Why Samsung must negotiate and why Apple won’t settle m

“The federal judge overseeing the Northern California front of the global smartphone patent war has the power to bring the CEOs of Apple (AAPL) and Samsung — Tim Cook and Choi Gee-sung — to a mediation session, but even he can’t force a settlement,” Philip Elmer-DeWitt reports for Fortune. “The differences between the kinds of patents the two companies are bringing to the table may simply be too great.”
“Steve Jobs set the terms of the dispute in 2007 when he unveiled the touchscreen smartphone that is now Apple’s No. 1 source of revenue. ‘We’ve been innovating like crazy for the last few years on this,’ he said. ‘We filed for over 200 patents for all the inventions in iPhone, and we intend to protect them,’” P.E.D. reports. “Many of Samsung’s telecommunications patents were submitted to the technical committees in charge of setting international standards under so-falled FRAND terms, whereby a company is permitted to collect royalties for use of its proprietary technology, but must negotiate those royalties for rates that are ‘fair, reasonable and non-discriminatory.’”

P.E.D. reports, “Samsung has tried to use those standards-essential patents against Apple… But as a legal strategy this carries risks, because as long as Apple is willing to pay for the use of Samsung’s patents, Samsung is required to negotiate terms that are fair and reasonable and don’t try to unduly punish Apple.”


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