, France and Italy.

To the inward looking consumer, the battle feels more like a tit-for-tat argument than an outright attack on operability, although Apple has succeeded in obtaining injunctions against the sale of Samsung Galaxy products where Samsung has failed (at least so far) to restrict the sale of the iPhone.

So what is it all about, and why is Samsung currently being prohibited where Apple is managing to avoid court sanctions?

Many questions arise from this battle (which is actually to do with a wider variety of  intellectual property than just patents – let’s call it the IP War), some of which we will address later, but first let’s look at the IP that is at the heart of the litigation(s).

Intellectual Property

The brawling started back in April 2011 when Apple filed suit against Samsung in the US, claiming that the Samsung’s smartphones and tablets “slavishly copied” Apple’s iPhone and iPad designs. The relevant IP alleged to have been infringed involved trademarks (relating to icons for Apps), 3 design patents (D618,677, D593,087 and D504,899) relating to the user interface and the shape of the device, as well as a European patent (EP2,059,868) which covers the method of scrolling on the device – also a patent granted to Apple in the US – amongst (many) others.

For more information regarding the patents involved, Foss Patents has produced a thorough account including the citation numbers of the design patents, utility patents and trademarks at the heart of the claims.

It wasn’t long before Samsung fought back, counter-claiming that Apple infringed patents owned by Samsung relating to the user interface (including methods of displaying information on the screen, customising the home screen, as well as, rather pettily,  the icon that is displayed when the phone is in airplane mode).

Although all of the claims thus far are clearly disruptive, one wouldn’t imagine that they are too hard to work around (which potentially would not be as expensive a pursuit as litigating in multiple countries). In fact, Samsung has in the last week revealed its newly designed tablet, aimed at avoiding the sales ban imposed by the courts in Germany.

The claims which should be more damaging in this fight, are those that relate to the 3G technology such as the high speed packet access patent (owned by Samsung) and other patents relating to the operation of the devices. It seems that Samsung has the upper hand here, with more patents in these areas in its artillery, however as yet not one sanction has been imposed against Apple. Perhaps as soon as this happens, the negotiations will be able to re-open to discuss cross-licensing. Or perhaps this is not the intention of either party.

As it stands today,  it looks as if this fight is set to continue. It was announced today that the hearing in Australia has been scheduled for March 2012. Who knows what else might raise its head between now and then.

As an aside, which is not really at the crux of this post, but that caught my eye and made me smile, is Samsung’s defence to the alleged infringement of the ’899 patent; Samsung have cited Stanley Kubrick’s 1968 film 2001: A Space Odyssey as prior art. Apparently, in the film, a “device” is shown (quotation marks are used here to highlight that being a science fiction film, it wasn’t really a ‘device’…) which much like the Apple and Samsung tablets, has an overall rectangular shape with a dominant display screen, narrow borders, a predominantly flat front and back surface, and a thin “form factor”.

So Samsung is alleging that Apple has actually copied the design of the iPad from Kubrick. Whatever your thoughts about this argument, you have to admit it is an interesting defence. I wonder whether LG now have to watch out with the design of their thinnest TVs??

Anyway. Moving swiftly on…

Questions

This battle raises a lot of questions about many different aspects of both IP law and practise, the market within which Apple and Samsung operate, and the respective parties’ strategies. What could/should they be doing to better deal with this brawl?

The next post will address these questions in more detail and pose some answers as to what we at Tangible IP think is really going on.

 

 

 

 

 

 

 

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Steve

by Andrew Watson on 6 October 2011

It is a very sad day for everyone involved with ipVA and the technology world. Steve (like Bill) deserves and earned the right to be referred to by his first name only. No surname needed.

That alone generates a familiarity that makes someone like me feel like I knew him well even though I have only heard about him anecdotally. Like he’s a good friend, an influence, a coach or mentor.

Some of the best people I’ve met, those that leave the deepest mark, seem to have that ability to make even a group and anonymous experience feel deeply personal. The amazing Emily Bell, a yoga teacher at Studio 42 in Reading has it. I saw Tony Bennett at the Palladium on Monday. At 85 he can’t quite complete his 360 degree spins any more but his talent and modesty made it intensely personal. He has it.

And Steve had it, in fact has it. His legacy is an organisation that has rewritten the rules so many times, but done it the right way, that every time I walk into an Apple store it feels like Steve’s personality is all over every iPhone, iPad, i everything that I trust to purchase from people who make shopping a semi-erotic experience.

Unlimited respect Steve. Like Emily and Tony, you touched my soul and make me aspire to be better.

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Oracle v SAP

by Charlie Rothbart on 5 September 2011

Back in November 2010, Oracle succeeded in its copyright infringement lawsuit against SAP in Oakland, CA. The decision was not exactly significant, as SAP admitted liability for infringing Oracle’s copyrighted software with its TomorrowNow initiative, which had been shut down in 2008 as a result of the lawsuit.

SAP’s TomorrowNow had a program which allowed for the automation of software downloads from Oracle’s customer-service websites, which, according to some of the evidence heard at trial, even once caused Oracle’s computer systems to crash.

The Californian jury awarded Oracle a whopping $1.3 billion in damages after an 11 day trial, which according to Bloomberg was not only the largest award ever given for copyright infringement and the largest given by any US jury in 2010, but also equal to the Q4 net income of SAP.

Excessive?

Many would say it was, and that most IP infringement awards generally are, and it would seem that U.S. District Judge Phyllis Hamilton has reached the same conclusion as those on the less-dramatic side of the damages line, saying that “The verdict grossly exceeded the actual harm to Oracle” and the award was “contrary to the weight of the evidence, and was grossly excessive.”

I tend to agree with Judge  Hamilton. (And I will do my best to refrain from making any comments about the pragmatism of her decision being anything to do with the fact that she’s a ‘she’… although it may well deserve a small mention?)

The reason for Judge Hamilton’s decision to reduce the maximum figure SAP has to pay to $272 million makes a lot of sense. It was found that the previous award was not proportionate to the actual damage to Oracle, and that based on the evidence, Oracle was seeking damages for lost licensing royalties. In reality, though, would Oracle have ever granted SAP a licence had it asked for one, bearing in mind that SAP is one of its biggest competitors in business-management software?

I’ll leave that as a rhetorical question. It suffices to say that Oracle has never really been known for its philanthropic nature, but then again it would have to be a strategic decision to license core business to a competitor, so one could easily forgive Oracle in these circumstances for not doing so (in the theoretical world where SAP actually approached Oracle seeking a licence). But it follows naturally that SAP should not have to pay damages based on a hypothetical licence.

Oracle now has until the end of September to accept Judge Hamilton’s ruling. Whether this will this mark the beginning of a more pragmatic and realistic approach by the courts to infringement damages, only time will tell, but the significant reduction by Judge Hamilton from the original award of $1.3 billion to a maximum of $272 million is a good step in the right direction.

 

 

 

 

 

 

 

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Apple Samsung spat goes Apple’s way in Germany

by Andrew Watson on 28 August 2011

It is a delight to wake up on a Sunday morning and scout around the mainstream press for more IP news. Good also to see Florian Mueller at FOSS patents getting good exposure and giving insightful comments on both the BBC and this article in the Guardian on the Apple and Samsung spat.

http://www.guardian.co.uk/technology/2011/aug/26/apple-wins-ban-samsung-galaxy

Without trying to judge the IP rights and wrongs of this spat, I try to explain it in laymans terms along these lines, remembering that Samsung is a major and important supplier to Apple so this litigation series should only have been taken after a lot of considered thought and senior level approval inside Apple. In fact, imagine the management team level debate between Jobs, the creator, and Cook, the operations and supply chain guru. The chairman opens the discussion.

“so, we have this paper from group legal to start worldwide patent infringement proceedings against Samsung. Steve, your thoughts?”

“for me it’s simple” says Jobs…”the iPad was conceived at the same time as the iPhone in 2003. We were the first since Microsoft with its original tablet to conceive of the tablet being the next big thing. Design put 25000 man days into creating an awesome user experience. We protected what we thought were the original and unique design features. This wasn’t easy with what had come before but we filed two dozen patent applications. This was a new baby we’d created. Samsung and others are jumping on our success. If we don’t enforce our rights, what’s the point in having them? Yes I realise that Samsung is a key supplier but I would have expected more from them. We are a key customer too. If we have a corporate fall out so be it. If we don’t take that risk then every time we change the rules of the game, we will lose respect from the market. So the proposal has my support…”

Chairman..”Tim?”

“this is not as simple to me. I respect Steve’s views but I fear that we will suffer at a corporate level in Samsung. They’re a key A list supplier. They are replaceable but not easily. So although I support it, I want to proceed with caution. I want to call our contacts on the chip supply side to explain our position and to ask for their support. I also think we should be very aware of our end game here. We should get Samsung to take a license and we should be prepared to grant one. Let’s leave lots of room to negotiate. There’s too much at stake otherwise..”

Chair..”I think we have a decision team. It’s a go but with caution…”

I hadn’t thought about it until I started typing but imagine a Tim Cook led discussion. Same outcome? Maybe not.

The Guardian also has an excellent profile of Steve Jobs this morning. I know I can’t hide it but I’m a big admirer. Even moreso when reading about how grizzly and determined he can be to get his way. I’m not sure that this week’s step down as CEO is as big a thing as the markets suggest. Stepping down as CEO doesn’t mean he’s out altogether. Expect him to still be influencing Apple’s direction for a long time and it’s corporate values and principles longer still.

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Trolls hit small app developers….Google really should step in

by Andrew Watson on 27 August 2011

The Beeb seems to be following its software patents are all bad trend with an article showing the extent to which Lodsys threats are touching even small app developers using the Android platform.

http://www.bbc.co.uk/news/mobile/technology-14682700

Google’s “not our problem” stance is wearing a lot thin. Key question… What is Google’s purpose in promoting Android? Answer, just like everything Google does, to drive ad revenues. Implication, Google makes tons of indirect revenues from Android usage and adoption. Rational and honest response from Google..how can we help. Current response…not our problem, whether you are HTC or a small app developer, not we repeat, not, our problem. Yes maybe we should have told you this might happen, but this is buyer beware territory and we are not getting involved. It’s not our fault, it’s those nasty big corporates and illegitimate trolls using their IP rights to beat up poor innocent Google.

Ultimate end game. Somebody somewhere is going to see through Google’s stance and shout not fair. Google beware, we think you are treading a very fine line.

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Now that’s what I call a break fee!

by Andrew Watson on 23 August 2011

Widespread reports over the past 48 hours that Google must pay a $2.5bn break fee to MM if the deal does not proceed. It is reported to be the largest break fee negotiated. It surely is a monster. It does appear that whatever Google finds in the coming months it is still half pregnant with this purchase. Hope there is no member of the Google legal team wondering about whether he/she should have asked for copies of the cross licenses. Or someone in MM’s licensing group wondering if maybe those files marked highly confidential, only for disclosure in the licensing group, should have been requested and wondering if Google really knows what is doing. Or maybe I don’t hope for that.

Ps for those not familiar, there is no such thing as half pregnant. You are or you’re not.

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