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Disclosure could give Samsung leverage when bargaining with Apple, help it stay ahead

When it comes to sales only one Android OEM has passed Apple, Inc. (AAPL) in U.S. sales.  In fact, Samsung Electronics Comp., Ltd. (KSC:005930) has left Apple far behind in sales; in some quarters its top handset outsold Apple's only handset (the iPhone).  Meanwhile Samsung is the only Android OEM to be strongly profitable, although it still trails the lower volume Apple in profits.

Given that state of affairs, it perhaps makes a bit more sense why Samsung has been Apple's number one target in court.  So far Apple and Samsung are one and one.  In the UK Apple lost a major case to Samsung and was forced to print an apology ad; meanwhile in the U.S. a jury went the opposite way finding Samsung guilty of $1.05B USD in "willful infringement" (that case is being appealed).

Now even as Apple and Samsung lock horns for a second trialU.S. District Court for the Northern District of California's San Jose courtroom Judge Paul S. Grewal has made a key ruling which may give Samsung leverage at the bargaining table.  In a court order on the Wednesday before Thanksgiving, Judge Grewal ordered [PDF] that Apple had to disclose the terms of its intellectual property cross-licensing agreement with HTC Corp. (TPE:2498).

Apple v. Samsung
Apple will have to give fiscal details of its licensing agreement with HTC to Samsung.
[Image Source: Gizmodo]

Apple and HTC settled up earlier this month, with Apple reportedly getting less than half what Microsoft Corp. (MSFT) gets in Android licensing fees.  The licensing deal is set to last for 10 years.

The Cupertino company, despite having a stacked, high-power litigation team likely settled with HTC in part because HTC is struggling in sales and isn't much of a threat.  Now it may regret cutting a relatively reasonable deal with the Asian OEM, as it may look unfair and uncooperative to the judge and jury, should it reject a similar statement by Samsung.

According to reports while Microsoft squeezed only $10 USD per handset from HTC, it gets 50 percent more -- roughly $15 USD per handset -- from Samsung.

The document in question has been labeled "Attorneys-Eyes-Only", so it is unlikely the media will get their hands on the exact licensing details; particularly after Samsung was already admonished in the last round for allegedly leaking Apple court filings to the press.

An injunction hearing will be held on Dec. 6, at which point a California district judge will decide on whether to temporarily ban U.S. sales of Apple's iPhone 5 and/or Samsung's Galaxy S III, in addition to other Samsung "Jelly Bean" products.

Source: Judge Grewal via SBNation [The Verge]



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RE: Extremely bad
By someguy123 on 11/23/2012 1:08:33 AM , Rating: 4
How do any of those scenarios apply to this one? The court order is due to apple filing suit and claiming it could not license its patents as it would damage their brand. Licensing to HTC is clearly contrary to their own claims.

This is not a precedent for demanding confidential information on private licensing, this is apple caught in its own lies and the judge demanding licensing terms in order to find what apple considers to be "proper" licensing terms seeing as they've established such terms with HTC.


RE: Extremely bad
By hexxthalion on 11/23/2012 5:24:14 AM , Rating: 1
you're assuming that the licensing deal with HTC is about the same stuff as with Samsung. What you're forgetting though is the fact that before all this mess started, Apple approached Samsung and offered them licensing deal. Samsung rejected and got sued.

Samsung wasn't willing to take license, HTC in the end was and managed to get 'sweet' deal from Apple.

The patents in question are not FRAND ones and both HTC and Apple can charge for them whatever they want, that's why it's called cross-license agreement, they've agreed.

Samsung didn't and because of the fact that these patents are not FRAND ones, Apple can charge more or charge less Samsung for the same stuff they license to HTC.


RE: Extremely bad
By sprockkets on 11/23/2012 2:11:06 PM , Rating: 2
Samsung was offered $30 for any phone and discounts on certain os and form factors and $40 for tablets.

I would say no too.


RE: Extremely bad
By Shadowself on 11/23/2012 2:29:08 PM , Rating: 1
I've never seen anywhere (at least not any reliable source) where Apple said they could not license their patents. In fact, any such a statement would be contrary to fact: Apple has a vast cross licensing deal with Microsoft that has been in place for some time that covers many, if not all, of these patents. They did say they were not willing to license them to Samsung at this time (even though Apple had originally tried to license them to Samsung).

And even if your premise were true -- which it is not -- both Apple and HTC were willing to give Samsung all the terms and conditions of that licensing agreement. They just didn't want to give out the dollar amounts. If Samsung wants to meet all the same terms and conditions, then negotiate the dollar amounts, they might be able to strike up a deal with Apple.

Many posters forget that both Apple and Samsung admit that Apple executives went to Korea to meet with Samsung about licensing Apple's patents long before the lawsuits started flying. However, both before and after the Apple-HTC deal was announced, Samsung executives have publicly stated they will never enter into a similar deal with Apple.

So if Samsung won't license from Apple, what benefit to Samsung is there in getting the details of the Apple-HTC deal? Oh, yes, its so that Samsung can rally the Apple haters around the world for Apple trying to keep details of the Apple-HTC deal private. "See, Apple continues to be a clandestine, secretive, evil company. If only Apple would tell its competitors the details of its private dealings it would be 0.000001% less evil."

So, contrary to your belief, this is not Apple caught in its own lies. Nor is it even about Samsung wanting to get the exact same deal with Apple. It is about one company demanding and getting confidential details about the dealings of competitors for no other reason than an attempt to embarrass both those competitors.

The real travesty is the cascade effect this could have on other businesses if this precedent is let stand.


RE: Extremely bad
By someguy123 on 11/23/2012 6:31:31 PM , Rating: 2
According to reuters they specially said:

quote:
During the Samsung trial, Apple IP chief Boris Teksler said the company is generally willing to license many of its patents - except for those that cover what he called Apple's "unique user experience" like touchscreen functionality and design.


Then they licensed it to HTC. There is no global precedent for demanding internal licensing information no matter how lengthy your ranting.


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