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Meanwhile Samsung seeks to make a deal with Apple in Australia

In what could be a small sign that a cross-licensing (and potentially damages) settlement agreement could be at hand in the legal war [1][2][3][4] [5][6][7] between Samsung Electronics Comp., Ltd. (SEO 005930) and Apple, Inc. (AAPL), Apple revealed that is former chief executive had sought out Samsung to discuss a deal, before he initiated the legal war by filing a civil suit against Samsung in Northern California District Court.

I. Did Steve Jobs Try to Cut a Deal with Samsung?

The revelation came, according to international news service Bloomberg, in testimony by Richard Lutton, a senior director at Apple and the company's patent attorney, during a hearing in Australian court.  Apple is seeking to ban sales of Samsung's popular Galaxy 10.1 tablet in Australia, until a final trial decision is handed down in its Australian federal lawsuit against Samsung.  

Samsung has agreed to temporarily delay the release of the tablet in Australia, allowing for the Australian judge to decide whether or not to agree to Apple's request of issuing a preliminary injunction banning Samsung's tablet sales.  The decision was supposed to occur this week.

In testimony, Mr. Lutton painted Apple as the victim, rather than the aggressor in the patent war.  He claims that Apple co-founder and chief executive Steven P. Jobs approached Samsung in July 2010 to try to negotiate with the company.  It is unclear what exactly Apple suggested.  One possibility is that it asked Samsung to stay out of the tablet market -- which would be very unfavorable for Samsung to agree to.  Alternatively, it could have wanted payment for a cross-licensing deal, similar to the deal Samsung recently inked with Microsoft Corp. (MSFT).

Steve Jobs cackling
Steven P. Jobs [Source: AP Photo]

Whatever Mr. Jobs' proposal was, Samsung decided it to be too adversive.  Negotiations between the firms, which Mr. Lutton says did not involve Mr. Jobs (who is facing a health crisis) fell apart shortly thereafter.  Samsung would go on to launch its first tablet -- the Galaxy Tab (7-inch) in September.  The rest, as they say, is history and Samsung and Apple reached their current state of suing each other in at least 23 federal courts or trade agencies in at least 10 countries.

Mr. Lutton did have some kind words for Samsung commenting, "Samsung is an important supplier with whom we have a deep relationship."

Bloomberg says its research data indicates that Samsung is Apple's second largest supplier and that Apple is Samsung's largest electronics component client.

II. Samsung Proposes a Truce

In related news, Samsung's legal chief David Catterns has reportedly proposed a cross-licensing agreement in Australia, which would put the companies' legal conflict behind them -- in one country at least.  The news was first reported by Bloomberg.

The news came shortly after Apple dropped two of patents from the case, patents that it initially planned to pursue infringement claims on.  During the initial filing of the case Apple had claimed Samsung infringed on ten of its patents, then in a later filing it broadened that to a whopping thirteen patents.  But in later court filings, its lead barrister Stephen Burley reduced the number Apple intended to enforce to five.  

In other words Apple may still contend Samsung violates those other patents, it's just not expending resources trying to sue to assert them in court.  This is probably because it thinks they're comprised of weaker claims, which risk being invalidated in court.

Now that number has been cut again.  Apple excluded for unknown reason its patent on touch screen unlocking via a swipe gesture (patent AU 2008100011).  And it also excluded its patent on a bouncing animation when zooming in on a document or icon (patent AU 2009208103, as Samsung agreed to remove this feature from its Australian tablets.

Now only three touch-related patents -- a patent on the manufacturing of a capacitive touch screen used in the iPad 2 and Galaxy Tab 10.1 (patent AU 2005246219), a patent covering selective rejection of inadvertent finger movements on a touch screen (patent AU 2008258177), and a heuristics patent used to correct a user's finger movements when scrolling vertically on a screen (patent AU 2007286532).

Galaxy Tab 10.1, in hand
Apple has reduced its claims against Samsung from 13 to 3. [Source: Android Community]

Apparently Samsung wants to cross-license those patents.  In exchange it will drop its claims agaisnt Apple regarding various wireless patents it owns, which it says Apple's i-devices violate.  The terms of the cross-licensing proposal have not been revealed, so it's unclear whether Samsung would be seeking any additional payments from Apple, or vice-versa as part of the arrangement.

Apple lawyer Steven Burley reportedly said in court that his company would consider the proposal.  Apple will have a bit of time to think it over.  The sides failed to conclude their arguments on time today so the Judge did not rule on whether a preliminary injunction would be issued.  The hearing is set to resume on Oct. 4, after a public holiday in New South Wales.

Federal Court Justice Annabelle Bennett commented, "I can't promise when I’ll make a decision.  I will try to get it out as soon as possible."

A cross-licensing agreement could be a signal of the beginning of an international peacemaking process between Samsung and Apple.  That could allow Apple to retain Samsung as its primary supplier of low-cost, high-quality NAND flash storage.  In recent reports Apple was rumored to be considering a switch to other suppliers, but was expected to take a price, and possibly quality, hit if it did so.

Sources: Bloomberg ("Steve Jobs Started Talks With Samsung ..."), Bloomberg ("Samsung Electronics Gives Apple Proposal...")

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Something seems amiss here...
By Boze on 9/30/2011 5:09:44 PM , Rating: 5
Samsung hasn't had any trouble coming to an accord with other companies in the past; it makes me wonder why they had so much difficulty with Apple.

I can only come to two conclusions:

1. Apple was making unreasonable demands in the negotiations.
2. Apple never actually entered negotiations at all.

Given Apple's prior history with litigation, I really can't see it being #1. Maybe Apple was trying to turn over a new leaf with Samsung, but I doubt it. More likely, if this is true at all, is that Samsung is a powerhouse in the global marketplace, and they can't be litigated to death like some poor startup company. Nor would it have been wise to really piss off a major supplier for one of your hottest products.

No... given Mr. Steven P. Jobs prior history, both times that he's been at the head of Apple, I don't see him as the olive-branch extending type.

RE: Something seems amiss here...
By Ticholo on 9/30/2011 5:19:09 PM , Rating: 5
I'm guessing this was a negotiation in the same sense that gangsters negotiate with their victims.

RE: Something seems amiss here...
By fteoath64 on 10/1/2011 7:02:29 AM , Rating: 5
Agreed. The word negotiation and Jobs does not go together. If Apple intends to negotiate, then they must be prepared to license their patents. There is NO evidence of such an intend.

RE: Something seems amiss here...
By KayDat on 10/2/2011 7:55:17 AM , Rating: 2
Except in this case the 'victim' the gangsters chose was their arms dealer who are large and armed to the teeth.

RE: Something seems amiss here...
By Samus on 10/3/2011 1:35:10 AM , Rating: 2
Reminds me of Homer Simpson 'negotiating' with Bill Gates in Season 9.

RE: Something seems amiss here...
By fic2 on 9/30/2011 5:28:51 PM , Rating: 5
I heard that Apple demanded a healthy pancreas from a virgin.

RE: Something seems amiss here...
By sprockkets on 9/30/2011 5:51:56 PM , Rating: 5
Agreed. I find it rather ironic/stupid that apple has a patent on capactive screens when they make 0 screens themselves and have Samsung make the screens for the ipad2.

F'ing Patent trolls.

RE: Something seems amiss here...
By Ilfirin on 10/1/2011 1:53:38 PM , Rating: 3
That is not patent trolling, that's how just about all technology gets created - a R&D company does the research and development to create the technology and then hires a manufacturing company to manufacture it.

The companies that manufacture lights usually have no patents whatsoever on lighting technology. Likewise the companies that manufacture SSDs don't have the patents on flash memory - I actually worked with one of the main guys involved in inventing flash memory. He did it while he was a grad student at NCSU with several other students, professors and some corporate backing as well (both in money and engineers).

Manufacturing companies, if they have any patents at all, typically only have patents about the efficient manufacturing of the technology.

Manufacturing companies don't normally invent ANYTHING (it's just not part of their business model) and patents go to inventors, not manufacturers.

By sprockkets on 10/1/2011 4:58:47 PM , Rating: 2
Yes, but Samsung IS one of those companies that have R&D themselves.

I doubt Samsung learned how to make their AMOLED screens "Super" from Apple, aka, they did exactly what they patented before it was granted for apple in the original Galaxy phone.

Further, LG makes the iphone screens that are "fused" together closely for the iphone.

RE: Something seems amiss here...
By Helbore on 10/2/2011 6:02:48 PM , Rating: 5
But Apple didn't invent these technologies though R&D. They sure as hell aren't responsible for the existence of capacitative touchscreen technology.

Apple didn't invent any of the technologies they use. They put existing technologies together into a package that was pretty and user-friendly. They should be commended for their efforts in that respect, but they shouldn't be allowed tog et away with claiming they invented things simply because they managed to put existing tech together in a particular compination that sold well.

That's fantastic business planning, but its not invention.

RE: Something seems amiss here...
By HrilL on 10/3/2011 11:22:35 AM , Rating: 2
you sir should get a 6 for your wonderfully worded, thoughtout and truthful comment.

RE: Something seems amiss here...
By Tony Swash on 9/30/11, Rating: -1
RE: Something seems amiss here...
By Horizon79 on 9/30/2011 6:59:02 PM , Rating: 3
Samsung put years of research in their wireless patents. Why don't we hear their arguments too and consider a ban for ipad 2?

RE: Something seems amiss here...
By Tony Swash on 9/30/11, Rating: -1
RE: Something seems amiss here...
By sprockkets on 9/30/2011 8:03:15 PM , Rating: 5
Apple doesn't copy either. Clearly they didn't here

nor with iOS 5's notification system.

Apple also invented the first mp3 player and the first mobile phone. It's true.

RE: Something seems amiss here...
By Gondor on 10/1/2011 5:07:38 AM , Rating: 2
Apple also invented the first mp3 player and the first mobile phone. It's true.

And magic ! Actually they have a patent on magic.

I'm going to get me a patent on "correction of user's finger movements when scrolling horizontally on a screen". Take that Apple !!1oneone!1

RE: Something seems amiss here...
By Tony Swash on 10/1/11, Rating: -1
RE: Something seems amiss here...
By name99 on 10/1/2011 4:15:27 PM , Rating: 1
Apple also invented the first mp3 player and the first mobile phone. It's true.

Has Apple EVER made such a claim? Has any Apple employee ever made such a claim?
No. So why state something so stupid? Are you aware that saying it simply makes you look like a retard?

By sprockkets on 10/1/2011 5:02:08 PM , Rating: 2
Sure, they said it right here:

You really have a broken sarcasm detector.

RE: Something seems amiss here...
By name99 on 10/1/2011 4:12:22 PM , Rating: 3
Samsung put years of research in their wireless patents. Why don't we hear their arguments too and consider a ban for ipad 2?

Because Samsung chose to monetize this research by having it embedded in a standard, which carries with it certain duties regarding allowing EVERYONE to use that research at particular prices (FRAND terms).

This was SAMSUNG's choice --- they COULD have chosen to keep that research private to Samsung, and tried to monetize it some other way. They felt (quite likely correctly) that making a small amount of money on billions of units was a better choice than making lots of money on millions of units. BUT, once they made that choice, they have to live with it.

Once again, this is not a morality play; it is about business strategies, not about good vs evil.

RE: Something seems amiss here...
By damianrobertjones on 10/1/2011 1:47:21 PM , Rating: 2
"Apple put years of development into iOS and it's first release was very polished and feature complete for a version "

Seriously... no. Windows mobile had more features at that point in time.

RE: Something seems amiss here...
By evo slevven on 10/1/2011 4:10:50 PM , Rating: 3
I won't argue that Apple put years into development into their iOS but their approach to the patent process are ethically horrendous! You can throw the "any big company would do it" argument but if we take your approach to be true, I would expect to see Sony, LG, Panasonic and Samsung patenting a "thin TV" and ignoring the fact that market forces deem a "thin TV desirable".

How one patents a "fat iPad" design and never actually uses it and maintains a lawsuit on the basis of producing a "thin iPad" and patent for a "fat iPad" is really a front to what the patent process is made to protect. Their desire to patent multi-touch technology in all shapes and forms is equally on par with their past claims.

I approve of patenting of the technology but not of patenting one variation of multi-touch and expanding that technology to essentially invalidate all other forms of multi-touch technology.

That's the biggest reason why I would argue most consumers are quite upset with Apple. As Steve jobs once said "great artists steal" and that is what Apple is in fact doing. I remember when in the US the Japanese car market came in and simply made better, more fuel efficient cars and the car companies and the lawmakers they supported did everything they could to fend off Japanese imports of cars. Android, regardless of whatever metric you use, is eating at iOS and rapidly.

Apple is now like the US automakers in the 80's complaining about Japanese cars; instead of focusing on their product a bit more, their trying to focus on changing public law and opinion to their side. And if you need evidence of their desire to "not focus" on their product, switching to an inferior chip and touch screen for a more costly iPhone to avoid Samsung is all I'd need to point out. A pricier phone with less powerful hardware.

RE: Something seems amiss here...
By Tony Swash on 10/1/11, Rating: -1
RE: Something seems amiss here...
By Onimuto on 10/3/2011 10:18:12 AM , Rating: 1
Hardware matters alot. If it didn't then why does apple change the hardware in the phone dam near every year. Could it be because other manufactures do and apple doesn't want to look like complete shit with their offering? And pc lost since when pc lost are you High on LSD ecstasy and hash combined ? And don't give me the whole market moving to moblie shit even idots who buy tablets still own notebook pcs (this includes Mac idot ,you do understand apple computers knowen as Mac book pros are personal computers right?). Pcs aren't going anywhere . youll come up with some twisted shit to claim other wise. You spout wired hobby for hardware, nice to know you are one of the idot consumers. People who don't do research before buying are idots. Just like those who buy for Looks over function.
IOS feature rich huh. Really it is since when ?
My first $700 iPhone what the calling it now the 2g lol
Featureless untill I jailbroken it and to save time typin on this iPhone 4 I now own. iOS 1-4 useless as tits on a boar hog untill it was jailbroken. And what you'll say only tech people care about that. wRong I can't even keep track how many times some brainless person who bought an iPhone because thier friend had on becomes so jelly over the shit I can do on my phone which leads to me jailbreaking thief phone. Prime examples
Mms , video camra , copy paste, download videos, download music, custom icons start up screens ECt , modified picture folders , the list goes on from ios1-4
Note Tony these were the tyipcal brain dead consumer apple thrives on. Not a techy which I guess
I would be considered. Apple
Thrives of the jailbreaking
Community just like it does with dolphin and Linux. In which apple
Copies everything but hey it's apple so it's ok the double standard say no one else can says the lord Steve jobs. Apple
Gave bullshit about
Mms even tried to scapegoat AT&T for it. Took a 19Year old kid less then a week to get it functioning. Apple claimed it was complex to bring
Mms really it was ?
Copy paste high tech shut another colledge kid gives us this
Through jail breaking. I could continue all day long
On this alone. I already have iOS5. Guess what still need to jailbreak it and 23 programs to get the thing to function feature "rich". And all the features I use those drain dead consumers love. Don't have to be a tech to want what's good. Even the brain dead consumers want features apple still withholds in ios5. Spring board settings, quick camera, quick mms (that doesn't take you out the program you are using to respond to your mms/SMS) list goes on. Ya ya grammar nazi me becuase I said brain dead consumer so much.
Post on my jailbroken iPhone 4 32 gig black.

RE: Something seems amiss here...
By Helbore on 10/2/2011 6:12:00 PM , Rating: 1
I think that is because Apple is not looking for what most other companies are looking for.

Apple doesn't want licence income.

Apple doesn't want to swap licences unless it absolutely has to and then if it can do so on favourable terms (but it really doesn't want to).

Absolutely right. what Apple want is to drive all competition out of the market, so they can have a monopoly control. The reason they want this is because their strict control, walled-garden approach has failed to maintain dominance of the market in the past. They know it is at risk of being overwhelmed by open platform products again.

As a company that thrives on the position of "low market share, high profit margin," Apple is always conerened about fluctuations in its market share. Where minor fluctuations in market share can be easily absorbed by companies with a "large share, low margin" approach, Apple is always at risk from small changes in their sales. A small drop in sales means a large drop in profits.

Consequently, it is in their best interests to keep the competition to a minimum. The more competition, the more chance of their market share fluctuating at every product release. What is immensely high now could become unsustainably poor in one generation is the market shifts against them. They can't risk that - hence the need to try and litigate all potential competition out of the market.

RE: Something seems amiss here...
By Tony Swash on 10/2/11, Rating: -1
RE: Something seems amiss here...
By Helbore on 10/3/2011 5:52:37 AM , Rating: 2
Why is it you turn everything into a schoolground "us vs. them" slagging match? You really ought to grow up and dispense with the "Apple is making you run scared" stupidity.

I didn't even say that Apple were doomed, but that's what you read into my post - simply because you see anything anti-Apple and assume.

Your the one who needs to get a grip, calm down and actually READ what people are saying, extrapolate the point from the post and comment accordingly. Otherwise you end up coming off like a rambling Apple fanboy.

RE: Something seems amiss here...
By ApfDaMan on 10/1/2011 7:09:22 AM , Rating: 2
Microsoft got $10-15 per android phone off Samsung, makes me wonder what Apple asked for.

RE: Something seems amiss here...
By Tony Swash on 10/2/11, Rating: -1
"My sex life is pretty good" -- Steve Jobs' random musings during the 2010 D8 conference

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