Microsoft joins Apple in pledging support for injunction free, FRAND patent licensing

Posted:
in iPhone edited January 2014


Microsoft has issued a public statement outlining its position regarding standards essential patents, committing itself "to always adhere to the promises it has made to standards organizations to make its standard essential patents available on fair, reasonable and nondiscriminatory terms." The move joins an effort initiated by Apple last fall, and begs for comment from Google to do the same.



Microsofts' "Support for Industry Standards" page published earlier today also outlines how the company participates in patent pools that it views to be "vitally important to the development of the Internet and to interoperability among mobile devices and other computers."



It further notes, "The international standards system works well because firms that contribute to standards promise to make their essential patents available to others on fair, reasonable and nondiscriminatory terms. Consumers and the entire industry will suffer if, in disregard of this promise, firms seek to block others from shipping products on the basis of such standard essential patents ."



Microsoft subsequently states that in addition to honoring its commitments to FRAND licensing terms for such standards-essential patents, the company "will not seek an injunction or exclusion order against any firm on the basis of those essential patents."



The company also says it "will make those essential patents available for license to other firms without requiring that those firms license their patents back to Microsoft, except for any patents they have that are essential to the same industry standard," and that "Microsoft will not transfer those standard essential patents to any other firm unless that firm agrees to adhere to the points outlined above."



Microsoft's February 2012 = Apple's August 2011



Microsofts view of standards essential patents and how they should be licensed is nearly identical in the views and recommendations Apple outlined in a letter last August addressed to the European Telecommunications Standards Institute.



Apple similarly noted that it "owns a portfolio of cellular standards essential patents relevant to certain cellular standards of ETSI and other standards setting organizations," adding that since 2007, Apple has committed to license these patents to other companies under FRAND terms



"It is apparent that our industry suffers from a lack of consistent adherence to FRAND principles in the cellular standards arena," Apple's intellectual property head Bruce Watrous wrote in the letter (embedded below).



11-11-11 Apple Letter to ETSI on FRAND



Apple similarly outlined the need for owners of patents that are "standards essential" and "made a FRAND commitment to license its cellular standards essential patents […] must license those patents at an appropriate rate," that is, "one that is reflective of the party's portfolio of cellular standards essential patents and patent applications as compared to the total industry-wide pool of such patents and applications."



"This commitment should guide each party's initial offer, as well as the final terms of any license."



Apple also stated "a party who made a FRAND commitment to license its cellular standards essential patents […] must not seek injunctive relief on such patents. Seeking an injunction would be a violation of the party's commitment to FRAND licensing."



Apple also noted that since first disclosing a series of FRAND committed telephony patents to open mobile standards in 2007, it would be disclosing a supplemental listing of 140 Apple patents and patent applications expected to be considered essential to LTE, MTS, EDGE, GPRS and GSM. Apple notes that the patents it is contributing "include newly issued Apple patents and published applications, as well as assets acquired from third parties."



Google promises not to shake things up



Yesterday, Google issued a letter to standards organizations in what is reported to be an assurance to EU regulators and standards bodies that it will continue to license Motorola's patents under the same fair reasonable and non discriminatory or "FRAND" terms Motorola has.



The problem is that Motorola is currently waging patent wars that make a mockery of FRAND licensing, recently demanding from both Apple and Microsoft a 2.25 percent royalty on their sales related to a single patent involved with 3G/UMTS wireless standards in the case of Apple, and a single H.264 video standard patent in the case of Microsoft.



Motorola's legal strategy appears to be reflected the words of one of its legal experts, who claims that a single patent is worth at lest as much as the entire patent pool collectively, because, in his words forwarded by Motorola, "it only takes one bullet to kill."



Given the 250,000 potential patents that could be claimed against any given smartphone design, were each patent holder to make demands like Motorola already has, manufacturers would owe absurd royalties amounting to hundreds of times the cost of the device. Motorola appeared to be gunning for $1billion of Apple's revenues just for its participation in crafting one element of the design of the 3G data network the iPhone needs to connect to in order to function as a smartphone.



Google will need to clarify what it means by its promise to continue Motorola's actions, because so far, if taken literally, this would make Google into the very "hostile, organized campaign" "waged through bogus patents" weaponized to stop innovation rather than promote it, the very concerns Google made public in its "When patents attack" blog last August.



However, if Google joins Apple and Microsoft in actually honoring FRAND licensing commitments, it will have to scuttle Motorola's claims now in progress and accept that it has very little bargaining power to refuse to pay Microsoft royalties for its legacy mobile technologies, and will have to accept restrictions from Apple that limit which of the company's unique features Motorola could appropriate in its own devices.



Such a move would also further devalue Motorola as a patent trove capable of "defending Android" from its own infringement cases and winning concessions from other smartphone makers (including other Android licensees), causing Google's already incredibly large acquisition valuation for Motorola to look even more irrational.









[ View article on AppleInsider ]

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Comments

  • mikeb85mikeb85 Posts: 506member
    It comes down to the fact that Apple has sought injunctions against other manufacturers, in many courts. The other OEMs are simply looking to force Apple into cross licencing deals, since up until now Apple had refused to license many patents, instead looking to block their competitors sales.
  • gatorguygatorguy Posts: 15,070member
    Quote:
    Originally Posted by AppleInsider View Post


    Google promises not to shake things up



    Yesterday, Google issued a letter to standards organizations in what is reported to be an assurance to EU regulators and standards bodies that it will continue to license Motorola's patents under the same fair reasonable and non discriminatory or "FRAND" terms Motorola has.



    The problem is that Motorola is currently waging patent wars that make a mockery of FRAND licensing, recently demanding from both Apple and Microsoft a 2.25 percent royalty on their sales related to a single patent involved with 3G/UMTS wireless standards in the case of Apple, and a single H.264 video standard patent in the case of Microsoft.



    Google will need to clarify what it means by its promise to continue Motorola's actions, because so far, if taken literally, this would make Google into the very "hostile, organized campaign" "waged through bogus patents" weaponized to stop innovation rather than promote it, the very concerns Google made public in its "When patents attack" blog last August.



    However, if Google joins Apple and Microsoft in actually honoring FRAND licensing commitments, it will have to scuttle Motorola's claims now in progress and accept that it has very little bargaining power to refuse to pay Microsoft royalties for its legacy mobile technologies, and will have to accept restrictions from Apple that limit which of the company's unique features Motorola could appropriate in its own devices.



    I'm certain you realize that Google probably has no control over lawsuits that began prior to their purchase offer and acceptance by Moto. While Google is reported to require advisement of any new legal filings, that wouldn't include a suit such as this that was initiated well-prior to Google's purchase offer, assuming what FOSSPatents reported was accurate.



    Of course if the eventual Moto purchase is approved (for which there's no assurance) I would certainly expect Google to approach their FRAND obligations in a more friendly manner than Motorola, and would be disappointed and critical if they didn't. As for this particular case, it's all on Moto in my opinion and shouldn't reflect on Google yet. Of course that wouldn't make the story as titillating.



    FWIW, some others reporting on Google's response anticipate the same commitment that Microsoft ( and apparently Apple?) has made.
  • hill60hill60 Posts: 6,965member
    Quote:
    Originally Posted by Mikeb85 View Post


    It comes down to the fact that Apple has sought injunctions against other manufacturers, in many courts. The other OEMs are simply looking to force Apple into cross licencing deals, since up until now Apple had refused to license many patents, instead looking to block their competitors sales.



    Motorola first moved to revoke the license on Infineon chips made by Chi Mei Corporation specifically when sold to Apple in August 2007.



    The brainwash inspired propaganda of Google overlords doesn't wash.
  • gatorguygatorguy Posts: 15,070member
    Quote:
    Originally Posted by hill60 View Post


    Motorola first moved to revoke the license on Infineon chips made by Chi Mei Corporation specifically when sold to Apple in August 2007.



    The brainwash inspired propaganda of Google overlords doesn't wash.



    That's another claim that would benefit from a reliable reference. I agree that at some point in 2007 Moto licensing terms changed with some Infineon chips (they also contracted with Infineon on a new chip design based on Moto IP at around the same time). Is there some evidence that the licensing changed only where Apple was involved?
  • addaboxaddabox Posts: 12,667member
    Quote:
    Originally Posted by Mikeb85 View Post


    It comes down to the fact that Apple has sought injunctions against other manufacturers, in many courts. The other OEMs are simply looking to force Apple into cross licencing deals, since up until now Apple had refused to license many patents, instead looking to block their competitors sales.



    Abusing FRAND agreements has nothing to do with Apple's litigation. There aren't special provisions in FRAND terms to the effect that you must make your licenses "fair and reasonable unless the other guy sues you for patent infringement, in which case feel free to use your FRAND technology as a weapon."



    I wish people would stop lumping FRAND stuff into the general give and take of patent litigation. FRAND agreements put your technology on a different footing, that's the whole point.
  • powermachpowermach Posts: 90member
    Quote:
    Originally Posted by Gatorguy View Post


    That's another claim that would benefit from a reliable reference. I agree that at some point in 2007 Moto licensing terms changed with some Infineon chips (they also contracted with Infineon on a new chip design based on Moto IP at around the same time). Is there some evidence that the licensing changed only where Apple was involved?



    Here's a link to court documents: http://articles.law360.s3.amazonaws....doc_num-93.pdf



    Apple?s original iPhone went on sale in June 2007. Apple?s original iPhone contained

    an Infineon baseband chipset, which incorporated technology covered by patents that

    Motorola has declared as essential. Apple purchased the Infineon baseband chipset through

    a manufacturing agreement with Chi Mei Corporation, which manufactured the Infineon

    baseband chipset under a licensing agreement with Motorola. On August 4, 2007, Motorola gave Chi Mei a 60-day suspension notice on its licensing agreement.



    On December 16, 2009, Apple and Qualcomm entered into a contract whereby Apple

    would purchase chipsets from Qualcomm that were compliant with the CDMA2000

    standard. The chipsets incorporated technology that Qualcomm licensed from Motorola.

    On January 11, 2011, on the day Apple announced the Verizon iPhone 4, Motorola notified

    Qualcomm of its intent to terminate any and all license covenant rights with respect to

    Qualcomm?s business with Apple, effective February 10, 2011.
  • gatorguygatorguy Posts: 15,070member
    Quote:
    Originally Posted by PowerMach View Post


    Here's a link to court documents: http://articles.law360.s3.amazonaws....doc_num-93.pdf



    Apple?s original iPhone went on sale in June 2007. Apple?s original iPhone contained

    an Infineon baseband chipset, which incorporated technology covered by patents that

    Motorola has declared as essential. Apple purchased the Infineon baseband chipset through

    a manufacturing agreement with Chi Mei Corporation, which manufactured the Infineon

    baseband chipset under a licensing agreement with Motorola. On August 4, 2007, Motorola gave Chi Mei a 60-day suspension notice on its licensing agreement.



    On December 16, 2009, Apple and Qualcomm entered into a contract whereby Apple

    would purchase chipsets from Qualcomm that were compliant with the CDMA2000

    standard. The chipsets incorporated technology that Qualcomm licensed from Motorola.

    On January 11, 2011, on the day Apple announced the Verizon iPhone 4, Motorola notified

    Qualcomm of its intent to terminate any and all license covenant rights with respect to

    Qualcomm?s business with Apple, effective February 10, 2011.



    I've seen that. It doesn't answer the question whether Apple was the only customer affected by the Chi Mei suspension, or whether it had anything at all to do with Apple. The timing by itself isn't evidence that Apple was singled out.



    As for the second point it's currently moot as the 4S using the Qualcomm chipset isn't part of the suit. In any case, I don't think Apple should ever be singled out and if it's happened it's not fair.
  • shadashshadash Posts: 470member
    [QUOTE=Gatorguy;2040574]...Of course if the eventual Moto purchase is approved (for which there's no assurance) I would certainly expect Google to approach their FRAND obligations in a more friendly manner than Motorola, and would be disappointed and critical if they didn't...[QUOTE]



    I've got some ocean front property in Yuma if you're interested.
  • hezetationhezetation Posts: 674member
    Quote:
    Originally Posted by Mikeb85 View Post


    It comes down to the fact that Apple has sought injunctions against other manufacturers, in many courts. The other OEMs are simply looking to force Apple into cross licencing deals, since up until now Apple had refused to license many patents, instead looking to block their competitors sales.



    What are you talking about? People throw that term "fact" around so loosely, what a joke.
  • gatorguygatorguy Posts: 15,070member
    I've spent the past 45 minutes or so reading various legal pleadings and docs filed by both Apple and Motorola. Here's what I personally come away with for now: It looks like a cat-n-mouse game between the two.



    Apple and Moto began negotiating a license for the subject patents back in Sept/07. Motorola from the beginning, according to Apple, wanted to tie the royalties to the cost of the device. Apple objected, as I would expect any business to, so no surprise there. All normal I would think. FWIW Apple's recent letter to the the EU's telecommunications standards group advocated just that, tying royalties to the total device cost rather than a single component. Perhaps due to Apple's comment in that letter that they expect to contribute some patents to new standards, thus wishing to get some significant royalties themselves?Hard to say.



    In any case, Apple and Moto could never agree, so now Moto wants an injunction because Apple has no license.



    Here's the really confusing part. It seems at least some of the patents that Moto is attempting to license to Apple, if not all of them, aren't technically part of the current standards. Moto claims they're essential and thus can't be avoided. If true than Apple couldn't claim not to use them and would be required to obtain a license. But that's part of Apple's counterclaims. They say they don't use the tech that Moto's patents apply to, basically saying that the Moto patents aren't essential and subject to FRAND.



    Now things get weirder. Apple claims that if Moto said the patents were essential then they must license them under FRAND terms in accordance with whatever regulatory or advisory group holds sway in that area, even tho Apple claims not to use them in the first place. On the flip-side Moto says that altho they consider the patents essential, no regulatory body has yet adopted them as part of any industry standard and thus they shouldn't be required to adhere firmly to FRAND terms..



    Somewhere in there are several nuggets of conflicting truth. Both are making competing claims on both sides of their arguments and appear to want their cake and eat it too as your mom might say. The whole suit is seriously confused with claims in direct opposition to other claims made by the same parties. It's less than clear whether the asserted patents are actually essential or not. Both Apple and Motorola have reasons to say they are in certain respects but not in others. Personally I don't understand how they can be both.



    In the end the court seems to be saying that if Apple wants to argue that Moto isn't negotiating in good faith under FRAND terms then they have to take a license to the patents first, something Apple is trying hard to avoid. Perhaps that's tied to Apple's hopes that they can have at least some of the patents declared invalid, something they can't do if they acknowledge the patents under Moto's terms.



    I don't see a clear right or wrong party as things stand.



    If you want to dive in and read the issues involved for yourself, here's a good starting document.

    http://docs.justia.com/cases/federal...9768/190/5.pdf
  • greginpraguegreginprague Posts: 415member
    Quote:
    Originally Posted by Gatorguy View Post


    As for the second point it's currently moot as the 4S using the Qualcomm chipset isn't part of the suit. In any case, I don't think Apple should ever be singled out and if it's happened it's not fair.



    I do believe you misread his post. He specifically says iPhone 4 (not 4s and therefore not moot) that Verizon started selling early in 2011. Now that we've unmooted the point would you care to address the evidence that you requested and he provided? Thanks a bunch!
  • gatorguygatorguy Posts: 15,070member
    Quote:
    Originally Posted by GregInPrague View Post


    I do believe you misread his post. He specifically says iPhone 4 (not 4s and therefore not moot) that Verizon started selling early in 2011. Now that we've unmooted the point would you care to address the evidence that you requested and he provided? Thanks a bunch!



    AFAIK the Qualcomm license issue isn't part of the argument, with the court already agreeing with Apple that the patent claims as they pertain to the Qualcomm chipset have been exhausted. Do you have better info that the Qualcomm claims are still in play? I didn't see that right off and still believe it's a moot point now unless there's still some claim being made.
  • gatorguygatorguy Posts: 15,070member
    Google's letter to the IEEE regarding it's commitment to FRAND obligations has been published. Tho it pledges to not seek injunctive relief from parties negotiating in good faith on licensing terms, at this time it falls short in stating that injunctions are off the table altogether. In addition it shows Google's intention to continue general licensing terms of 2.25% of a devices net selling price, less the value of cross-licensed patents. While Apple suggested selling price at the basis of royalty rates in it's own letter to the IEEE, it certainly wasn't suggesting a base-rate specific to each individual device. Instead Apple suggested an average sale price of an entry-level model capable of using the patented technology.



    Personally I'm disappointed in Google's letter and had hoped they were above some of the shadier IP practices shown by their rivals. I only hope that this is simply an initial response to be used in negotiations with the EU, and leverage in arranging cross-licensing with Apple.



    A 2.25% royalty rate, if adopted industry-wide, would be completely unsustainable and cause severe issues for price-conscious consumers.



    IMHO, not good so far Google.



    http://www.scribd.com/doc/80976133/1...on-MMI-Patents
  • addaboxaddabox Posts: 12,667member
    The "cross licensing" thing seems to be a real sticking point (if I recall correctly that was the problem early on with Moto's demands from Apple).



    What I'm hearing is "you have arguably the most polished, sophisticated mobile platform out there, plus you have the advantage of being a first mover. We, on the other hand, have boilerplate tech fundamental to how cell phones work, which we agreed to FRAND terms when that tech was made part of the standard. Fair's fair, we'll let you make a functioning cell phone if you let us copy your platform with impunity."



    Of course, there's quite a bit of difference between being able to use a functioning baseband chip and something like inertial scrolling, data detectors and the like. Some people seem to feel that once Apple has demonstrated how to make a desirable product, such attributes become essential and are thus fair game for copying. It's very telling how quickly the basic template of the iPhone has become what many people consider to be simply what a smartphone has to be.
  • mechanicmechanic Posts: 803member
    Quote:

    It comes down to the fact that Apple has sought injunctions against other manufacturers, in many courts. The other OEMs are simply looking to force Apple into cross licencing deals, since up until now Apple had refused to license many patents, instead looking to block their competitors sales.



    Also I hope that you realize that none of the apple patents there suing motorola over are standards based patents that are under FRAND terms. All of apples patents there suing over are private IP patents and Design patents that are not FRAND based.
  • mechanicmechanic Posts: 803member
    Also like the article states apple has agreed to FRAND terms on all of its Standards essential patents and agreed not to see injunctions against licensee's of those patents unlike motorola and samsung who are completely stomping on FRAND agreements they have made
  • addaboxaddabox Posts: 12,667member
    If the EU goes after Moto for abusing FRAND patents, I wonder what that does to Google's acquisition plans? Doesn't a Google strapped to a Motorola that has been found to abuse patents become a GoogoMoto that is going to invite additional scrutiny? Is that the kind of scrutiny Google really wants?



    I guess it depends on timing, if in fact Moto is ever investigated. If the merger goes through before there's much to talk about, I imagine that Google would be willing to take their chances. But if federal regulators keep the process hung up for a while, and an investigation is launched and has a chance to generate some headlines, I think it becomes an issue.
  • gatorguygatorguy Posts: 15,070member
    Quote:
    Originally Posted by addabox View Post


    If the EU goes after Moto for abusing FRAND patents, I wonder what that does to Google's acquisition plans? Doesn't a Google strapped to a Motorola that has been found to abuse patents become a GoogoMoto that is going to invite additional scrutiny? Is that the kind of scrutiny Google really wants?



    I guess it depends on timing, if in fact Moto is ever investigated. If the merger goes through before there's much to talk about, I imagine that Google would be willing to take their chances. But if federal regulators keep the process hung up for a while, and an investigation is launched and has a chance to generate some headlines, I think it becomes an issue.



    I don't see this one getting scrutiny from the EU unlike the Samsung situation. This particular set of patents isn't technically FRAND-pledged as far as I can tell, even tho Moto is trying to assert they're essential. Confusing to say the least.
  • swissmac2swissmac2 Posts: 216member
    Interesting. Apple team up with Microsoft to take on Google and Samsung. The battleground is Motorola. Who's going to die?
  • iqatedoiqatedo Posts: 1,418member
    Quote:
    Originally Posted by PowerMach View Post


    Here's a link to court documents: http://articles.law360.s3.amazonaws....doc_num-93.pdf



    The court documents that you have cited are in regard to this case - 11-cv-178-bbc. Actually, the outcomes are quite damning toward Motorola. The court found in favour of Apple in all but one claim, the one being dismissed on technical grounds. Even in respect of antitrust behaviour below (taken verbatim from the court documents):



    b. Antitrust

    Apple contends that Motorola violated the antitrust laws by making false licensing commitments to standards setting organizations and by failing to disclose essential patents or applications to those organizations until after certain standards were adopted.




    The judge decided:



    Therefore I will deny Motorola?s motion to dismiss Apple?s counterclaims under § 2 of the Sherman Act and the California Business and Professional Code § 17200.



    Therefore, Apple was reasonable in claiming antitrust behaviour. Further (although of course, there is a lot more than just this), Apple claimed that Motorola was not a liberty to withdraw patents from FRAND conditions that it had previously claimed were essential and had committed to the standards bodies, resulting in this:



    d. Promissory estoppel

    To survive a motion to dismiss on a promissory estoppel claim, Apple must plead that Motorola made a promise that it should have reasonably expected to cause Apple to change its position, and that the promise caused Apple to change position in such a manner that injustice can be avoided only by enforcing the promise. Hoffman v. Red Owl Stores, Inc., 26 Wis. 2d 683, 693-94 133 N.W.2d 267, 273-74 (1965). Motorola contends that Apple?s promissory estoppel claim should be dismissed as inadequately pleaded because Apple has not alleged that Motorola made any promise to Apple. I disagree.
    (Judge's words.)



    So it seems that Motorola is attempting to use FRAND encumbered patents to prevent Apple using non-FRAND encumbered patents against Motorola and others. Apple is claiming essentially, that Motorola is committing fraud. The judge in this case it seems agrees.



    Senior executives at Google had better somehow start losing email records of dealings with Motorola because once a second party can be shown to be participating in the fraudulent behaviour, such behaviour is known as civil conspiracy.
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