By Kim Yoo-chul
Samsung Electronics demanded Friday that Apple pay about 16,800 won, or 2.4 percent of the cost of iPhones and iPads, in patent royalties, for every chip used in the devices.
Apple said the amount was excessive and asked for a discount.
If it accepted, Apple would have to pay $1.4 billion in annual royalties on the basis of just the number iPhones sold last year.
The demand and rejection was made at the Seoul District Court during a hearing in a damages suit filed by Samsung, marking the latest twist in its patent war with the American firm.
Apple claimed that the Samsung demand doesn’t comply with standard FRAND (fair, reasonable and non-discriminatory) licensing terms so it has no obligation to pay the royalties.
The claim that the demand is excessive draws on the Korean firm’s 1998 commitment to license its patents to the European Telecommunications Standards Institute.
European antitrust regulators have begun investigating whether Samsung breached antitrust rules by accusing rivals such as Apple of infringing on its technology patents.
Currently, the two firms have filed lawsuits against each other in 10 countries, including the United States, Australia, France and Japan as well as Korea.
Friday’s Seoul leg of their patent war, however, is seen as an offensive by the Korean firm in a stalemate of their legal wranglings, which are not necessarily going Samsung’s way.
“If we accept Samsung’s request — paying 2.4 percent per chip patent, then the amount of royalties will go over 16,800 won, which is higher than the actual telecom chip price used in our devices,” Apple’s legal representative argued.
Samsung lawyers argued that Apple “knew” about the firm’s patents back in 2007, around the time of the first 3GS iPhone and that it declined to get a license to use the technology, saying that it wouldn’t violate FRAND terms.
Strategy Analytics (SA), a market research firm, said Samsung sold 97.4 million Galaxy and other smartphones last year, while Apple sold 93 million iPhones.
An Apple lawyer was quoted as saying that 0.2 percent of the total gadget price can be calculated for Samsung’s patents, reaffirming the company’s stance that it hasn’t violated any of the Korean company’s patents
Samsung said the proper amount of royalties should be based on device price.
“Samsung’s wireless patents are still effective,” the Korean company’s lawyers said.
Apple’s representative here, Steve Park, wasn’t available to confirm the remarks.
The court recently asked Samsung to unveil the number of its smartphone sales after accepting a request from Apple. Since the second quarter of last year, Samsung hasn’t been revealing its sales here due to “strategic reasons.”
The revelation of the demands is just the latest in an expanding conflict between the two IT giants. Apple has sued many Android partners as it seeks to maintain its leadership in the smartphone business.
Samsung’s main rivals in the mobile device market are Apple, Finland’s Nokia and Blackberry maker Research in Motion of Canada as well as other makers of phones using Google’s Android software.
Samsung recently lost to Apple in courts in Germany and some industry executives expect the companies to reach a cross-licensing deal as the patent fights are going nowhere.