Ina Fried

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Apple Offered to License its Patents to Samsung for $30 Per Smartphone, $40 Per Tablet

Apple executives have testified the company was “shocked” when Samsung debuted its first Galaxy phones. But, considering the Korean company was a major supplier, Apple apparently was also willing to make a deal with its rival.

In October 2010, Apple offered to license its portfolio of patents to Samsung provided the Korean company was willing to pay on the order of $30 per smartphone and $40 per tablet.

“Samsung chose to embrace and imitate Apple’s iPhone archetype,” Apple said in an Oct. 5, 2010 presentation to Samsung. “Apple would have preferred that Samsung request a license to do this in advance. Because Samsung is a strategic supplier to Apple, we are prepared to offer a royalty-bearing license for this category of device.”

Apple also offered to give Samsung a 20 percent discount if the Korean company cross-license its portfolio back to Apple. Apple also sought royalties on Samsung’s non-Android smartphones, including those running the Symbian and Bada operating systems.

For 2010, Apple estimated that Samsung would have owed Apple approximately $250 million, an amount it noted was far less than Apple was spending on components. The Oct. 5, 2010 offer was contained in the presentation, which was made public on Friday.

Two months earlier, Apple warned Samsung as early as August 2010 that it believed the company was copying the iPhone and infringing on Apple patents.

“Apple has identified dozens of examples where Android is using or encouraging others to use Apple patented technology,” Apple said in the August 2010 presentation, which contained the headline “Samsung copying iPhone.”

“Many more Apple patents are relevant to the Android platform,” Apple said, outlining dozens of patents it believed were being infringed. “Apple has not authorized the use of any of these patents.”

Clearly those negotiations didn’t bear fruit as Apple and Samsung are in the midst of a high-stakes patent battle that includes a jury trial now taking place in San Jose, Calif. Apple is now seeking more than $2.5 billion in damages from Samsung, alleging the company’s products “slavishly copy” the iPhone and iPad, infringing on Apple’s patents and trade dress.

During his testimony on Friday, Apple patent licensing director Boris Teksler made reference to the presentation..

“We didn’t understand how a trusted partner would build a copycat product like that,” Teksler testified, adding that late CEO Steve Jobs and then COO Tim Cook spoke to Samsung about the issue.

The testimony helped perk up what was a largely dull day in court as Apple called expert after expert to support its contention that Samsung infringes on its patents. Samsung attorneys, meanwhile, spent as much time or more aiming to shoot down the experts and their studies. Samsung has now used more of its allotted time before the jury even though it won’t start calling its own witnesses until Monday.

Apple also used the expert testimony to introduce two more internal Samsung studies showing that the Korean company saw a need to follow in the iPhone’s footsteps. Those largely echo an earlier study already put into evidence that offers a feature-by-feature comparison of the original Samsung Galaxy with the iPhone, frequently recommending Samsung make its products more like Apple’s.

Apple showed highlights of the studies earlier earlier on Friday during the testimony of several of its patent experts. The company also managed to introduce the full reports into evidence.

Here’s the PDF of Apple’s October 2010 offer to Samsung.

Samsung Apple Oct 5 2010 Licensing


Apple versus Samsung Full Coverage

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Another gadget you don’t really need. Will not work once you get it home. New model out in 4 weeks. Battery life is too short to be of any use.

— From the fact sheet for a fake product entitled Useless Plasticbox 1.2 (an actual empty plastic box) placed in L.A.-area Best Buy stores by an artist called Plastic Jesus