Apple, Broadcom ordered to pay $1.1bn for patent infringement

Yahoo – AFP, January 30, 2020

Both Apple and Broadcom indicated they planned to appeal the verdict finding
they infringed on a California university's patent (AFP Photo/Loic VENANCE,
JUSTIN SULLIVAN)

Los Angeles (AFP) - A Los Angeles jury on Wednesday ordered Apple and Broadcom to pay $1.1 billion to a California university for infringing wifi technology patents in what is thought to be one of the largest patent verdicts ever.

Apple was ordered to pay $837 million and Broadcom must pay $270 million to the California Institute of Technology.

Caltech had sued both tech giants in 2016, alleging that Apple products including iPhones, iPads and Apple Watches used Broadcom components that infringed on its patents related to wireless data transmissions.

While Broadcom made the chips at issue in the trial, jurors may have hit Apple with a bigger tab by because it makes billions of dollars selling iPhones and other devices that incorporate the technology.

"Think of the patented technology as a piece of property that was stolen and sold to someone else," said analyst Rob Enderle of Enderle Group.

"It doesn't matter if they had a go-between steal it for them, they were not allowed to benefit from a theft even if they were downstream."

Tangled past

The analyst, who did not attend the trial, wondered whether an Apple relationship with Broadcom strengthened years ago during legal brawling with US chip giant Qualcomm played into the jury's decision.

Some industry insiders believe Apple supported Broadcom's failed bid to buy Qualcomm in a hostile takeover campaign.

Broadcom in 2018 abandoned efforts to take over US smartphone chipmaker Qualcomm after its bid was blocked by President Donald Trump over national security concerns.

Qualcomm had rejected the unsolicited offer from Broadcom, which makes an array of chips for wireless communications, set-top boxes and electronic displays.

Broadcom last year moved its headquarters from Singapore to California.

Meanwhile, Apple and Qualcomm agreed in early 2019 to "dismiss all litigation" against each other worldwide in what had been a sprawling battle over royalty payments.

Repercussions?

Both Apple and Broadcom planned to appeal the verdict.

"While we thank the members of the jury for their service, we disagree with the factual and legal bases for the verdict and intend to appeal," Broadcom said in response to an AFP inquiry.

In court documents, Apple and Broadcom had said Caltech's claims "are based solely on the incorporation of allegedly infringing Broadcom chips in Apple's iPhone, Mac, and other devices."

"Broadcom manufactures the accused chips, while Apple is merely an indirect downstream party whose products incorporate the accused chips," court filings argued.

Broadcom was the main target of the lawsuit but Apple was also named as it is one of Broadcom's biggest customers.

Caltech welcomed the ruling.

"As a nonprofit institution of higher education, Caltech is committed to protecting its intellectual property in furtherance of its mission to expand human knowledge and benefit society through research integrated with education," the institute said.

Analyst Enderle expected repercussions from the ruling to go beyond Apple to other Broadcom customers who used the chips at issue.

"Caltech will go down the list of Broadcom customers and look for out-of-court settlements with anyone who used the compromised technology," Enderle said.

The analyst wondered whether the jury award signaled a new onslaught of patent battles in the tech industry.

"Typically, we go through waves of patent wars," Enderle said.

"I think it's a case where, after a period of time, people age out or forget that there are significant penalties for this stuff."

Coalition MPs say Huawei must be kept out of 5G network roll-out

DutchNews, April 12, 2019

Photo: Depositphotos.com

Two of the four Dutch coalition parties have said they do not want Chinese telecoms company Huawei to be involved in rolling out 5G networks in the Netherlands, following the FD’s revelations about industrial espionage at ASML, the Financieele Dagblad said on Friday. 

GroenLinks, the biggest Dutch opposition said in February that Huawei should be excluded from the tender process because of security fears. 

‘It is very simple,’ VVD MP Wybren van Haga told the paper. ‘If a company does not keep to the rules, you don’t play with them. China clearly does not respect the international rules of trade and has no respect for the intellectual property rights of western tech companies.’ 

The CDA is also opposed to Chinese involvement in the project. 

On Thursday, the Financieele Dagblad said Chinese spies have stolen a large number of company secrets from chip machinery maker ASML. 

The spies were highly placed R&D workers who were able to get away with source codes, software, price strategies and secret user manuals, the paper said. It bases the claims on its own research and Californian court documents. 

The scandal comes at a sensitive time for the government, which is currently trying to draw up a formal strategy to deal with Chinese economic interests. 

Earlier this month, the AIVD security service warned about the risks of using Chinese equipment for crucial infrastructure and said digital attacks and espionage by countries such as China, Iran and Russia pose a real threat. 

In the US Huawei has been accused of espionage on behalf of the Chinese authorities and the US ambassador to the Netherlands, Pete Hoekstra, told Trouw earlier this year that the company should be kept out of the Dutch market. ‘This is very, very important to us,’ Hoekstra is quoted as saying.

Related Article:

Chinese spies steal secrets from Dutch chip maker ASML: FD

Chinese spies steal secrets from Dutch chip maker ASML: FD

DutchNews, April 11, 2019

Photo: ASML

Chinese spies have stolen a large number of company secrets from chip machinery maker ASML, the Financieele Dagblad said on Thursday. 

The spies were highly placed R&D workers who had indirect ties to the Chinese ministry of science and technology and were able to get away with source codes, software, price strategies and secret user manuals, the paper said. It bases the claims on its own research and Californian court documents. 

The paper says the theft took place at the Dutch firm’s operations in San Jose in the US and was orchestrated by competitor XTAL, which was established by former ASML workers in 2014. A year later XTAL was able to lure away ASML clients such as Samsung. 

The FD research shows that XTAL’s Chinese parent company Dongfang Jingyuan has ties to the Chinese ministry and had been given subsidies for a project aimed at boosting China’s position in the chip machinery market. ASML is currently world leader. 

The paper points out that the scandal comes at a sensitive time for the government, which is currently trying to draw up a formal strategy to deal with Chinese economic interests. 

Earlier this month, the AIVD security service warned about the risks of using Chinese equipment for crucial infrastructure and said digital attacks and espionage by countries such as China, Iran and Russia pose a real threat. 

However, the FD says, China is an important market for ASML and has enormous growth potential.  Nevertheless, senior company officials are concerned about the Chinese approach to intellectual property, the paper said. 

Neither XTAL or Dongfang Jingyuan were willing to comment on the claims, the FD said. 

At the end of 2018, a court in California ordered XTAL to pay $233m in damages to ASML after ASML took the company to court for the ‘misappropriation of trade secrets’. The ruling has been low profile until now, the paper said.

World's first 5G phone released in South Korea

Yahoo – AFP, April 5, 2019

South Korea's three mobile carriers held launch parties for Samsung's
Galaxy S10 5G, which costs at least $1,200 (AFP Photo/JUNG Yeon-Je)

Samsung Electronics on Friday released the Galaxy S10 5G, the world's first available smartphone with built-in fifth-generation communications technology, as South Korea seeks to build a lead in the transformative system.

On Wednesday the South became the first country to commercially launch nationwide 5G services, with three superfast networks going live offering data speeds that allow users to download entire movies in less than a second.

Hours later US giant Verizon began commercial services in Chicago and Minneapolis, after rival AT&T made a 5G-based system available to selected users in parts of 12 cities in December.

South Korea's three mobile carriers -- SK Telecom, KT and LG Uplus -- held launch events across Seoul for the Galaxy S10, whose base version costs 1.39 million won ($1,200).

Interactive virtual-reality displays and robot demonstrations were on show to tout the capabilities of the latest iteration of mobile internet speed, and new users were excited about the possibilities, especially live streaming of sports games and university lectures.

"I watch a lot of videos often, movies and lectures," said buyer Shim Ji-hye, 38. "I hope faster speeds will help me manage my time better."

Another user said he was most excited about virtual reality content -- which includes games and even "celebrity VR dating" apps according to the country's mobile carriers.

With 5G, said researcher Lee Sang-yoon, VR content "can be enjoyed in real time with no delay... I'll be able to enjoy it in better resolution and speed".

Before Friday's roll-out of the Samsung phone, the 5G service had been restricted to a handful of specially selected users in South Korea.

Rival manufacturer LG is due to launch its V50 ThinQ, another 5G phone, in the South later this month, while in the US, Verizon's network works with Lenovo's Moto Z3 smartphone fitted with a special accessory.

Commercialising 5G gives South Korea the chance to build around the technology, which is crucial for the future development of devices such as autonomous vehicles and the Internet of Things.

It is expected to bring about $565 billion in global economic benefits by 2034, according to the London-based Global System for Mobile Communications, an industry alliance.

The implications of the new technology have pitted Washington against Beijing -- whose firms dominate 5G technology -- in an increasingly bitter standoff.

The US has pressed its allies and major economies to avoid 5G solutions from Chinese-owned telecom giant Huawei, citing security risks that technological backdoors could give Beijing access to 5G-connected utilities and other components.

Chinese entities own a total of 3,400 5G patents -- more than a third of the total, according to data analysis firm IPlytics -- with 1,529 of those registered by Huawei.

South Korea comes next, with its companies holding 2,051 patents, while US firms have 1,368 together.

Neither KT nor SK Telecom use Huawei technology in their 5G networks, but it is a supplier to LG UPlus, the companies told AFP.

China's top court to handle intellectual property appeals

Yahoo – AFP, December 30, 2018

China is mulling a series of steps to strengthen protections against
IP theft (AFP Photo/CHANDAN KHANNA)

China's top court will rule on intellectual property cases for the first time from January 1, the government said, elevating the handling of an issue that has become a key complaint in the trade war with the US.

Washington and Beijing are currently in talks to resolve a bruising trade spat that has spooked markets worldwide. The two sides imposed tit-for-tat tariffs on more than $300 billion worth of goods this year, before agreeing to a 90-day truce on December 1.

The United States, along with the European Union, has long complained about lax enforcement of intellectual property rights in China. Forced technology transfers have been another major bone of contention for foreign companies operating in China.

Deputy Chief Justice Luo Dongchuan said Saturday that from the start of 2019 the Supreme Court would begin handling appeals on intellectual property rights cases, state-run Xinhua news agency reported. Such cases were previously handled by provincial-level high courts.

The move will "help prevent inconsistency of legal application and improve the quality and efficiency of trials," Luo said.

China is mulling a series of steps to strengthen protections against IP theft. IP includes intangible creations like patents, trademarks and copyrights.

The country's patent law is being amended to increase the compensation amount by up to five times.

Another draft law presented at a recent meeting of China's legislature, the Standing Committee of the National People's Congress, allows victims of intellectual property theft to sue for damages.

China's legislature also announced it is looking at a new law governing foreign investment that would prevent the forced transfer of technology and give foreign firms the same privileges as Chinese companies.

Chinese courts heard a total of 213,480 IP cases in 2017 -- 40 percent more than in 2016 and double the number heard in 2013, Xinhua reported.

Samsung prevails over Apple in $399 mn patent appeal

Yahoo – AFP, Rob Lever, December 6, 2016

Samsung is the world's largest producer of smartphones (AFP Photo/
DON EMMERT)

Washington (AFP) - The US Supreme Court on Tuesday overturned a $399 million patent infringement penalty imposed on Samsung for copying Apple's iPhone design, in a case watched for its implications for technology innovation.

The justices ruled 8-0 that Samsung should not be required to forfeit the entire profits from its smartphones for infringement on design components, sending the case back to a lower court.

While the ruling was short on specifics, analysts said it was likely to curb litigation from patent holders expecting to reap big profits from infringement on a component.

The 11-page ruling found that the $399 million penalty -- one element of a major patent infringement case -- was inappropriate because it represented "Samsung's entire profit from the sale of its infringing smartphones" for copying the iPhone's "rectangular front face with rounded edges and a grid of colorful icons on a black screen."

But the court stopped short of delving into details of how the lower court should determine the penalty.

Justice Sonia Sotomayor wrote in the opinion that "doing so would require us to set out a test for identifying the relevant article of manufacture... and to parse the record to apply that test in this case."

The court sent the case back to the appellate court in Washington to resolve the details.

The case is one element of the $548 million penalty -- knocked down from an original $1 billion jury award -- Samsung was ordered to pay for copying iPhone patents.

No clarity

Observers had been watching to see how the court -- which had not taken up a design patent case in more than a century -- would tip the balance between technological innovation and protecting intellectual property.

Dennis Crouch, a University of Missouri law professor and co-director of the Center for Intellectual Property and Entrepreneurship, said the ruling may leave both sides disappointed because it sets no real precedent.

"Although the case offers hope for Samsung and others adjudged of infringing design patents, it offers no clarity as to the rule of law," Crouch said in a blog post.

Crouch said the court allowed for damages to be applied at the component level but also indicated that the product as a whole is "an article of manufacture," leaving the matter open to interpretation.

"Thus, it will be up to courts to figure out which level (of damages) applies in particular cases," he wrote.

Samsung won the backing of major Silicon Valley and other IT sector giants, including Google, Facebook, Dell and Hewlett-Packard, claiming a strict ruling on design infringement could lead to a surge in litigation.

Apple was supported by big names in fashion and manufacturing. Design professionals, researchers and academics who said they had no financial interest in the case filed an amicus brief arguing on the basis of "fundamental principles of visual design," citing precedents like Coca-Cola's iconic soda bottle.

'Sigh of relief'

Florian Mueller, an intellectual property analyst who writes a closely followed patent blog, wrote that "large parts of the (US and global) tech industry will breathe a sigh of relief now" even if the case is not settled.

Ed Black, president of the Computer & Communications Industry Association, which represents major tech firms, welcomed the ruling.

"This was a pivotal court case for the technology industry and it is encouraging to see the law interpreted and applied in a way that makes sense in a modern era and protects both inventors and innovation," Black said.

The lower court's interpretation of design patents, Black said, "would have had a chilling effect on investment and the development of products -- especially in the tech sector."

Brian Love, a law professor who follows technology at the University of Santa Clara, said it was noteworthy that the top court declined to provide detailed guidance on how to resolve the damage award.

"The district court may well end up allowing the entire amount to stand, but it seems more likely that the award will be substantially reduced," Love said.

Still, Love said it may dissuade companies from launching new lawsuits on design patents

"Interest in design patents spiked following Apple's first jury verdict in 2012," he said.

"Companies suddenly saw design patent rights as a potential gold mine. Now, it seems likely that assertion of design patents will return to being a rare occurrence."

Related Article:

Appeals court slashes Samsung patent fine to Apple

Appeals court slashes Samsung patent fine to Apple

Deutsche Welle, 2 March 2013

A judge has almost halved a more than $1 billion fine against Samsung payable to Apple after a patent lawsuit. The San Francisco court ruled that the previous fine was calculated on false premises and should be reduced.

On Friday, US District Court Judge Lucy Koh ruled that Samsung Electronics should pay Apple a fine of $598 million (459.4 million euros) rather than a previous patent penalty of over $1 billion. The original fine was issued when a trial found that 14 Samsung products had violated Apple patents.

Koh struck $450.5 million from Samsung's tab, saying that Apple had sought damages from the moment of the products' launch, not the point when the legal complaint was filed. The jury based the damages awarded on Apple's estimated loss figures, Koh said, but these figures pertained to a longer time period.

"There are eight phones for which the jury awarded 40 percent of Samsung's profits for the entire period, but, for which, during some of the damages period, infringer's profits was not an authorized remedy," the ruling read. "The only remaining possibility is to conduct a new trial on damages for these eight products."

Koh was critical of Apple for choosing the longer time period on calculations for some models of the Galaxy SII smartphone and the Galaxy Tab tablet computer.

"The need for a new trial could have been avoided had Apple chosen a more circumspect strategy or provided more evidence to allow the jury or the court to determine the appropriate award for a short notice period," Koh's rulilng said.

Samsung 'pleased,' Apple declines comment

Samsung issued a statement late Friday after the ruling, saying it was "pleased" and "intends to seek further review" of the multimillion-dollar damages awarded to Apple.

"We are also pleased that the court earlier found that Samsung had not acted willfully, denied Apple's request for a permanent injunction, and denied Apple's motion for increased damages," the South Korean electronics company said in a statement.

Apple did not immediately comment on the ruling.

The original ruling in August was seen a decisive victory for Apple, which says patents applied to its iPhone and iPad were violated by Samsung. The company had also sought, as yet unsuccessfully, for some Samsung products to be banned from the US market altogether.

msh/mkg (AFP, AP)