Today a public redacted version of Samsung's January 31, 2013 answer to Ericsson's ITC complaint (seeking a ban against various Samsung products, including but not limited to a number of flagship Galaxy phones and tablets) appeared on the U.S. trade agency's electronic filing system. Considering that Samsung itself is aggressively asserting standard-essential patents (SEPs) against Apple in a variety of jurisdictions, I was really looking forward to how Samsung would defend itself against Ericsson's FRAND-pledged SEPs and I predicted that Apple would benefit from Samsung's need to make FRANDly arguments because Apple will be able to hold Samsung's own words against it.
Having read Samsung's response to the complaint, I'm not disappointed from my vantage point as a litigation watcher, and I guess Apple (which is awaiting a final ITC ruling on a Samsung complaint involving a couple of SEPs) isn't disappointed either.
While Samsung strives to make its FRAND arguments against Ericsson distinguishable from Apple's FRAND arguments against Samsung (without mentioning that case in any way), there's really just one factual difference: Ericsson and Samsung previously had two SEP license agreements in place, and Samsung alleges that "instead of proposing FRAND terms, Ericsson has demanded terms that were unreasonable and exorbitant in comparison to the previous agreements". In the Apple-Samsung case there's no formal license agreement that can be formally compared: Samsung simply never asserted its SEPs against Apple, a valued customer of components, until Apple started to enforce some of its non-standard-essential intellectual property against its vendor. It would be a bit aggressive to consider Samsung's previous non-assertion an implied license (given that Samsung, by virtue of its close relationship with Apple, knew all the time what Apple's products do) at a rate of zero. But comparisons between demands made in new negotiations and rates charged under old agreements are, at best, one way of assessing the FRANDliness of royalty demands. Samsung's 2.4% demand is clearly not FRAND and in all of the Apple-Samsung court documents I've read I can't remember having seen any indication of Samsung having received 2.4% from anyone for a license to (exclusively) its SEPs. So there's an alternative way to arrive at the conclusion that Samsung has failed to propose FRAND terms to Apple. And if we assume for the sake of the argument here that everything Samsung says about Ericsson's demands is right and that the same conclusion is reached with respect to Samsung's demands from Apple (with a different fact set and logic, of course, and consistent with the European Commission's Statement of Objections, a preliminary ruling that according to the Commission's summary found Apple to be a willing licensee and Samsung to have acted anticompetitively), it all comes down to what the ITC, or a court, should do. Samsung's brief is perfectly clear about that:
"47. Ericsson now seeks to exclude Samsung’s products from the United States, contrary to its earlier contractual obligations and promises. Ericsson's license demands and associated litigation tactics are in violation of its FRAND obligations. Ericsson is in breach of its obligations and promises and should be barred from seeking relief at the ITC or any other forum, for Samsung's alleged infringement of the purportedly standards-essential patents. This Investigation should therefore be terminated as to at least the '917, '506, '223, '215, '992, '359, and '556 patents, and Ericsson should be estopped from pursuing such claims against Samsung unless and until Ericsson complies with its FRAND obligations."
Note the words "should therefore be terminated". This is not just a defense with a view to the final ruling: it's a motion to dismiss those FRAND-pledged patents at the earliest opportunity.
Last month Apple called on Samsung (in a filing with the ITC in the investigation mentioned in the second paragraph of this post) to withdraw its requests for U.S. sales and import bans based on SEPs. Samsung's position that Ericsson "should be barred from seeking relief at the ITC or any other forum" (it does not limit this to injunctive relief, which is all the ITC can order but not the entirety of what other fora, such as district courts, can provide) goes beyond what Apple demanded.
In many other respects, Samsung's FRAND arguments mirror Apple's. For example, Samsung stresses that it "relied on Ericsson's representations that it would license on FRAND terms in making continued investments in the products and technologies". Apple, too, relied on Samsung's and other patent holders' FRAND declarations when it implemented cellular telecommunication standards.
Samsung's brief also talks at length about ETSI and other standard-setting organizations' IPR policies. I'll quote just one particularly important sentence from the related passage:
"Like other SSOs, ETSI, IEEE, and 3GPP have developed IPR Policies designed to ensure that investment in standard-setting and standard-compliant equipment is not wasted as a result of essential IPR being unavailable or only available under unreasonable and/or discriminatory licensing terms."
Apple won't claim a patent on this kind of argument. And there would be prior art, even from Samsung (from its earlier disputes with Ericsson and InterDigital). But Apple will be happy to see Samsung tell this to the ITC while the ITC is working on a decision on Samsung's request for a U.S. import ban against the iPhone and the iPad.
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