Apple says Samsung patent royalty demands unfair



I guess my friend Kenshin from South-Korea can report more about this :slight_smile:

Apple Inc said Samsung Electronics Co Ltd is demanding from the iPhone maker a far higher patent royalty than it pays to other licensers, at a rate the South Korean company has never sought from any other licensee.

Samsung is demanding a 2.4 percent rate on the “entire selling price” of Apple’s mobile products, the Palo Alto, California-based company said in a U.S. court filing on Wednesday. The information was contained in freshly unsealed portions of a legal brief in a high profile patent lawsuit between the two companies.


The legal fight between Apple and Samsung cannot be fair. Samsung executives don’t and cannot speak English though they are educated well and at great cost just like most other South Korean elites. By not speaking English not only means they had much smaller English vocabulary. It also means lacking in strategies, flexibility, logic, understanding different cultures, and many more. Of course, it’s not the Lee Gunhee himself that has to stand and speak in front of the judges and jurors, but it’s their way and only way of doing business to interfere and order at every level even though they know nothing how to fight in a San Francisco or Dusseldorf court. On the other hand, Apple is the ultimate master in legal fights. Steve Jobs himself talked to US presidents and the very federal prosecutors in charge of the lawsuits against Microsoft. Sometimes it seemed he owned the US government and order it to strangle Bill Gates. For Samsung, it’s the opposite. It is not as free as it might seem outside. It wasn’t destroyed the way Hyundai was disintegrated - once the No. 1 jaebol of South Korea, or the way Daewoo was. The chief of Hyundai had to kill himself involving some North Korean threat - the details are never known. The chief of the latter was in exile for many years and still hiding. Lee Gunhee faced somewhat a similar fate, but recovered miraculously. It was that very several years he was not in control of the whole Samsung group families that Samsung suffered, losing markets to Sony again, forcing Hwang of the notorious ‘Hwang’s Law’ and many other Samsung veterans to leave Samsung permanently.

The various legal suits are too many and too long. The long pages and patent terms and drawings are far too complicated for the judges to read and to absorb. I’ve seen reporters fail to report correctly because they can’t follow. The strategy worked for Apple after all. The delay caused by all the lawsuits gave Apple time to consolidate as much cash and ROI possible. With that money, it can buy almost any company, or even country. No wonder Apple invested in some of the deadliest Samsung competitors: Honhai of China and Taiwan, Sharp of Japan. Honhai can feed millions of cheap Chinese labor to produce things at lower cost than Samsung though Samsung can also own and build factories in Dongguan and Shenzhen. Sharp is the only major panel maker with both earlier - more advanced and more economical - and better manufacturing processes than LG and Samsung. Chinese and Taiwanese panel makers lag several years behind. Apple is also working more with Toshiba. Toshiba was the original NAND developer even before Samsung started producing competitive DRAM chips. Since Apple is buying more and more NAND chips from Toshiba, it can put more pressure on Samsung. Samsung still maintains the largest single component supplier to Apple, but the share is much reduced during the past two years. In the first iPod years, it was like 100% for Samsung, and some like at half the world market cost.

The 2.4% loyalty asking itself is a minor issue, and not really a issue at all. Everyone beside Samsung asks for similar or higher rates, but settles in the end on much different terms. Google bought Motorola Mobility for 12.5 billion USDs not because they expect Motorola can make better smartphonse or tablets or it is sufficiently advanced and futuristic in telehony technologies but to prepare further layers of protection for Google against lawsuits from Apple and some of the major players including Apple bought Nortel patent portfolio. Imagine the scale of competition over these patent wars: Google wanted to buy those Nortel patents for under 1 US billion dollars. Apple’s consortium bought them in the end for nearly 5 billion.


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