Apple offered to license its patents to Samsung - for $30 per smartphone
Apple (NASDAQ:AAPL) offered to license its patents to Samsung Electronics if Samsung would pay $30 per smartphone and $40 per tablet, despite what Apple saw as Samsung's decision to "embrace and imitate" its iPhone, according to court documents.
The figures and nature of the offer came out of court documents filed as part of Apple's patent-infringement trial against Samsung. While it has been reported that Apple had offered Samsung an opportunity to license its patents, the details were not previously known. Apple concluded that because Samsung was a strategic component supplier to Apple, Apple was "prepared to offer a royalty-bearing license for this category of device."
According to the documents, first unearthed by AllThingsD, in October 2010 Apple offered Samsung the opportunity to license its patents for $30 per smartphones, covering Android, baba, Symbian and Windows phones. Apple also offered the same deal at $40 per tablet, which would be reduced to $30 per tablet over two years. Additionally, Apple said it offered a 20 percent discount if Samsung was willing to cross-license its patent portfolio back to Apple. As early as August 2010 Apple said it warned Samsung explicitly that Samsung's phones were copying Apple patents without authorization.
The royalty rate for smartphones would have been around 5 percent for a $600 unsubsidized smartphone. And Apple estimates that in 2010 the deal would have cost Samsung $250 million, which is less than what Apple was spending on components. Apple is seeking up to $2.5 billion in damages at the trial.
Meanwhile, the trial continues and late last week Apple called the last of its witnesses. Apple used the witnesses to show how consumers confused Samsung's devices for those of Apple. Apple has said Samsung is infringing on its design and technology patents, but Samsung has said it is not and those patents are not valid. Samsung has also countersued Apple, and has argued that Apple is infringing on its patents related to wireless standards.
Samsung was told on Friday that it will not be able to use testimony from one of its key designers, Hyong Shin Park, according to an order signed by U.S. District Judge Lucy Koh, who is presiding over the closely watched case. Park has said that Samsung was inspired by a "bowl of water" in designing its F700 phone, not the iPhone. Apple has argued that the F700 is not one of the products Apple claims infringe on its patents, and therefore the Samsung designer's testimony is not relevant to the case.
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