Samsungs Patent deal with Google – Concern about settlement with Apple

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MONDAY, JANUARY 27, 2014

Samsung’s patent deal with Google suggests concern about ability to settle with Apple soon

Late on Sunday, Samsung and Google announced a ten-year global patent license agreement. As the announcement notes, they already have a “long-term cooperative partnership” in place, so there was no immediate threat of litigation between them anyway.

The press release quotes IP executives from both companies who suggest that this agreement should serve as a model for the wider industry, as an alternative to patent litigation. Those quotes show that the intention here is primarily to make those look bad who enforce their patents. Samsung is embroiled in disputes with Apple and Ericsson, and Google’s Motorola Mobility with Apple and Microsoft. But Apple also struck a ten-year license deal with HTC in late 2012, one of 23 announced or publicly-discoverable royalty-bearing Android patent license agreements (most of which relate to Microsoft’s patents). Recently Samsung and Nokia announced an extension of a license deal as well, and it may also cover Android but the scope was not specified. In other words, the fact that Google and Samsung enter into a long-term cross-license agreement does not make them IP innovators or thought leaders.

Samsung and Google own a lot of patents, but they haven’t been able to gain much leverage from those patents against Apple, Microsoft and others. They have, however, lost a number of lawsuits, and just last week a U.S. judge found Samsung to fringe yet another Apple patent and invalidated one of Samsung’s patents-in-suit, ahead of a trial scheduled to start on March 31. One way to sum up the announcement would be this: “If you can’t beat ’em, just try to make ’em look bad”.

It’s not just about making the enforcers look bad but also about giving the impression of being willing licensees. Prior to this announcement, the last Google patent license agreement with another major industry player that was announced was a deal with Yahoo that cleared the path for Google’s IPO about a decade ago.

There could also be antitrust considerations. Both companies face antitrust investigations because of their assertions of standard-essential patents. They both rely largely on the same law firm in that context and make similar royalty demands (Samsung is known to demand 2.4% of Apple’s sales, while Motorola Mobility wants 2.25%). Through this cross-license deal among friends they may hope to somehow validate their supra-FRAND demands in the eyes of regulators, but I believe competition enforcers won’t be overly impressed.

I’ve been somewhat skeptical of the prospects of a near-term Apple-Samsung settlement for some time (see my comments to the Korea Times). I’m now even more skeptical because I believe Samsung would rather announce the really big news of a deal with Apple than engage in a PR ploy with a close ally.

As long as Samsung primarily makes Android-based devices, it doesn’t need a deal with Google, or vice versa, to avoid litigation between the two. If Samsung switched to an alternative platform like Tizen, then the agreement might make a difference, but since the scope was not announced, it’s possible that Google reserved the right to sue Samsung over non-Android devices.

see also http://www.cnbc.com/id/101364582

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