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Apple wanted Samsung to pay $9 in royalties per Windows Phone, but what for?

WP Central

In the ongoing saga between Samsung and Apple, documents came out late last night from the court case that detailed a proposal by Apple to charge Samsung for royalties on their smartphones.

It’s interesting for a few reasons. For one, Apple almost never enters into cross-platform patent royalty deals with other companies, specifically if it is tied to any of their “product differentiating” technologies. Back in 2010 though, Apple was willing to make an exception to this with Samsung because they are a major parts supplier for Cupertino and they wanted to preserve that relationship. Apple was also “shocked” at just how much Samsung was willing to allegedly copy the iPhone.

In the documents, Apple spells out some license terms it was willing to offer Samsung back in October 2010—just a few weeks before Windows Phone 7 became available.  Although Android was offered a $24-per-device royalty fee, which yes, is extremely high, Apple evidently also wanted $9 per ‘Windows Mobile 7’ device as well.

WP Central

Apple's proposed royalty payment plan for Samsung (Oct., 2010)

Last night we had a late night powwow with the Mobile Nations editors to try and figure out just what Apple was claiming a royalty for on Windows Mobile/Windows Phone 7 (Apple refers to both in the document). As far as we can tell it comes down to three possible items:

  1. Hardware design e.g. the Omnia II
  2. Software interface e.g. TouchWiz
  3. Cross-licensing agreements with Microsoft

WP Central

TouchWiz circa 2010

None of that is made clear in the documents though so they’re just assumptions on our part. TouchWiz was an issue of contention with Apple since it was used extensively on early Samsung Android phones and yes, it looked quite similar to the iPhone’s main screen (depends on how vague you want to get).  The same interface though was used on Windows Mobile 6 and 6.5 devices like the Omnia II.

WP Central

Apple's main complaints against Samsung

But Apple specifically mentions the Samsung BlackJack II (later renamed ‘Jack’ because RIM sued Samsung for allegedly stealing their name, not to mention their design). Here the document doesn’t mention what Apple is charging Samsung for, just what they are giving them a “discount” on in the agreement. Samsung would get a discount of 40% for using “Microsoft licensed O/S Tech” because Apple and Microsoft have a cross-licensing agreement in place that goes back to the 1980s. The 40% discount though is completely arbitrary. 

The third option could be hardware related e.g. the Omnia II looking a lot like an iPhone “slab” design. We used to mock all the Apple clones back in 2008-2009 when Samsung and HTC all of sudden started making large-screen devices. Apple evidently noticed too. (And yes, our site is that old, thank you).

WP Central

Deal or no deal?

In the end, Samsung did not take the “offer” which in all honesty was quite outrageous—remember, Microsoft entered a deal in 2011 with Samsung to collect Android royalties, reportedly at $15 a device, bringing a “free OS” up to a total of $39 license fee per phone. We’re still not certain on exactly what grounds Apple was demanding money from Samsung for Windows Mobile/Windows Phone 7 (this proposal pre-dated the Samsung Focus by a few weeks) but Apple was going after Samsung on Android, Windows and even Bada OS.

WP Central

Base of $30 per phone but with "discounts" added later

Samsung does have a reputation for borrowing heavily from its competition. We mentioned earlier how RIM didn’t take to kindly to the ‘Blackjack’ name and when compared to their Blackberry and when Samsung was done with RIM it looks like they moved on to Apple with their Galaxy series which reportedly made Apple’s Steve Jobs apoplectic. Heck, we just noticed on our Samsung Tab 10.1 the screencap sound is the same as on OSX.

WP Central

'Blackjack' vs 'Blackberry': RIM too did not like Samsung's "borrowing" of IP, later sued 

In the end it will be certainly be interesting to see what happens with Samsung and Apple in court. Apple seems to be on a winning streak lately and if they should prevail, it will be fascinating to see how it carries over to Samsung’s proposed Windows Phone offerings for Windows Phone 8, if at all.

Source: Scribd; via All Things D


Reader comments

Apple wanted Samsung to pay $9 in royalties per Windows Phone, but what for?


Wow, I am going throw up. This IP court case is making me sick. Apple is just mad that Samsung is beating in the phone game. Apple knows they aren't going to last long without their god (Jobs), the iPhone is staling and they don't know what to do. They have 3 years to go big or they will be 5% of the market again.

Considering this started almost 4 years ago when Samsung wasn't even close to beating Apple, your assumptions are unfounded.  And if Apple ends up at 5% of the market, they will still be extremely profitable. 

Another case of "I'm taking my toys and going home" from apple. And that blackjack looks nothing like that pearl other than having two tone buttons, which since when does any one company own rights to button color?

I dunno. It's clear to me that the BlackJack was a clear attempt to make a Windows Phone-BlackBerry knock off. 

Samsung did relent and re-named it to just 'Jack' so there must have been something there.

I'm not a fan of either company in this trial but Samsung does have a reputation for lifting ideas where Apple, less so.

Well, we're talking about the brand though. By the time a court settlement was reached, the BlackJack II was coming out and it was renamed simply 'Jack in order to comply with the settlement.

Wow, let’s start; in Steve Jobs’ own words: “Good artists copy, great artists STEAL”; so Apple’s philosophy is based on exactly that, copying. Need more prove? Jobs’ own words again: “We have been ‘ShameLESS’ about stealing great ideas”, I wonder what he meant about it? So all companies copy, mainly Apple. But let’s see some examples commericialized as innovation: ‘iPhone’, it is a copied name from a Linksys IP Phone that had to be settled with Cisco at the time and came from Infogear originally, which was a telephone with a web browser from 1998. iPad’s form factor, was according to Apple, copied in the Galaxy Tab, yet there is that Samsung’s 2006 photo frame that was copied by the iPad, need prove:
Shall we continue; exterior design, the form factor from original iPhone looks like that from 2006 LG Prada, not like the iPod at the moment, need prove:


I'm not a fan of either company in this trial but Samsung does have a reputation for lifting ideas where Apple, less so.
You're joking right?  Jobs even said apple blatenly steals from others.  He took pride in it.  So if Samsung did steal ideas from apple it was probably jobs fault for saying apple steals on video.  If apple is going to steal from others others have the right to steal from apple. 
I was just reading which makes apple look really bad.  There are 4 patents between 2005 and 2006 that are of phones that look like the iphone and they even mention the LG prada which was brought out in 2006 and had the shape of the iphone.
Samsung explained their case very well and I don't think apple did.  So far it looks like (and I hope) apple is loosing.

Jobs' plan for "thermonuclear war" may be the market catalyst for WP. Both Sammy and Fruity are starting to sport shiners, IMHO.

If Apple's fees are forced on Samsung, it could be good for Windows Phone because it'll be cheaper to license it on their phones than Android.

Apple is just being apple again I don't see how any of this would fly they are the biggest bunch of fucking crybabies I have ever seen

Alright you made your point jeez all I'm saying is that I hear more frequently about apple than Microsoft this being the first time I hear about apple asking licensing fees.

Even if Samsung copied apple, apple copies Samsung as well. If Samsung copied with icons apple copied Samsung, LG and 4 patents from 2005 and 2006 from Japan and Korea. apple also copied Android's notification system. On the new OSX they copied the notifacation system that was suppose to be on Windows Longhorn. apple copies a ton, they just get pissed when others copy from them. Boo hooo!

This was an offer made to Samsung prior to all this court buisness to try and keep it from happening. Obviously Samsung didn't take it, and from what I can tell the 9$ on WP is for the trade dress of the hardware (Im looking at you Omnia 7) and nothing to do with the OS/software.

ICS is only a minor improvement on the original code, its purpose was to merge the code from 2.x and 3.x... JB is mostly bug fixes and not many "new" features.

My 'plastic' Samsung focus has survived more drops and flips than any iPhone I've seen. They may feel flimsy but they can at least eject the battery to release energy after a drop...

Samsung isn't going away they have way to many products on the market... Apple has a ton of cash to keep jabbing at Samsungs side. In the end Apple will have gained absolutely nothing other wasting time with Samsung in court. I am sure it will show how frivolous patent suits can be to the world.

Samsung was basically forced to redesign their UI on the Galaxy series, removing the "drawer" and making it non-Phone like. In that regard, Apple has been succesful in their view from keeping Samsung from aping all their work, so I'm not so sure it's frivolous.

Apple also has to protect what they see as their IP. If they let Samsung bend the rules then it opens the doors for other companies to do the same.

Except Apple has decided to take it too far. Some of the stuff they are alleging Samsung copied is downright silly (the battery icon shows how much battery is left, for example, or the unlocking grid on Android). Heck, some features that they allege Android is mocking and infringing patents for didn't even exist on iOS back then. I'm all for Apple trying to protect its IP but they've clearly chosen to ride this wave as much as they can to maximize their gains from it and that makes them a patent troll.
Samsung obviously deserves some of it for making products that do try to imitate the look and feel of iOS (do a poor job at it, obviously) but it's no way near what Apple is claiming.

In a way, this is good for WP since it'll only force OEMs to look into it more and if the price of Android keeps going up, WP is the only choice left.

I'm rooting for Apple here, but only really because Samsung is a huge brand, and I'd like to see them forced into putting a bit more effort behind Windows Phone. That, and because TouchWiz really WAS a blatant, ugly copy of iOS' mildly unattractive UI.

This is scary ,this court case could be the first big step that allows Apple to start nocking off cell phone makes.

Actually probably not. if Apple wins this court case it will only mean that cell phone makers will have to innovate. Take HTC for example they have quickly adapted to any challenge Apple has made. Samsung just copied Apple too deeply to quickly change things. and MS has a completely different OS and their own set of patents along with cross liscencing deals.

Samsung is notorious for "borrowing heavily" from others. Honestly, they have grown far too powerful and really don't think twice about copying then tweaking slightly.

Apple is making outrageous demands and clearly didn't enter into good faith negotiations. Tim Cook may not be as outwardly vocal as Jobs but he might be more deadly.

Remember alot of this stuff started back in 2010 when Samsung wasn't as big and still fond of copying rather than being original.

If you think Samsung is only copying things from others.... You are a fool... Have U tried their smart tv, or have U looked at the android os from Samsung (as the HTC has a very different android) have you looked at the home appliances... I can go on.. Lets talk about all the current phones or tablet right now.. None of them look like apple product.... There windows 8 slate looks better then iPad and it runs windows..

Apple are worried that Samsung will be causing problems as they are making better mobiles, better tablets and now with windows 8 launch next month, apple will lose more market share to Samsung... Its worse then boning apple... Samsung TV's are already best... Wait rill you see the slate windows 8 RT/PRO...

FWIW - to me... this whole court case is moot...
1. no one thinks the Galaxy phones look like an iPhone.
2. no one thinks the Android OS looks like iOS
I'm still amazed at how jealous Apple can be about their products. If you look at the HDTV guys, they all get along quite well for selling similar products...

And that makes me wonder...

Anyone think that as soon as Apple sells HDTVs - will Samsung sue Apple for "Copying" the rectangle design of their HDTVs?
: \

"1. no one thinks the Galaxy phones look like an iPhone."

Err, exactly. That's because Samsung was forced to change their design and UI to fend off Apple. The GSIII is the ultimate culmination of that. But this lawsuit started with the GSI which is what is at contention here and when Apple sued Samsung.

You can't sell a product, profit from it when it is allegedly copied and get away with just because your new product didn't copy it.

You could argue that Samsung's success started with a copy-infringing product and they rode Apple's coattails to success. Now they're doing alright but they got to that point by thievery. That is what is being alleged.

"2. no one thinks the Android OS looks like iOS"

Once again because Google is distancing itself from Apple as much as possible because their OEMs are being sued left and right.

This lawsuit started years ago and that is what is at issue. Not where Samsung, the Galaxy S and Android are TODAY but where they were years ago.

You can't just cheat to success and get away with it. At least that is what Apple is claiming.

What a thoughtful remarks. I quite agree you can't cheat your way to success and pretend as if nothing has happened.

..."You can't just cheat to success and get away with it. At least that is what Apple is claiming"...
iPad’s form factor, was according to Apple, copied in the Galaxy Tab, yet there is that Samsung’s 2006 photo frame that was copied by the iPad, need prove:
Shall we continue; exterior design, the form factor from original iPhone looks like that from 2006 LG Prada, not like the iPod at the moment, need prove:

Is Microsoft's legal team just that good--because there was a time we would continually hear of "licensing agreements" between Android smartphone makers and Microsoft, without this much dispute. I mean, this Apple vs. Samsung case is very different...but it's interesting to see how Microsoft managed to get so many to fork over royalties.
Side note, the cross-licensing agreement between Apple and Microsoft mentioned here sounds like interesting stuff to read about, especially since it goes far back so long. Anybody know anything more about it?

Apple was saved from collapse on 1997 by a sizable cash infusion by Microsoft. One condition of the Microsoft bailout was a patent cross-licensing deal and an end to all of Apple's nuisance suits.

MS paid nearly what Apple was worth for a mere 12% of the company.  If Gates was Jobs, he wouldn't have done anything of the sort and bought Apple outright.

The important thing was Microsoft's commitment to continue developing Office for the Mac - the stock investment was minor and invovled non-voting shares (more a show of confidence than anything). Interestingly this was as a direct result of lawsuits over GUI patents.

It must have the hardware aesthetics. There's no legal way for Apple to sue Samsung for Windows software because Microsoft (unlike Google) indemnifies anyone who uses their software.

They can still sue - indemnification doesn't prohibit lawsuits. There is also the possibility that any suit would be unrelated to WP7 specific issues and Samsung would be on their own (sa a trade dress issue).

Someone needs to teach Samsung a lesson or two about copying others. Getting them to pay huge sums as penalties is a good idea to make them start creating new stuff instead of copying others and filling the market with cheap and flimsy material phones.

Someone shoudl teach Apple that lesson...
iPad’s form factor, was according to Apple, copied in the Galaxy Tab, yet there is that Samsung’s 2006 photo frame that was copied by the iPad, need prove:
Shall we continue; exterior design, the form factor from original iPhone looks like that from 2006 LG Prada, not like the iPod at the moment, need prove:

Apple supportes still think Samsung will be losing this case.... I am just wondering how??? Lets say a china car company makes a a cheap car looking like BMW will people think its BMW???? Come on guys what Samsung produced was looked like apple product but it was not apple...

Don't u guys see the big picture here? Microsoft is using apple to sue Samsung so they can get rid of android and use wp8 as their next main OS. Apple and Microsoft and sleeping in bed together so in the end, its apple v Microsoft. Google will be left Making Motorola hardware, lolololil

In the end, it is going to end up just as it did with computers... Apple will likely be more aesthetically pleasing than your average cheaper phone, but most people will opt for one of the low end/midrange phones made my a sea of random tech companies and running droid or WP (hopefully WP =]). It will end up being that the main incentive to buy a particular phone will be price and usability. Windows has always been cheap enough and quite usable, which is why it has a giant percentage of the pc market. Not enough people care whether their pc has aluminum plating and a cool magnetic adapter, and opt for the cheaper Windows option

I'll be honest, I was leaning torwards Apple in this case. But after seeing that they wanted to stir a hornets nest by demanding exorbitant royalties from Windows Phone, Symbian and Bada as well, I can't help but to understand why Samsung didn't agree to this. Apple made them an offer they COULD refuse. F*ck Apple.

Look at what we know about the iPhone 5 already and the yawn that was the iOS6 press snooze.  They're already claiming to have revolutionized things by releasing what's already in Android on their Next FreeBSD.NET lite.

Microsoft asks for royalties for Andorid because Android uses FAT32 and other technologies in Windows.
Apple is sueing over the rectangualr shape of the phone and that Samsun has square icons and green and red phone icons and a yellow photo icon.
HUGE deal in my eyes.  apples law suits are stupid, what other shape should a phone be and there were phones with green and red phone buttons well before the iphone came out and what are icons but graphical buttons.

Which existed elsewhere in the wild and were only submitted for patent by Apple ahead of its inventor.  There are hours of video with Steve talking about this very thing with his 'It wasn't anything until we did it.' mantra and 'everyone steals' quips.
Try going through Apple's own "out of court" settlements which are all those cases where they were in danger of being outed and had to correct that with the cash carrot and the stick of eternal litigation.

This is idiocy.  Apple's patents are for fluff so they are enforcable yet all those Motorola patents and Nokia patents are not becuase they are subject to FRAND?  Crap patent on round corner = win for Apple novel use patent but owning outright the design tech all phones are made from = hancuffs and a laughing Apple?  The patent system is shyte and "novel use" patents the worst type by far.