updated 09:00 pm EST, Mon December 31, 2012
Initial ruling favored Apple, criticized Samsung FRAND abuse
A US International Trade Commission final ruling on Samsung's complaint against Apple will be delayed two and half weeks until February 6, rather than the original January 14 date, according to a scheduling notice from the trade organization. The move does not necessarily signal anything, but is seen as unusual were the full commission planning on simply approving Judge James Gildea's preliminary ruling, which rebuked Samsung harshly for patent abuse.
Apple's filing ten days ago of a "Notice of New Facts," which calls the court's attention to Samsung's sudden reversal of policy in Europe in an attempt to avoid EU sanctions, may play a role in the delay. The full commission has been examining both the various charges of legal abuse by Samsung in the case of standards-essential patents (SEPs) and Fair, Reasonable and Non-Discrimanatory (FRAND) licensing.
Samsung suddenly dropped all of its SEP-based sales injunction cases in Europe in hopes of avoiding a huge European Commission fine (possibly into the billions of dollars) over its anti-competitive behavior. The commission is continuing its investigations regardless.
One of "numerous" submissions to the court, Florian Mueller reports, is from Google -- which has been accused of identical abuse of SEP and FRAND agreements by seeking sales bans on products using SEPs, an illegal anti-competitive move. In its filing, Mueller notes, Google takes exactly the opposite position it has taken in its own cases.
Google and its wholly-owned subsidiary Motorola Mobile have similarly been accused of using SEP patents to seek sales injunctions, usually in response to Apple or Microsoft lawsuits over non-SEP patents. With very few exceptions, these arguments have been shot down in court after court, particularly at the ITC -- and both Samsung and Google are being investigated by authorities in both the US and Europe over the practice.
In his initial ruling, Judge Gildea found Apple not guilty of infringing on any of Samsung's four claimed patents. He went on to find that at least one of the patents is invalid, and that at least two of the other three were likely SEPs and thus FRAND eligible. Apple had argued in court that Samsung had never brought up any possibly violations of patents until after it was warned about its own infringements of Apple patents, making the claim a sham intended as a bargaining chip. Judge Gildea's ruling wholly supported that argument, though the judge did reject Apple's "willing licensee" defense as well, saying the company had failed to prove that it would have been willing to license Samsung's patents if they had been found valid.
A reversal of Gildea's ruling is seen as unlikely, and in light of the various Federal and EU investigations underway against Samsung for SEP abuse, a final ruling that changes Samsung's losing fortunes in these fights also seems remote, though it could gain some small footing in any revised final ruling. Were Samsung (and Google/Motorola) to drop injunctive legal action based on SEP claims worldwide, it would render moot the vast majority of the biggest patent cases currently tying up courts in over a dozen countries.
The final ITC ruling, when it comes, can be appealed to the US Federal Court. The ruling is also expected to include publication of numerous submissions to the court from third-party stakeholders expressing their views on FRAND issues in general and those of relevance to the current case. In addition to Google, Microsoft and other major tech players are likely to weight in on how FRAND licensing should be handled.
If any good can be seen to be coming from the legal actions, it may prompt the ITC or other standards body to finally set firm guidelines on reasonable FRAND royalties; companies like Samsung and Motorola in particular have insisted on a two-percent or higher royalty per patent, which manufacturers like Apple and Microsoft have said is unrealistic. The two companies, along with many others in the tech sector, have long favored a "pool" approach with a cap on total income from an SEP, similar to the model established by MPEG-LA governing the use of the MP4 codec.