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Apple, Samsung continuing to negotiate over legal fights

updated 10:00 pm EDT, Fri July 19, 2013

Report says companies may have been close to a deal last February

A new report says that Apple and Samsung have continued to hold talks in the hopes of reaching legal settlements on their numerous complaints with each other, including high-level private meetings in Seoul late last year. Talks are ongoing, but there is no sign of an imminent settlement, unnamed sources familiar with the matter told the Wall Street Journal. According to some redacted documents filed as part of one of the US ITC cases, the sticking point appears to be Samsung's push for a "universal" cross-licensing deal.

Such a deal would give Samsung a huge advantage, as it has been the loser in nearly every case involving the two companies. It has been repeatedly found guilty of copying or infringing on Apple patents and designs, including a $1 billion judgement in a jury trial last year (a portion of which is being recalculated, but may not significantly change the final amount awarded).

Though Apple has also been ruled to be infringing on some Samsung patents, in all of those cases the patents are standards-essential and FRAND-eligible, which most courts have argued shouldn't be subject to lawsuits except in extreme cases. Apple has never sued Samsung or any other company over standards-essential patents.

Even the ruling against Apple most recently by the US ITC -- which was a near-total reversal of its own initial finding -- that resulted in an injunction order was hypocritical by the ITC's own standards, and is thought unlikely to survive an appeal by Apple. The Obama Administration may also veto the embargo, which could affect iPhone 4 and iPad 2 with cellular models, but hasn't done so thus far (and only has about three weeks remaining).

According to the report in the Wall Street Journal, the two companies were closer to an agreement back in February, but talks have cooled since then. Apple is said to be uninterested in a broad cross-licensing agreement, such it has with Microsoft and Nokia. It prefers a series of separate deals, presumably where Samsung would pay to license Apple patents it has or is likely to have infringed. Apple is likely to stick to its guns on its position that standards-essential patents must be licensed at Fair, Reasonable and Non-Discriminatory (FRAND) rates, but may show its rival and supplier some flexibility in licensing non-FRAND patents.

Both companies, the Journal notes, have reason to settle. While staunch legal rivals over patents, the two companies continue to work together on a variety of levels, with Samsung being one of Apple's most consistent supply partners in providing components for many of Apple's products, from displays to memory to processors. Though Apple has diversified its supplier lineup since the legal issues broke out, it is not seen to be abandoning Samsung as a supplier anytime soon, and was even said to have signed a deal to have Samsung produce a future Apple A-series processor.

Apple once offered Samsung a blanket license of its patents back in 2010, when the company was still being run by former CEO and co-founder Steve Jobs. At the time, the terms were that Samsung would pay Apple $30 per handset and $40 per tablet. Samsung refused the offer and made a counter offer on its own patents, but Apple rejected the deal (and continues to fight in court) over the rate, which was seen as violating the FRAND principles. Apple again tried to settle differences with Samsung immediately after its big win in the California trial, but still could not come to an agreement.

Even more serious negotiations are said to have taken place early in 2013, from about December of 2012 until March. Representatives of the two giants had gotten as far as producing a proposal for a deal, termed a "memorandum of understanding" that was reviewed by senior executives at both companies. The talks cooled shortly thereafter, according to reports.



By Electronista Staff
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