Thursday, May 23, 2013

Apple says Samsung brought ITC complaint before making ANY licensing offer specific to its SEPs

In my post on Tuesday on the landmark California ruling enjoining an owner of standard-essential patents (SEPs) from enforcing an ITC exclusion order, I also discussed the implications of that decision in Apple's home district for the upcoming ITC decision on Samsung's complaint against Apple. In a filing made yesterday, which entered the public record today, Apple summarizes (in unusual detail) Judge Whyte's Realtek v. LSI/Agere decision and says the following about the parallels between the two disputes:

"The Realtek case is strikingly similar to the instant case. Samsung brought an ITC complaint before making any offer specific to its declared-essential patents, let alone a FRAND-compliant offer. Just as in Realtek, when Apple responded to the ITC complaint by requesting that Samsung provide FRAND terms for the specific asserted patents, Samsung responded by making a non-FRAND demand based on the total price of the accused Apple products--rather than the cost of the relevant accused components. Indeed, Samsung's conduct here is even more egregious--[redacted] In short, just as in Realtek, Samsung's pursuit of an ITC exclusion order directly conflicts with its FRAND commitments."

(no emphasis added)

The fact that LSI/Agere sought an injunction against Realtek before making any licensing offer with respect to the relevant version of the standard (some royalty demand concerning older versions had been made nine years earlier, with no negotiations in between) was key to Judge Whyte's decision. He determined that this attempt to seek to gain unfair leverage must be thwarted. The same could happen to Samsung, though the fact that this investigation has been going on for a long time without Apple seeking a preliminary injunction against Samsung's enforcement of a potential import ban would be an issue -- and I don't know whether Apple plans to trigger a FRAND determination action of the kind RealTek brought against LSI/Agere. But whatever the Northern District of California may or may not do for Apple in this context, the ITC sees that federal district courts consider such conduct abusive.

Apple's notice relates not only to the RealTek decision but also points to some of the positions taken and defenses raised by Samsung in its dispute with Ericsson. When Ericsson sued Samsung (after five years of patent peace following an earlier settlement) in November, I said from the beginning that this could help Apple because it would force Samsung to defend itself against SEPs. Apple now highlighted some of what Samsung wrote in its response to Ericsson's complaint.

With little more than a week to go (unless there is another extension, which is unlikely because the last one was rather long), the ITC keeps getting interesting and relevant input concerning this case and the overarching SEP-related issues in it, including letters from bipartisan groups of United States Senators and United States Representatives.

Here's Apple's May 22 filing:

13-05-22 Apple Notice of New Authority and Facts in ITC Inv. No. 337-TA-794

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