Saturday, March 29, 2014

Your thoughts, please: what license fees should Apple and Samsung agree on to settle their global patent dispute?

[Update on April 15, 2014] Thanks to everyone for your comments, which I really appreciated. I am now going to publish my own settlement proposal on the occasion of the third anniversary of the outbreak of this dispute. Please don't send any more comments on this question. [/Update]

I'm not going to do the usual preview post listing patents, products etc. before the trial in the second Apple v. Samsung litigation in the Northern District of California kicks off. I won't blog about the trial per se until after both parties' opening arguments. But almost three years after the first lawsuit was filed, it's anything but premature to think and talk about the terms on which they should settle their worldwide dispute with cases pending in at least ten countries. It took Apple less than two years to settle with Nokia (where it ended up the net payer) and less than three years to settle with HTC (where Apple is on the receiving end of the royalties). At least 29 royalty-bearing Android patent license agreements are known, most of which were concluded without the need for any litigation.

I have an opinion on what would be fair and reasonable terms based on today's state of the battle. Obviously, whatever seems to be the right choice now could appear less than fair for one party or the other further down the road. It's all a question of leverage. But that need not prevent us from thinking about what would make sense if they wanted to reach an 11th hour settlement now.

While I have my own opinion, I would like to encourage you, the sophisticated readership of this blog -- apart from those of you who are involved with that dispute, of course (that would be too sophisticated) -- to share your thoughts with me ([Update on April 15, 2014] Thanks for the comments you sent. Please don't send more comments now. [/Update] I won't publish your names, and I can't promise that I'll publish many of your comments, but I'd really like to know what the world out there thinks. I'll be able to consider your answers until I update this post accordingly and ask you not to send any further messages. (By the way, I won't be able to send you a personal thank you note, but please do know that I will be silently grateful.)

How much should Samsung pay to Apple per smartphone or tablet? How much should Apple fork over to Samsung per iPhone or iPad for its standard-essential and other patents? Should only one party pay? Should they enter into a zero-zero cross-license (no money changing hands at all), as Samsung presumably did with Google and Cisco? What seems reasonable to you in light of their leverage in litigation and their contributions to innovation? Feel free to send your thoughts with or without your rationale.

Now I hope I'll strike the right balance and provide you with helpful information while not trying to influence your thinking more than necessary:

So, all things considered, if you were a mediator making a proposal to the parties for a settlement that you think is reasonably acceptable to both, what would you say? Please let me know.

[Update on April 15, 2014] Thanks to everyone for your comments, which I really appreciated. I am now going to publish my own settlement proposal on the occasion of the third anniversary of the outbreak of this dispute. Please don't send any more comments on this question. [/Update]

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