updated 08:00 pm EST, Wed January 2, 2013
Samsung should follow suit with own actions in Europe, ITC told
Apple, in a new filing with the US International Trade Commission, has argued that Samsung should drop all of its US-based court claims for sales injunctions over alleged infringement of "standards-essential patents" (SEPs) as it has done in Europe, using the Galaxy S maker's own claim that such a move is in the "best interest of consumers" against it. Samsung's key offensive tactics in its legal battle with Apple appear to be backfiring.
Just before Christmas, Apple had filed a "Notice of New Facts" with the ITC court. The full commission is studying the preliminary judgement in Samsung's complaint to the ITC over four patents it says Apple is violating. Judge James E. Gildea's initial ITC ruling was almost entirely in favor of Apple, finding that at least one of the four Samsung patents was invalid and that at least two others are eligible for Fair, Reasonable and Non-Discriminatory (FRAND) licensing terms, meaning they shouldn't be available to be used as a basis for sales injunctions.
The "Notice of New Facts" brings Samsung's recent 11th-hour attempt to pull out of its SEP-based injunction claims in Europe -- a move that exposed the company's reversal of position when the European Commission charged the company with anti-competitive behavior for pursuing legal claims on SEPs. The company is facing the possibility of billions in fines if the European Commission is not persuaded to change their initial findings.
In withdrawing its European legal claims, Samsung justified its complete reversal of course by saying that the move was in the best interest of consumers, preserving freedom of choice in the market by ensuring that no Apple products were at risk of being removed from sale while an agreement on the FRAND royalty is worked out. Apple quotes Samsung extensively in its new filing, using the same logic to call for Samsung to withdraw its US cases.
"The admission [that sales bans based on SEPs hurt consumer choice] creates a clear and irreconcilable conflict between Samsung's statements in Europe and its statements to the ITC," Apple's counsel writes in the new filing, which opposes Samsung's response to the initial "Notice of New Facts." As patent case analyst Florian Mueller writes, "it would obviously be in Apple's interest to have Samsung withdraw its ITC complaint (or at least the parts relating to SEPs) but Apple is nevertheless right: it doesn't make sense to pretend to protect consumer choice in one jurisdiction (Europe) ... but continue to push for SEP-based injunctions elsewhere."
Mueller says that connecting SEP-based injunction requests to consumer harm was a "tactical mistake" on Samsung's part, and should the full commission go along with Gildea's initial ruling -- or Samsung withdraw its SEP-based US injunction claims -- the move may have larger implications in a host of other Apple legal battles. Motorola Mobility and its parent company Google have both made injunction cases against Apple based on SEPs, and are both under investigation for it, as such moves may be considered anti-competitive.
While Samsung still has some legal issues with Apple over non-SEP patents, the bulk of the claims against the iPhone maker have revolved around FRAND-eligible patents. Samsung, like Google and Motorola, seeks a royalty percentage seen as too high and selectively applied -- and the legal actions are perceived as being used as bargaining chips, violating the tenets of the FRAND principle. Apple, Microsoft and other tech companies have long favored a "pool" approach to royalties with a total income cap, similar to the way the MPEG-4 standard is implemented through a governing body like MPEG-LA.
In his preliminary ruling, ITC Judge Gildea's only nod to Samsung was in rejecting Apple's FRAND defense, saying the company had not proven it would be a "willing licensee" had any of Samsung's patents been found valid or non-SEP. Apple has asserted simply that it met the burden of its FRAND defenses in its latest filing.
The full ITC review of the matter will be decided on February 6, two and a half weeks later than originally scheduled. It is thought that the European move by Samsung and the facts related to it pointed to by Apple -- along with a number of third-party submissions on how to properly handle FRAND disputes like this one -- are being heavily weighed by the court. The final ruling it hands down can be challenged in the US Court of Appeals.