Samsung files redacted copy of ‘very lopsided’ Apple-HTC deal in U.S. court; Distinctive Apple User Experience not for sale

“Lawyers for Samsung Electronics Co Ltd filed a redacted copy of a 10-year patent licensing agreement between Apple Inc and Taiwan’s HTC Corp in a U.S. court late on Wednesday following a judge’s order,” Sakthi Prasad and Poornima Gupta report for Reuters.

“The court last month ordered Apple to disclose to Samsung details of the legal settlement that the iPhone maker reached with HTC, including terms of the 10-year patents licensing agreement,” Prasad and Gupta report. “The redacted copy excludes key specifics such as the royalty payments HTC would have to make to Apple for using some of the U.S. company’s patents. Also excluded are details of some of HTC’s covered products that were part of the licensing deal. The court order had stated that “only the pricing and royalty terms of license agreements may be sealed.”

Prasad and Gupta report, “As per the Apple-HTC agreement, the licenses do not include Apple’s design patents, according to a filing made with the District Court of Northern California. Apple and HTC also agreed to fully paid-up, royalty-free, non-exclusive, non-transferable, non-sublicensable licenses to certain of the other’s patents.”

Read more in the full article here.

“Samsung cannot and presumably will not try to argue that Apple is willing to license its design patents. Those are explicitly excluded from the agreement in a way that leaves no doubt whatsoever,” Florian Mueller writes for FOSS Patents. “Apple and HTC never had a design patent dispute. Apple’s design patent assertions have so far targeted mostly Samsung (in multiple jurisdictions), in one German case Motorola’s XOOM tablet (Apple lost that one but may still be pursuing an appeal), and a few smaller players in Germany, Spain and possibly other jurisdictions. Should HTC suddenly build iPhone and iPad lookalikes, Apple could still sue, but I doubt that this will be necessary.”

“I’ve been saying for a long time that at a minimum Apple needs to defend the distinguishability of its products, or its business would be subjected to totally unfettered, margin-destroying commoditization. The Apple-HTC agreement defines a very important term: Distinctive Apple User Experience,” Muller writes. “That’s what Apple seeks to protect and that’s something that is not for sale. The first time that an anti-cloning provision in an Apple license agreement was mentioned in public was this summer when an Apple executive testified in open court that Microsoft has a license to all Apple patents but that the parties agreed to an anti-cloning provision.”

Muller explains, “HTC can use what Google provides without fear of being sued by Apple. Otherwise HTC would be at a fundamental disadvantage vis- -vis other Android device makers. And while Google now knows these terms and could implement certain features just to help HTC and possibly others who will sign similar license deals in the future, Google also realizes that Apple might at some point enforce its rights against Google directly. Apple is obviously not afraid of Google. Otherwise it would never have sued HTC and other Google partners, and wouldn’t continue to be suing a wholly-owned Google subsidiary, Motorola Mobility.”

“Whatever the court will decide, it’s a very interesting question whether Samsung will agree to a license deal with Apple along the lines of the one accepted by HTC, especially now that Samsung sees how most of the terms of these deals may ultimately have to be shown in public. The Apple-HTC deal is very lopsided,” Mueller writes “There are no two-way payments: it’s all about HTC paying to Apple. The deal is under California law, and any arbitration proceedings would be under the auspices of the international division of the American Arbitration Association. HTC is not allowed to “clone” Apple’s products and features, but the agreement doesn’t limit Apple’s use of HTC’s patents. And various other details also reflect the fact that this was absolutely positively not a deal between equals.”

Much more in the full article – highly recommended – here.

MacDailyNews Take: Have a nice day, Samsung.

Apple-HTC terms are consistent with what Steve Jobs told Eric Schmidt and stated in public

“The public filing of the Apple-HTC license agreement, with the exception of its financial terms and a few details, is the most important smartphone patent news in the build-up to the Apple-Samsung injunction hearing,” Florian Mueller writes for FOSS Patents. “The first license deal ever to have become known between Apple and an Android device maker certainly raises the question of whether Apple’s current leadership has softened its stance compared to what the company’s iconic co-founder and two-term CEO, Steve Jobs, had in mind when he sued HTC in March 2010 (and two other Android device makers, Motorola and Samsung, within 13 months). Time and time again Apple’s adversaries have pointed courts to a passage in the biography authored by Walter Isaacson. Purportedly, Steve Jobs vowed to destroy Android because he considered it a stolen product, and said he was willing, if necessary, to spend all of Apple’s cash reserves on the pursuit of this cause. According to the book, he even declared himself prepared to wage ‘thermonuclear war.’”

“This reporting has led people to believe that Apple’s patent enforcement against Android was an emotional crusade more so than a smart business choice, and has made Apple appear to be a ruthless, anticompetitive aggressor,” Mueller writes. “I never believed any of that. In many interviews over the last 12 months I’ve urged reporters not to attribute to emotion what can be explained with strategic/competitive needs (differentiation vs. commoditization) and, especially, not to attach too much weight to what was, if authentic (which I obviously don’t know but which I’ll presume in the following for the sake of simplicity), merely a private comment and thus can’t be compared to public statements. In particular, comparing a private remark by Steve Jobs to public statements by his successor, Tim Cook, would be completely flawed and unlikely to lead to accurate conclusions.”

Mueller writes, “The different things Steve Jobs said must be weighted according to context. The logical starting point is not his biography but the press release with which Apple announced the HTC lawsuit in March 2010. It contains this Steve Jobs quote: ‘We can sit by and watch competitors steal our patented inventions, or we can do something about it. We’ve decided to do something about it,’ said Steve Jobs, Apple’s CEO. ‘”We think competition is healthy, but competitors should create their own original technology, not steal ours.’ There’s no contradiction between that statement and the published terms of the deal.”

Much more in the full article – very highly recommended – here.

MacDailyNews Take: The walls are slowly closing in on the serial patent- and trade dress-infringers; the Apple wannabes who’ll never be.

And none of your derivative Droids are going to be able shut down all the garbage compactors on the detention level, either. This is how the worm turns.

Ever so slowly the screws of justice grind, yet grind, they do. Tick-tock, slavish copiers. Tick-tock.

Related article:
Samsung files redacted copy of 'very lopsided' Apple-HTC deal in U.S. court; Distinctive Apple User Experience not for sale – December 6, 2012
Boom! Apple sues HTC for infringing on 20 iPhone patents – March 2, 2010

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Apple Tells Samsung How Much Its 10-year HTC License Is Paying

Gary Cutlack - Gizmodo UK

Apple has been ordered to help Samsung's legal battles a little, with a court telling it to share full details of the 10-year settlement it struck with HTC recently. Only it's not going to be made public.

Apple has already sort of complied, providing Samsung with a heavily redacted version of the deal's terms that removes 33 words from the agreement. This cropped version of the text fails to show the financial details of the agreement between Apple and HTC, which is presumably the most critical part of it as far as Samsung is concerned.

Apple claims Samsung already agreed to accept this redacted version of the text, but Samsung's now won the right for the full text to be released to its lawyers ahead of a December 6th hearing in its ongoing case with Apple.

HTC recently denied it was paying Apple $8 every time it sells an Android model, claiming the estimates were "outrageous." Samsung's lawyers will soon know the real number. [Guardian]

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Our newest offspring Gizmodo UK is gobbling up the news in a different timezone, so check them out if you need another Giz fix.

Apple Adds Link to Samsung Website and Acknowledges Company Didn’t Copy iPad Design

Despite their best efforts to prove otherwise (including patents that have been filed), the UK didn’t agree that Apple invented the concept of a tablet that has a “rectangular shape and rounded corners.” As a result, Apple lost their recent appeal against Samsung asserting that the Galaxy Tab 10.1 did not infringe Apple's iPad designs. Part of the judgement is the judge’s decision that Apple must run advertisements in local newspapers as well as on the company's website (which has now been done).

The apology itself is exactly what you would expect from Apple: minimalistic, professional and delivered without an ounce of emotion or warm-fuzzy feelings. In fact, in many ways it barely reads like an apology at all with content that reads moreso like an advertisement with Apple describing their own iPad:

“The extreme simplicity of the Apple design is striking. Overall it has undecorated flat surfaces with a plate of glass on the front all the way out to a very thin rim and a blank back. There is a crisp edge around the rim and a combination of curves, both at the corners and the sides. The design looks like an object the informed user would want to pick up and hold. It
is an understated, smooth and simple product. It is a cool design.”

Of course, they do give an ounce of credit to Samsung where it is (legally) due by saying that “the Samsung products are very thin, almost insubstantial members of that family with unusual details on the back,” and finishing with the note stating that the Galaxy Tab 10.1 does not have “the same understated and extreme simplicity which is possessed by the Apple design.” In case you missed the part where that is a compliment, Apple is acknowledging that they really couldn’t have copied the iPad design (or at least they didn’t do so well enough to make a truly competitive product).

On second thought, there really isn’t an apology at all in the text of this… apology. There is a distinct admission of their loss in this particular legal battle though, which may be all Samsung could have (should have) hoped to get from this exercise.

If you ask Apple, the Samsung tablets are “not as cool.” Do you agree?

Full Letter posted on Apple’s website:

Samsung / Apple UK judgment

On 9th July 2012 the High Court of Justice of England and Wales ruled that Samsung Electronic(UK) Limited's Galaxy Tablet Computer, namely the Galaxy Tab 10.1, Tab 8.9 and Tab 7.7 do notinfringe Apple's registered design No. 0000181607-0001. A copy of the full judgment of the Highcourt is available on the following link www.bailii.org/ew/cases/EWHC/Patents/2012/1882.html.

In the ruling, the judge made several important points comparing the designs of the Apple and Samsung products:

“The extreme simplicity of the Apple design is striking. Overall it has undecorated flat surfaces with a plate of glass on the front all the way out to a very thin rim and a blank back. There is a crisp edge around the rim and a combination of curves, both at the corners and the sides. The design looks like an object the informed user would want to pick up and hold. It is an understated, smooth and simple product. It is a cool design.”

“The informed user’s overall impression of each of the Samsung Galaxy Tablets is the following. From the front they belong to the family which includes the Apple design; but the Samsung products are very thin, almost insubstantial members of that family with unusual details on the back. They do not have the same understated and extreme simplicity which is possessed by the Apple design. They are not as cool.”

That Judgment has effect throughout the European Union and was upheld by the Court of Appeal on 18 October 2012. A copy of the Court of Appeal's judgment is available on the following link www.bailii.org/ew/cases/EWCA/Civ/2012/1339.html. There is no injunction in respect of the registered design in force anywhere in Europe.

However, in a case tried in Germany regarding the same patent, the court found that Samsung engaged in unfair competition by copying the iPad design. A U.S. jury also found Samsung guilty of infringing on Apple’s design and utility patents, awarding over one billion U.S. dollars in damages to Apple Inc. So while the U.K. court did not find Samsung guilty of infringement, other courts have recognized that in the course of creating its Galaxy tablet, Samsung willfully copied Apple’s far more popular iPad.

Judge rubber-stamps U.S. e-books settlement

“In a move that could reshape the publishing industry, a federal judge [U.S. District Judge Denise Cote] has approved a settlement with three of the nation’s largest book publishers over alleged collusion in the pricing of e-books,” Chad Bray and Jeffrey A. Trachtenberg report for The Wall Street Journal. “The approval comes as Apple Inc. and two other publishers are preparing to defend themselves next June over antitrust allegations by the U.S. Department of Justice that they agreed to keep e-book prices artificially high in response to steep discounting by Amazon.com Inc.”

“Lagard re SCA’s Hachette Book Group, CBS Corp.’s Simon & Schuster Inc. and News Corp.’s HarperCollins Publishers LLC all agreed in April as part of the settlement to terminate their agreements with Apple and refrain from limiting any retailer’s ability to set e-book prices for two years,” Bray and Trachtenberg report. “Apple had hoped to stave off final approval, and termination of the agreements, until after next year’s trial. The approval opens the door for Amazon and other retailers to steeply discount e-book titles.”

Bray and Trachtenberg report, “Bob Kohn, an antitrust lawyer who has filed objections to the settlement, on Thursday said that ‘it appears that the District Court deferred to the Justice Department in its analysis. It’s very disappointing that the court has rendered a judgment that will cause great harm to consumers of e-books because the judgment reverses the pro-competitive effects of the agency pricing model.’ Mr. Kohn suggested that the decision will eventually be appealed. ‘It’s devastating to bookstores,’ said Paul Aiken, executive director of the Authors Guild. ‘For two years the settling publishers must allow vendors to discount e-books at any price they want. The court acknowledges that this restores the status quo conditions before 2010, when Amazon was able capture 90% of the e-book market. The Justice Department is reshaping the literary marketplace without submitting a single economic study to the court to justify its actions.’”

Read more in the full article here.

MacDailyNews Take: Hachette, Simon & Schuster, and HarperCollins are weak-kneed pushovers, as U.S. District Judge Denise Cote, and the U.S. DOJ is plainly inept. For this fiasco alone, they ought to rename it the Department of Injustice.

Apple, Samsung lawyers make closing arguments to U.S. jury

“Apple spent four years pouring resources into developing the iconic iPhone, while Samsung couldn’t keep up and eventually decided to copy its major competitor, an Apple attorney said in court,” Dan Levine reports for Reuters.

“Closing arguments kicked off on Tuesday as the high stakes trial between Apple Inc and Samsung Electronics Co Ltd drew towards a climax in a federal court in San Jose, California. The jury will likely begin deliberating on Wednesda,” Levine reports. “Apple attorney Harold McElhinny urged jurors to consider the testimony of a Korean designer who said she worked day and night on Samsung’s phones for three months. ‘In those critical three months, Samsung was able to copy and incorporate the result of Apple’s four-year investment in hard work and ingenuity — without taking any of the risks,’ McElhinny said.”

MacDailyNews Take: Samsung’s attorney jammed his hands into his pants pockets, toed the floor, and stared at the ceiling while whistling tunelessly.

Levine reports, “A Samsung attorney is expected to begin his closing argument later on Tuesday.”

Read more in the full article here.

Apple may owe Samsung $422 million in damages, Samsung witnesses say

“Apple Inc. would owe as much as $421.8 million in royalties if found to infringe five Samsung Electronics Co. patents for mobile devices, two witnesses for the South Korean company testified,” Joel Rosenblatt reports for Bloomberg,

“One damages expert, Vincent O'Brien of OSKR LLC, told the jury today in the intellectual property trial between Apple and Samsung in federal court in San Jose, California, that he calculated royalties of $22.8 million based on claims that the iPhone maker infringed three of Samsung's feature patents,” Rosenblatt reports. “A second expert, University of California, Berkeley business school professor David Teece, testified that damages for Apple's infringement of two other Samsung patents should be in the range of $290 million to $399 million, based on royalty rates of 2 percent to 2.75 percent.”

Read more in the full article here.

MacDailyNews Take: What are they smoking, crack?