updated 08:10 am EDT, Mon September 26, 2011
Apple reveals Samsung chip demands
Samsung is holding Apple "hostage" by asking for 2.4 percent on each 3G chip used in the iPad and iPhone, Apple argued in a court hearing in The Hague over Samsung's new counterclaims. Revealing what was supposed to be a confidential term, it said Samsung was deliberately misusing both the royalty rate and the responsibility for its payment to try and oppose Apple's lawsuit, according to Webwereld reporter Andreas Udo de Haes. The company didn't ask for payments at all until 2010, and during talks deliberately violated FRAND (fair, reasonable, and non-discriminatory) licensing terms by excluding Apple from a license for the Qualcomm chipsets used in the CDMA iPhone 4 and, presumably future iPhone models.
In Europe, Apple supposedly already pays Samsung its royalty rate through Intel, which bought Infineon and thus the maker of its current GSM iPhones chipset.
Samsung also allegedly deceived the European Telecommunications Standards Institute (ETSI) as it helped develop 3G standards. The Korean firm slipped its patented technology into the standard but only revealed its work five years later, leading to a "patent ambush," Apple said. Legally, Samsung was obligated to reveal its assertions before standards were finalized and might be in trouble, especially as it was already trying to use what was supposed to be an essential patent for an "excessive" amount.
Rambus was used as an example. The European Commission in 2009 forced it to change its patent policies to prevent such standards-related ambushes in the future, even though it hadn't pressed for including its technology in a standard.
Under French law, where Samsung is also targeting Apple, a judge could force Samsung to use a particular price if talks broke down, although Apple said that hadn't happened yet. Apple maintained that it already had a 'perfect' license in France.
Samsung disputed virtually all the claims and unusually challenged them even before Apple's legal team had made its case, although it was challenged on many of its points. It tried to contend that Apple obscured its component suppliers and that as many as ten companies supplied the 3G chipset for the GSM iPhone; Apple said all the parts were from Intel. Apple supposedly knew the patents existed and should have struck a deal in 2007 for the first iPhone, but it had no intention of getting a license, Samsung said.
Samsung claimed to have made a FRAND offer to Apple but was turned down as Apple didn't believe this fit under FRAND terms. It's unclear if this was the 2.4 percent figure.
While it's unknown how sincere Apple might be, its allegations if true could show Samsung having a weak case. At the least, it's widely known that Samsung sat on the patents and has been selective in enforcing them. The threat of a possible preliminary ban on 3G iPads and iPhones is considered a bargaining chip to counter Apple's successful early ban on Galaxy phones in the Netherlands and possibly other parts of Europe.