Bloomberg News

Samsung Says IPhones Use Patented Technology in U.K. Trial

November 28, 2012

Samsung Electronics Co. (005930) will argue Apple Inc. (AAPL:US) smartphones use its protected technology without authorization in a London trial starting today.

Samsung claims Apple infringed patents key to how phones send and receive information on third-generation mobile networks. Apple argues the patents aren’t valid and, regardless, Samsung must license the technology’s use under fair terms if it’s vital for connecting to modern networks, according to the iPhone maker’s court filings.

The two companies continue to clash over the intellectual property behind the $219 billion smartphone market, even after Apple settled all its lawsuits with HTC Corp. (2498) earlier this month. Samsung is trying to hit back after a California court ruled in August it had to pay $1.05 billion for copying Apple products.

The Samsung-Apple patent war is “becoming wider and deeper than ever before,” Sanford C. Bernstein Ltd. analyst Mark Newman said in a report this month.

The London trial, which deals only with the validity of Samsung’s patents and whether Apple infringed them, will last three weeks. Damages or royalties Apple may owe to Samsung won’t be decided until later.

“We have at all times met our obligations to the fair and reasonable licensing of our standards patents,” Samsung said in an e-mailed statement. “However, Apple has refused to negotiate in good faith, and continues to use our patented technologies without any license. We will continue to take all appropriate measures to put an end to Apple’s free-riding.”

Industry Standards

Apple spokesman Alan Hely declined to comment.

Intel Corp. (INTC:US), which makes computer chips for Cupertino, California-based Apple, has been licensed to use the Samsung patents, Apple said in its court documents. Apple hasn’t shown any interest in buying a license to use the technology, Samsung countered in its court filings.

The trial starts the day after Ericsson AB sued Samsung in Texas, claiming the Suwon, South Korea-based company refused to pay a fair and reasonable rate for using its essential patents.

Under phone industry standards, companies owning the rights to essential technology must license it to competitors on fair, reasonable and non-discriminatory terms, known as FRAND.

“Determining whether license fees are FRAND is a thorny issue,” said Andrew Hockley, a London competition lawyer not involved in the case. “It’s very much on the radar” of regulators around the world.

To contact the reporter on this story: Kit Chellel in London at cchellel@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net


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