As Samsung seeks revenge, Apple is hoarding LTE-related patents

September 4, 2012
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The Apple v. Samsung legal saga is far from a conclusion, in spite of the seemingly crushing defeat that Samsung suffered in a San Jose court two weeks ago. Not only are the legal proceedings in the case not finished (Samsung will ask for an appeal), but the two technology giants are facing each other in many other courts from around the world.

Furthermore, nothing can prevent the two companies from starting new legal actions, which is precisely what Samsung is apparently planning to do. Industry talk is that the Koreans are just waiting for the release of the new iPhone (an announcement is due on September 12), which will be the first phone from Apple to feature LTE connectivity.

Samsung is a major holder of LTE-related patents. According to the Korean outlet The Chosunilbo, Samsung Electronics holds 819 LTE patents, which makes it first among the LTE contributors, with a 12.7% share. Some analysts think that the Koreans will have a good chance to take the LTE iPhone 5 down (obtain an injunction and/or damages), because they own such a large portion of the crucial patents related to LTE.

Up until now, Samsung only managed to obtain an injunction against the iPhone in South Korea, and even that was half a victory, because Apple obtained an injunction against some Samsung products as well. But with LTE, the Koreans might prove far more effective.

For Apple, an injunction on the iPhone 5 in the US or other major market could have grim consequences. Unlike their Korean rivals, Apple only sells one device (I am not counting the older versions), which brings in the majority of its profits. A severe disruption of Apple’s main business might prove too much to bear, even with all the billions that the Cupertino giant has been saving for rainy days.

It’s no wonder that Apple has engaged in a silent race to acquire as many LTE-related patents as possible. And boy, they acquired them. The Chosunilbo says that last year, Apple had no patents registered with the body that oversees the LTE standard, the European Telecommunications Standards Institute (ETSI). This year, Apple has 318 patents on its name, of which 44 they developed on their own and the rest they acquired from Nortel and Freescale. Apple also has the largest stake in Rockstar Bidco, a patent consortium that bought 4,000 telecom patents from the now defunct Nortel last year. This gives it access to another 116 patents.

Bottom line, Apple is now a major LTE intellectual property holder. With 434 LTE patents, Tim Cook’s company now ranks among the top five IP holders registered at ETSI. Those who were hoping that Samsung would have an easy time crushing their rivals using its LTE patent trove could be disappointed.

Nevertheless, in patent law, the number (or the scope) of patents that a company holds is pretty much irrelevant. You can bring down Goliath with just one well-aimed rock. Of course, it doesn’t hurt to have an entire arsenal of missiles to fling at your opponent.

The fall shapes up to be very interesting in the mobile industry. The patent wars will reach a climax, and the way the conflict unfolds in the next months will have long lasting effects on the world of tech.

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