Samsung to Face Huge Bond for Patent Infringement Case Versus Apple

Samsung Group HQ in Samsung Town, Seoul | Wikipedia

Samsung Group HQ in Samsung Town, Seoul | Wikipedia

Samsung products found to infringe Apple products may be subject to sales ban. That is if the US International Trade Commission affirms and adopts an initial ruling filed by one of its administrative judges. In relation to this, the said judge recommended that the South Korean tech giant post a huge bond worth 88 percent of its US smartphone sales.

Hefty Sanctions, Coming to Samsung

Although last Friday’s filing does not necessarily mean that Samsung will face a sales ban, Judge Thomas Pender determines that the remedy and ban could pose huge sanctions for the company. That is if the six-member Commission agrees with his findings and adopts his suggested solution.

The recommendations are said to be a continuation of Pender’s preliminary ruling that was handed down in October 2012. It is stated in the ruling that Samsung was found infringing on four Apple design utility patents.

Florian Mueller of FOSS Patents also noted that the proposed sanctions consist of a sales ban. It is a simultaneous cease-and-desist order which prohibits the sale of “commercially significant” quantities of infringing products. The proposed sanctions also have a series of bond requirements.

Judge Pender: Pushing on Overweight Bond Rate

In relation to this, it was reported that Samsung was actually pushing for a 4.9 percent royalty rate based on “price differential analysis.” However, the ALJ suggested a requirement of 88 percent of the value of all mobile phones, 37.6 percent of all tablet computers, and 32.5 percent of all media players that are found to infringe on Apple’s patents.

The bonds would be posted during the Presidential review period. It is said that the review period could last 60 days after a final ITC decision in favor of a sales ban.

On the other hand, and ITC staff said that Pender’s smartphone bond rate is based on an overweight price differential between each company’s products. That’s because Samsung sells higher volumes of lower-priced devices, which don’t compete against Apple’s iPhone.

But Judge Pender disagreed, pointing out an internal Samsung document that says that the US smartphone market was “becoming a Two Horse Race Between Apple & Samsung.” This suggests that the South Korean tech giant was strategically undercutting Apple’s offerings.

Meanwhile, the ITC case is different from the watershed Apple vs. Samsung court trial. Here, Apple is also seeking to ban sales of infringing Samsung products. There is also an upcoming federal court case, which is set to start on February 14.

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