Court demands Apple's telco agreements

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Court demands Apple's telco agreements

Due by midday.

The Federal Court will order Apple to produce full copies of contracts with major Australian carriers by midday today if it can't agree on a scope of document discovery with rival Samsung.

The South Korean manufacturer sought evidence that Apple had obliged carriers Telstra, Vodafone Hutchison Australia and Optus to provide greater subsidies for the iPhone than for competing smartphones.

Those subsidies improved the attractiveness of all four generations of the iPhone released locally since 2008, Samsung claimed.

Appearing for Samsung, Cynthia Cochrane argued that handset subsidies provided to Apple since the launch of the iPhone 3G in 2008 had "led to a substantial increase in the cross-respondent's [Apple's] market share and revenue" and come at the expense of relevant subsidies to Samsung phones.

"There are less subsidies to go around in respect of my client's phones," she argued in a hearing on Friday.

By securing the documents, Samsung hoped to establish lost revenues for itself and competitors as a result of Apple's back-door negotiations with carriers and prove the balance of convenience in its favour should the court grant an interlocutory injunction against the iPhone 4S.

Apple counsel, however, argued Samsung's request was little more than "a fishing expedition to try and avoid laying a proper evidentiary foundation".

Presiding judge Justice Annabelle Bennett allowed Apple and Samsung to privately negotiate a redrafted notice to produce in order to clarify what was requested from the contracts.

However, should they fail to agree before 5pm today, Apple will be required to produce the unredacted documents to Samsung's high-level barristers.

"It seems to me that it's relevant to Samsung's case, it's narrow enough at the moment if what they want in the first instance are the contracts as between the Apple entity and the relevant operators," Justice Bennett said.

All three carriers were approached for comment but none responded at time of writing.

The contracts are one of three sets of documents that remain as hurdles before the parties face a wider hearing later this month on a potential injunction on the iPhone 4S in Australia.

Other matters, including a more revealing version of the license agreement between Samsung and chipmaker Qualcomm appeared to be resolved.

The parties still tussled on remaining evidence, including the firmware for the iPhone 4S' baseband chip, supplied by Qualcomm. Samsung hoped to use the evidence to ascertain whether the smartphone had specific functionality, such as a VoIP capability, that infringed Samsung's patents.

Though Apple contended the documents were highly sensitive and a matter of "urgent negotiations" between itself and Qualcomm, Samsung claimed on Wednesday that the steps taken so far by the US manufacturer had likely been "inadequate".

Samsung had also delayed in putting forward evidence relating to its obligations around fair, reasonable and non-discriminatory (FRAND) licensing of the patents it has asserted against Apple's iPhone 4S.

Cochrane told the court Wednesday that it had approached a French law professor to consult on the matter, which is potentially the subject of French legislation due to Samsung's agreements with European telecommunications standards body ETSI.

However, Samsung counsel had issues resolving evidence from the professor who does not speak English and had been on holidays.

"Is there only one law professor in France?" Justice Bennett asked.

"Only one who's good, and he's ours," Cochrane said.

Apple has largely hoped to pin its defence on the applicability of FRAND obligations and the international agreements in Australia to contest the iPhone 4S' injunction.

The matter is likely to be investigated by the European Commission which, according to legal experts, had initiated preliminary anti-trust investigations into both parties.

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