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ITC postpones its decision on Apple's complaint against Samsung
Yesterday, August 1, 2013 was the day that the US International Trade Commission (ITC) was supposed to make a decision on Apple's complaint against Samsung. According to Florian Mueller at FOSS Patents, the ITC gave notice yesterday that it is postponing that decision by eight days until August 9, 2013. Not to be confused with the possible ban on importation of older Apple iPhones and iPads due to infringement by Apple of some Samsung technical patents, this ruling was to determine possible sanctions against Samsung after Administrative Law Judge Thomas Pender found in October 2012 that Samsung had infringed on three Apple technical patents and one design patent. Additional violations by Android's text-selection feature were found after the ITC had remanded some issues to Judge Pender. August 9 is going to be an important day for Apple. Not only will the ITC announce its decision (unless it is postponed again), but that's the day that the US Court of Appeals for the Federal Circuit holds a hearing on Apple's appeal of a court denial of an injunction against a number of Samsung products found to be infringing on Apple patents. The next three days are also critical for Apple, as the presidential review period for the Samsung ban against older iPhones and iPads expires. As noted yesterday, a bipartisan group of US senators has called on US Trade Representative Michael Froman to veto the ban, and today Washington, DC-based antitrust lawyer Jay Jurata called for the White House to "rein in the ITC" on standard-essential patents.
US proposes resolution to Apple e-book price fixing
Just a few weeks ago, Apple found itself on the wrong side of a decision when US District Judge Denise Cote ruled that Apple had, in fact, conspired with book publishers to raise the price of e-books across the industry. Today, the DOJ announced a proposed remedy for Apple's alleged wrongdoing. The remedy aims to stop Apple's "illegal activities" and restore competition to the e-book marketplace. As laid out by the DOJ, the proposed remedy not only requires Apple to put an end to its existing agency-model contracts with book publishers, but also precludes Apple from entering into "new e-book distribution contracts which would restrain Apple from competing on price." The DOJ writes: Under the department's proposed remedy, Apple will be prohibited from again serving as a conduit of information among the conspiring publishers or from retaliating against publishers for refusing to sell e-books on agency terms. Apple will also be prohibited from entering into agreements with suppliers of e-books, music, movies, television shows or other content that are likely to increase the prices at which Apple's competitor retailers may sell that content. To reset competition to the conditions that existed before the conspiracy, Apple must also for two years allow other e-book retailers like Amazon and Barnes & Noble to provide links from their e-book apps to their e-bookstores, allowing consumers who purchase and read e-books on their iPads and iPhones easily to compare Apple's prices with those of its competitors. That certainly seems heavy handed. The DOJ also recommends that Apple be appointed an external monitor by the court who will ensure that the company doesn't run afoul of any antitrust laws going forward. And as if that weren't enough, the monitor's salary and expenses will, according to the proposal, be paid for by Apple. Think the DOJ is done? Not quite. The DOJ also recommends that Apple hire an internal antitrust compliance officer who will not only ensure that Apple complies with court imposed remedies, but will also be tasked with training and educating Apple's senior executives and employees about pertinent antitrust laws.
Apple could pay dearly in ebook case
About two weeks ago, U.S. District Judge Denise Cote ruled that Apple conspired with book publishers to raise the price of e-books across the industry. If you recall, five publishing companies -- Penguin, Random House, HarperCollins, Simon & Schuster and Hachette -- were also targeted by the DOJ but all decided to settle instead of trying their luck in court. Apple, however, took a principled stance, asserting that it wasn't going to admit to something it didn't do. In doing so, and subsequently coming out on the wrong end of Cote's decision, Apple may wind up having to fork over a lot of cash. Gigaom, citing a recently publicized court document, writes that Apple may end up paying close to $500 million in damages when all is said and done. The chart above shows that publishers thus far have already paid out approximately $166 million in damages for their role in the "conspiracy." Meanwhile, the total amount of damages Apple may be on the hook for is $218.8 million. The rub, however, is that Apple may be on the hook for triple damages. That results in a damages amount of $656.6 million. Less the damages already paid out by publishers leaves us with a final tally of approximately $490 million. As for why Apple may end up paying triple damages, Jeff Roberts wrote the following back in early July: Apple is in a different position. It vehemently denies wrongdoing and has fought the price-fixing accusations at all turns, in court and in the press. Now, if a verdict is entered after the damages phase of the trial, Apple is on the hook to pay special damages under a section of the Clayton Act that automatically triples antitrust awards. Apple's liability, according to lawyer Jeff Friedman, will be determined by this formula: harm to consumers x 3, minus the $166 million paid by the publishers. It's worth noting that Friedman is a partner with the law firm leading the class action charge in this particular case. Apple, of course, has every intention of appealing the decision, but legal scholars contacted by AllThingsD in the wake of the verdict were pessimistic about Apple's chances to prevail on appeal. UC Berkeley Law Professor Pam Samuelson explained: Apple may have a tough time getting this ruling reversed because the judge made findings of fact about the antitrust violation that appellate courts typically defer to. Most reversals happen as to interpretations of the law. Not a good situation for Apple, but it may be some time before the case concludes and Apple has to pay up.
Penguin offers to end ebook deals with Apple
Apple's ebook price-fixing cases are now in the settlement stage in the US and Europe, and the latest word from the EU is that Penguin has become the last publisher to offer to end ebook pricing restriction deals with Apple. In December of 2012, Apple and the other four publishers named in the European Commission price fixing case agreed to settle by allowing retailers to set their own prices or discounts for the next two years and drop the "most-favored nation" contracts for five years. With this latest move by Penguin, all of the parties involved have now settled the concerns of the European Commission and this chapter of Apple history comes to a close. The damages to be levied against Apple in the US Department of Justice price-fixing case settlement have yet to be decided.
Verizon asks President Obama to veto iPhone ban
Last June, ITC handed down an order banning Apple from importing older AT&T-based models of the iPhone and iPad after finding that they infringed upon a Samsung patent. The specific models encompassed by the ban include the iPhone 3G, 3GS, 4 and the first two generations of the iPad. The ITC ruling is final, and the only way for Apple to get around it is to secure a presidential veto. The ban is scheduled to go into effect on August 5th, and while the iPhone 3G and 3GS aren't active devices in Apple's product line, the iPhone 4 still continues to sell impressively well. Consequently, Apple isn't the only entity worried about the impending product ban. To that end, Verizon lawyer Randal Milch penned an article in today's Wall Street Journal imploring President Obama to step in and veto the ITC ban. Remember that the ban only affects AT&T-based models of the iPhone, but Verizon sees a larger public policy issue here that needs addressing. Unless the administration intervenes, the ban could be in effect by August 5. High-tech products can implicate thousands of patents. If the ITC finds that a product infringes even a single one, it can stop the product at the border. But that's basically it. The commission can't levy much in the way of a lesser penalty. In the end the consumer suffers when the use of such an enforcement tool is unwarranted. ... What we have warned is that patent litigation at the ITC-where the only remedy is to keep products from the American public-is too high-stakes a game for patent disputes. The fact that the ITC's intellectual-property-dispute docket has nearly quadrupled over 15 years only raises the stakes further. It remains to be seen if Obama ultimately decides to intervene, but history certainly isn't on Apple's side. The last U.S. President to veto an ITC import ban was Ronald Reagan who did so in 1987. Indeed, Milch articulates that the dearth of Presidential vetos over the last few decades underscores the notion that the import-ban power wielded by the ITC is unchecked. Apple, meanwhile, filed a motion a few weeks ago arguing that if the ITC ban is upheld, it will make the ITC an "outlier internationally and domestically" to the extent that the ruling renders "meaningless a FRAND commitment made to a standard-setting organization." Recall that the Samsung patent at issue here is subject to a technological standard, meaning that Samsung is obligated to license it to Apple on fair, reasonable, and non-discriminatory terms. Apple also pointed out that the ruling runs counter to the very mission of the ITC itself, which is to protect American-based companies from unfair competition.
Apple and Samsung still talking settlement deal; Almost reached agreement this February
Though Apple and Samsung remain tied up in patent litigation in a number of jurisdictions across the globe, the Wall Street Journal is reporting that the two companies have been engaged in settlement talks with the aim of putting all their legal squabbles behind them. Apple and Samsung Electronics Co. have held a series of private negotiations about their numerous patent disputes since a court victory by Apple in one case last summer, according to legal documents and people familiar with the situation. The negotiations included face-to-face meetings in Seoul, South Korea, in December, one document states. The two companies even appeared to come close to a settlement in February before talks cooled off. The report adds that the two tech behemoths are still talking to each other, but there's no word as to how close they are to actually reaching a mutually acceptable settlement agreement. While Apple certainly doesn't like Samsung "slavishly copying" its product line, Apple's legal strategy as it pertains to Samsung hasn't exactly stopped them from garnering significant marketshare in the smartphone market. Apple, of course, was on the receiving end of a favorable judgement in California last summer, and indeed, another patent case in California is looming for 2014. But legal judgements aside, Samsung continues to churn out devices that look similar to Apple's own products seeing as how the legal process is always one step behind Samsung's product cycle.
Apple, Samsung will hit appeals court in August
Computerworld is reporting that Apple and Samsung are headed to the US Court of Appeals where Apple will try and convince the court to issue an injunction regarding infringing Samsung products that relate back to last summer's Apple / Samsung case in California. Apple and Samsung will appear before the court on August 9th and each side will present a 15-minute oral argument. If you recall, Apple last summer was on the winning end of a US$1.05 billion judgement against Samsung, a figure that was subsequently reduced by $450 million on account of jury miscalculations. Judge Lucy Koh, who oversaw the California case, considered, but ultimately opted not to issue an injunction for the Samsung products that were found to be infringing. In December, Koh issued a ruling stating: To the limited extent that Apple has been able to show that any of its harms were caused by Samsung's illegal conduct (in this case, only trade dress dilution), Apple has not established that the equities support an injunction. So in light of that, Apple is off to the US Court of Appeals for the Federal Circuit in Washington, D.C. to argue otherwise. The reality, however, is that any Appeals Court ruling, even if in Apple's favor, will have little discernable effect on the marketplace. The accused products from last summer's trial were effectively outdated during the trial. Now one more year has passed, and some of the accused Samsung products are no longer available for purchase. In short, the legal system moves much slower than the rate at which Samsung releases new products. Tim Cook said as much himself when he appeared before a congressional hearing this past May. I think the US Court system is currently structured in such a way that tech companies aren't getting the intellectual property protection they need. Our cycles are fast, the court system is very long and the foreign competitors in the US can quickly take IP and use it and ship products with it and they're to the next product as well. I would love to see conversations between countries and see protections between IP globally. For us, our intellectual property is so important, I would love the system to be strengthened in order to protect it. Meanwhile, Apple and Samsung have yet another case brewing in the Northern District of California and that is scheduled to begin in early 2014.
A look at the "flawed" antitrust decision against Apple
US District Judge Denise Cote last week ruled that Apple colluded with book publishers to artificially raise the price of e-books across the industry. In the wake of that decision, the Macs Future website took a thorough look at Cote's ruling and points out a number of reasons why the reasoning upon which the decision lies is flawed. If you recall, the case is rooted in Apple striking deals with a number of publishing companies and convincing them to agree to the agency model of publishing wherein the publishers themselves set the price for e-books. In the court's decision, Cote notes that Apple could have chosen to follow Amazon's lead and go the wholesale route whereby the retailer sets the price of e-books. But Apple, Cote writes, did not want to compete with Amazon on price. To that end, Macs Future astutely points out why competing with Amazon on price wasn't something one could reasonably have expected Apple to do. But the record is clear that one of the reasons that Apple didn't want to enter the ebook market using the wholesale model because the biggest player in the ebook market, Amazon with 90% market share, was pricing books at a loss or break even. The Court refused to consider how ridiculous and anticompetitive it would have been for Apple to engage Amazon in the competition of "who can price ebooks further below the wholesale price". It's worth mentioning that Amazon, with a lion's share of the e-book market, can afford to sell books at little to no profit since it can make up for it with sheer sales volume. Apple, entering the e-book market for the very first time, could not realistically compete with Amazon on price and hope to make much of a profit. Indeed, Eddy Cue, during his testimony, drove home the point that Apple was less concerned with what Amazon was doing and was more focused on securing deals capable of ensuring that Apple's iBookstore would be a profitable venture. Macs Future adds: If Apple engaged Amazon in an ebook price war, Apple could have violated the antitrust laws by engaging in predatory pricing as its prices would have been below wholesale prices. Moreover, Apple could have been accused of using its dominant market share in the smartphone market and the new tablet market, to drive ebook competition out of the market. Could you imaging the internal dilemma Apple's executives would have faced if they considered selling ebooks at a loss through their iOS ecosystem? What if they had destroyed Amazon's ebook market share by selling ebooks at a bigger loss than Amazon could have afforded? Wouldn't Amazon have complained to the Department of Justice that Apple was engaging in predatory pricing? In many respects, it seems that Apple was stuck in a classic "damned if you do, damned if you don't" type of situation. Another point lost on Cote is that the agency model of publishing can actually operate to further competition in the marketplace. Before Apple entered the market, Amazon, with its 90+% share of the e-book market, was effectively calling all of the shots. The agency model, however, returned a lot of that e-book control to publishers. Instead of Amazon setting the price of e-books as low as possible in an effort to attract new customers and keep old ones, the agency model gave publishers the opportunity to try their hand at the tried and true game of supply and demand. If publishers set the price of an e-book too high and subsequently noticed a drop off in sales, it stands to reason that they would simply lower the price. Further, with Amazon not setting any of the prices, publishers would be competing against one another on price. But the Court ignores that instead of having one company, Amazon, setting the retail price of ebooks, the agency model provided the six largest publishers and countless other publishers to set the the price of their own ebooks. That creates massive retail price competition. One publisher can't greatly raise the price of a notable book because another publisher (or author) with a book of the same quality and in the same topic can undercut that price and sell more books. When Amazon sets the price of 90% of the ebooks the consumer is set with no recourse but to rely on Amazon's goodwill on the retail price. The agency model allows many players to set the retail price. Thus in the long run, such competition is likely to result in the lowering of price. All solid points. The entire post over at Macs Future is well worth a read if you want a different take on Apple's legal battle with the DOJ. Meanwhile, Adam Engst over at TidBITS also has a comprehensive look at Judge Cote's decision that's worth poring over.
Apple asks ITC to stop impending ban on iPhones and iPads
The International Trade Commission (ITC) a few weeks ago issued an order banning the import of older generation iPhones and iPads to the extent they infringe upon Samsung owned patents. With the ban scheduled to go into effect on August 5th, Gigaom today is reporting that Apple filed a motion with the ITC asking for a stay on the impending ban until an appeals court weighs in on the ruling. Apple writes that the ban will "sweep away an entire segment of Apple's product offerings" and that they will suffer irreparable harm if a stay is not granted. If the Orders go into effect, Apple will lose not only sales of its iPhone 4 (GSM) and iPad 2 3G (GSM) products but also the opportunity to gain new smartphone and tablet customers who otherwise would have purchased these entry-level devices. Should the Commission's decision be reversed or modified on appeal, Apple will have no recourse to redress this harm. Apple further points out that if a stay is granted and the appeal process ultimately proves fruitless, Samsung will have recourse to the extent they can seek compensation for any potential loss of FRAND royalties. The iPhone 4, Apple writes, was the fourth-best selling smartphone in the US in 2012. In a separate appeal filed with the United States Trade Representative about two weeks ago, Apple argued that upholding the ban would make the ITC an "outlier internationally and domestically." Apple's most recent motion can be read below. Apple ITC Request for Stay
Judge finds Apple guilty of fixing e-book prices (Updated)
According to Reuters, US District Judge Denise Cote has ruled against Apple in its big e-book price-fixing trial. The judge found that Apple conspired to raise the retail price of e-books and will now face a trial to determine damages. Update: Both Apple and the Department of Justice have released statements about this decision, according to AllThingsD. Not surprisingly, Apple is disappointed with the ruling and will appeal, while the DOJ is pleased. Apple spokesman Tom Neumayr confirmed the company will appeal and says, "Apple did not conspire to fix e-book pricing and we will continue to fight against these false accusations. When we introduced the iBookstore in 2010, we gave customers more choice, injecting much-needed innovation and competition into the market, breaking Amazon's monopolistic grip on the publishing industry. We've done nothing wrong and we will appeal the judge's decision." Assistant Attorney General Bill Baer writes, "This result is a victory for millions of consumers who choose to read books electronically ... Companies cannot ignore the antitrust laws when they believe it is in their economic self-interest to do so. This decision by the court is a critical step in undoing the harm caused by Apple's illegal actions."
Boston University sues Apple over patent infringement
The Boston Herald is reporting that Boston University is suing Apple for patent infringement regarding a "thin film semiconductor device" found in products ranging from the iPhone to the iPad and the MacBook Air. The patent in question is titled "Highly Insulating Monocrystalline Gallium Nitride thin Films". The Herald writes: In a bombshell lawsuit filed yesterday in U.S. District Court of Massachusetts, the university alleges that a small electronic component patented by computer engineering professor Theodore D. Moustakas in 1997 is included in the iPhone 5, iPad, and MacBook Air. "Defendant's acts of infringement have caused and will continue to cause substantial and irreparable damage to the University," BU alleges in its complaint. The report also notes that the University has wielded the same patent against other tech companies, including Amazon and Samsung. The complaint is embedded below. Trustees of Boston University v. Apple
Apple made £68 million in the UK last year, paid £0 corporation tax
Apple is once again under fire in the UK for paying no taxes last year, even though the company earned £68 million (US$103 million) in the country. Apple got around paying UK taxes by offering employees £40 million worth of stock, which the company could then write off as a business expense, thus lowering its taxable income. The company has also carried a £3.8 million tax deduction forward for next year. It should be noted that Apple's tax activities are entirely legal, even though its moral and ethical implications leave a bad taste in the mouth. Multinational corporations have increasingly come under fire in the UK and the rest of the EU. Companies like Starbucks, Facebook, Amazon, Google and Apple are now receiving extreme scrutiny from government regulators over their unscrupulous, but apparently legal, tax practices. Many feel (including myself) that in an age of austerity where public budgets are being cut from almost every facet, it is not fair that companies are avoiding paying taxes on an estimated $21 to $32 trillion a year -- an amount that could effectively wipe out global poverty, global hunger and provide free education for every person on earth. Apple may make great products, but that doesn't mean it shouldn't be held to the same standards as the individuals who buy its products.
Report: Apple considering new suit against Galaxy S 4
Bloomberg is reporting that US Magistrate Judge Paul S. Grewal has rejected Apple's attempt to include the recently released Samsung Galaxy S 4 in Apple's second California lawsuit against Samsung which is slated to begin in March 2014. Adding another product to the case is a "tax on the court's resources," Grewal said in the ruling. "Each time these parties appear in the courtroom, they consume considerable amounts of the court's time and energy, which takes time way from other parties who also require and are entitled to the court's attention." Apple initially filed a motion seeking to include the Galaxy S 4 this past May and noted that it would be willing to drop one of the accused products already included in the suit if necessary. That, apparently, wasn't sufficiently persuasive for Judge Grewal. An Apple lawyer argued that by excluding the GS4, Apple might have to file a new lawsuit since the devices already covered by the suit will be out of date by the time a verdict is reached. Indeed, this seems to be an ongoing problem for Apple and one for which there doesn't seem to be a practical solution. Tim Cook acknowledged this very predicament when he appeared before Congress this past May. I think the US Court system is currently structured in such a way that tech companies aren't getting the intellectual property protection they need. Our cycles are fast, the court system is very long and the foreign competitors in the US can quickly take IP and use it and ship products with it and they're to the next product as well. I would love to see conversations between countries and see protections between IP globally. For us, our intellectual property is so important, I would love the system to be strengthened in order to protect it. Put simply, the cases Apple brings to trial against Samsung are perpetually a generation behind Samsung's current smartphone lineup. The end result is that Apple is continuously playing catch-up and expending a lot of money litigating cases over products that don't often include Samsung's current flagship devices. The Verge has posted the full court ruling over here.
Supreme Court refuses to hear Mirror Worlds' appeal to have damages award against Apple reinstated
Back in 2008, a company called Mirror Worlds filed a patent-infringement suit against Apple alleging that a number of OS X features infringed upon one of its patents. The accused features included Cover Flow, Time Machine and OS X's Spotlight search feature. In October 2010, Mirror Worlds won a US$625.5 million judgement against Apple. At the time, the damages amount was the fourth-largest patent judgement in US history. Apple, naturally, appealed and in April 2011, a federal judge reversed the judgment. Earlier this week, the Supreme Court refused to consider Mirror Worlds' recent attempt to have $208.5 million of the damages award reinstated. Bloomberg reports: Apple Inc.'s victory in a patent-infringement case was left intact as the US Supreme Court rebuffed a Texas company's effort to revive a $208.5 million verdict against the computer maker. The high court declined to hear a case in which closely held Mirror Worlds LLC said an appeals court erred in ruling that Apple didn't infringe a software patent for a way to index and file documents. Mirror Worlds was co-founded by Yale University computer-science Professor David Gelernter.
Apple argues that import ban against iPhones and iPads makes ITC an 'outlier internationally and domestically'
In early June, Samsung rejoiced as the ITC handed down an order precluding Apple from importing AT&T models of the iPhone 3G, 3GS and 4. Also included in the order were AT&T models of the original iPad and the iPad 2. Because the ITC order is final, the only way to get around it is if a presidential veto is issued. At the time, Apple spokeswoman Kristin Huguet said: We are disappointed that the commission has overturned an earlier ruling and we plan to appeal. Today's decision has no impact on the availability of Apple products in the United States. Last week, Apple filed an appeal to the United States Trade Representative (USTR) who has the power to veto ITC exclusion orders. Apple's motion notes that because the patented technologies asserted by Samsung are essential to technological standards, upholding the ITC decision "threatens to render meaningless a FRAND commitment made to a standard-setting organization." As a quick refresher, if a company wants its technology deemed essential to a technological standard, the tradeoff is that they must subsequently offer to license said technology to any interested party on fair, reasonable and non-discriminatory terms. Apple's motion notes that the ITC decision makes it an "outlier internationally and domestically." Indeed, just yesterday we reported that Samsung is hoping to settle a pending anti-trust case with the EU amidst charges that it illegally wielded its standard essential patents (SEP) against Apple. The decision upsets the international consensus against FRAND abuse, making the ITC an outlier among agencies and tribunals around the world. For example, the European Commission issued a preliminary determination that Samsung had violated European competition law by pursuing injunctions on FRAND patents against Apple, and Samsung has withdrawn all such injunction requests in Europe. Yet here in the United States, Samsung has continued to pursue injunctions and exclusion orders, and the ITC has now rewarded that conduct. The decision likewise goes against the jurisprudence of US courts, allowing SEP holders to evade US court decisions. As such, the decision will create a unique venue for SEP-holding plaintiffs to obtain special relief that has been rejected by the many other authorities that have considered the issue, attracting to the ITC other parties that wish to use their SEPs for hold-up. Apple further adds that the ITC ruling runs counter to the very mission of the ITC itself, which is to protect American companies from unfair competition. The ITC ruling, Apple writes, serves the opposite purpose, which is to say that it "enables unfair competition against an American company." Florian Mueller has made the entire order available on Scribd. It's well worth poring over if you're interested in the particulars of this case.
Samsung looking to settle EU antitrust case ahead of trial
According to a report from Reuters, Samsung is hoping to avoid a trial with the EU and settle charges that it illegally leveraged its standard essential patents against Apple. The talks came after the European Commission, which acts as EU competition regulator, told Samsung in December that it was acting unfairly by seeking injunctions against Apple over use of the essential patents. "Samsung has been involved in settlement discussions for several months now. Samsung wants to settle," said one of the sources, who declined to be identified because of the sensitivity of the matter. While Apple has taken Samsung to court across the globe, those lawsuits center on patents that Apple owns and is under no obligation to license out. Samsung, in contrast, has shown no hesitation in suing Apple for infringing upon standard essential patents which must be licensed out to competitors on fair, reasonable and non-discriminatory terms. Specifically, Samsung, in a number of European countries, has sued Apple for infringing upon patents covering 3G technology. So while Samsung may be looking to settle its case with the EU -- and avoid what may amount to billions of dollars in fines -- the company has no intention of settling its ongoing patent disputes with Apple. You might recall that Samsung CEO Shin Jong-kyun recently said that the company has no intention of reaching a settlement agreement with Apple, noting that "patent disputes against Apple will continue."
Apple hit with new patent lawsuit, this one for call forwarding
Another day, another patent lawsuit. Earlier this week, Apple was served with a lawsuit from a Texas-based company called Bluebonnet Telecommunications which alleges that the iPhone 4S and iPhone 5 include a call-forwarding feature that infringes upon a patent of theirs which covers a "method and apparatus for determining the telephony features assigned to a telephone." The patent in question was originally granted to Bluebonnet Telecommunications back in 1996. The lawsuit reads in part: Apple induces end-user customers to use the accused smartphones, and specifically to use them in a manner that infringes the 511 patent. They do so by (1) providing instructions to their customers that explain how to use the features of the accused devices that are accused of infringement (specifically those features that allow call forwarding and the display of whether the feature is activated); and (2) by touting the accused features of the smartphone Oddly enough, the lawsuit notes that Apple has had knowledge of the 511 patent "since at least as early as the filing of this lawsuit." The takeaway here is that Bluebonnet Telecommunications is effectively admitting that Apple was wholly unaware of the patent in question and chose to file a lawsuit without first attempting to secure a licensing agreement with Apple. Of course, that is fully acceptable within the confines of the law, but it's then curious that Bluebonnet Telecommunications is quick to call Apple's alleged infringement "willful." Bluebonnet Telecommunications is seeking damages, a permanent injunction and attorneys fees. You can check out the patent in question over here.
Eddy Cue: Steve Jobs picked 'Winnie the Pooh' as the iBooks freebie, also came up with the idea for 'page curls'
While testifying in court last week, Apple executive Eddy Cue had a number of interesting tidbits regarding the origins of the iBookstore, namely that Steve Jobs was initially opposed to the idea, but quickly hopped on board after Cue convinced him that the iPad would make the perfect e-reader. Today, Cue took the stand once again where he divulged some more interesting tidbits regarding Apple's foray into the e-book space. At one point during today's proceeding, an Apple attorney asked Cue a number of questions about Jobs and his involvement in Apple's iBooks initiative. Once again, All Things D was there covering the trial and relayed the following nuggets of information. The "page curls" in the iBook app, which show up when you flip an iBook's page? That's Steve Jobs' idea. It was Jobs' idea to pick ""Winnie-the-Pooh" as the freebie book that came with every iBook app. Not just because Jobs liked the book, Cue said, but because it showed off iBook's capabilities: "It had beautiful color drawings, that had never been seen before in a digital book." Jobs was also specific about the book he used to show off the iBook during his initial iPad demo in January 2010. He picked Ted Kennedy's "True Compass" memoir, because the Kennedy family "meant a lot to him," Cue said. Indeed, Cue's testimony serves to underscore that you'd be hard-pressed to find another CEO in the annals of tech that was as product- and detail-oriented as Jobs. Apple's trial with the DOJ is slated to end this week.
Eddy Cue takes the stand in e-book price fixing case
Apple executive Eddy Cue didn't get a chance to enjoy WWDC in its entirety because earlier today he was in New York City testifying about Apple's dealings with book publishers amid allegations that Apple colluded with publishers to artificially raise the price of e-books across the industry. While on the stand, Cue didn't deny that the price of e-books had risen in the wake of Apple getting into the e-book market. He did however clarify that the rise in e-books pricing wasn't the result of backhanded and behind-the-scenes maneuvering from Apple, but rather the result of publishers on the whole being unsatisfied with their current contracts with Amazon. Yahoo adds: Cue was the chief negotiator in deals with the publishers that allowed them to set prices as high as $14.99 for sales in Apple's new iBookstore. But he denied that the deals were calculated to force Amazon into similar agreements that would raise its prices as well. Jobs closely monitored the negotiations but was "indifferent" about the outcome for Amazon, Cue testified. However, when asked if Jobs knew that there was a chance that once the iBookstore launched, publishers would withhold best sellers and new releases from Amazon, he responded, "I believe so, sure. Smart guy." Cue also testified that he was wholly unaware that the publishers he was negotiating with were also talking to each other independently of Apple. The DOJ initially went after Apple and five big publishing companies for e-book price fixing back in April of 2012. Since then, each publishing house has settled with the DOJ, thus leaving Apple the only party willing to battle it out in court. When Tim Cook was asked about the trial during his recent appearance at the All Things D conference, he called the trial "bizarre," noting that Apple wasn't going to settle and effectively admit to something it didn't do. Cue's testimony on Thursday marked the end of this week's proceedings. The trial will resume next Monday and scheduled to wrap up late next week.
Samsung CEO says 'patent disputes with Apple will continue'
While Apple was able to settle its past patent disputes with both Nokia and HTC, its ongoing legal battles against Samsung show no signs of slowing down. According to the Korea Times, Samsung CEO Shin Jong-kyun recently spoke to reporters and indicated that an all-encompassing settlement agreement with Apple isn't on the horizon. The CEO confirmed Samsung has no intention of ending the patent disputes with Apple. "Patent disputes against Apple will continue," Shin said. The paper notes that Jong-kyun's remarks are the first he's made about Apple since the ITC in early June ordered an import ban against older-generation iPhones and iPads for infringing upon standard essential patents owned by Samsung. With a multitude of legal cases in jurisdictions across the globe, it would appear, at this point, that both Apple and Samsung will continue to fight this out until the bitter end. After all, Apple and Samsung together account for nearly 100 percent of the profits in the smartphone market and it stands to reason that neither side is sufficiently motivated to back down in any way. That's all well and good, but the problem with these patent disputes is that by the time they ultimately go to trial, the products and designs in question may very well be irrelevant. Tim Cook himself said as much while testifying in front of Congress this past May. Though he was in D.C. to discuss Apple's tax practices, Cook at one point was asked about the state of IP in the tech industry. Cook replied, I think the US Court system is currently structured in such a way that tech companies aren't getting the intellectual property protection they need. Our cycles are fast, the court system is very long and the foreign competitors in the US can quickly take IP and use it and ship products with it and they're to the next product as well. I would love to see conversations between countries and see protections between IP globally. For us, our intellectual property is so important, I would love the system to be strengthened in order to protect it.
