Motorola seeking 2.25% of Apple's sales for standard-essential patent license - Page 3

Apple can just use its cash hoard and buy Germany.

Then the judges would be working for them.

1. They can't. This is an essential patent, which is why FRAND aplplies

2. It is Moto that apparently wants one set of rules for Apple and another for everyone else. And that violates FRAND.

Apple didn't pay because, according to them, it was covered by the Moto/QC agreement. If that is true then no Moto doesn't have a case.

There is no way that Apple would announce either of the two most rumored protects in current tech in a 30 second ad.

Very nice observations.

What will be ironic is - and we will see this a couple of years from now, since it will take at least that long to play out - while Google is wasting its cash, time, and attention chasing Android and its possibilities (essentially a zero-profit opportunity at best), it is going to get its buttoxes kicked in its core search and advertising revenue business by a $100B gorilla that is coming into existence.

I hope someone in that company is paying attention.

imo they are still going to have keynotes afterward even if there is an ad at the super bowl. And it could be a 60 secs ad, its not like they can't afford it.

OK, so I guess I touched a nerve by suggesting you were indulging in baseless speculation, since you're hitting the "I know you are but what am I" button pretty hard. Kinda tiresome.

I freely admit that I, too, am speculating, but at least I'm not pulling nonsense out of my ass. You really don't seem to be getting the whole FRAND deal. "Essential technology" isn't worth more when it's subject to FRAND terms, that's the whole point. Jesus.

Anywho, bored now. This kind of bullshit never goes anywhere, and the ignore list is handy.

If these patents really are so vital that you can't do anything without them, they should license to everyone for the same rate.

Well, Google may get its own retributions in near future... Samsung and probably a few others will just use the same tactics against Google.

When that day comes, I am sure I will pop a champagne and celebrate...

And apparently that's Motorola's argument. Seven years ago when Apple tried to license them, they (Apple) tried to add an extra clause or something in the agreement and Motorola turned them down because of it.

The only information I have about that is what the anti-Apple brigade tells me, though. However, they're probably not entirely wrong about it.

Only rabbid apple fans who had a shrine of Steve Jobs before 2007 (the ones built after belong to posers lol) will weep.

What the heck are you smoking?

Phone was "car based and now person based"? LOL

Mobile phones WAS from the get go a "person" focused device. Hence, the words MOBILE phones.

Dont try to diverge your story and avoid talking about the foundational patents of 3G in general. Without the basic technology of 3G, none of the smartphones will ever befeasible. It's like having multiple super computers on each nodes all connected to a 56k dial up connection. You think people will be streaming videos on those types of lines?

The faster wireless data networks is what impacted people the most. Before, you couldnt stream videos, do online businesses, send heavy files, video conference, telecommute, read streaming stock quotes and many others on a slow 2G or even 1G networks. You can have the fastest mobile phones but without the bandwidth the phone is nothing. Without the network, the mobile phone is just a fancy brick.

You like to claim that the iPhone was the "break through" in mobile phones but your are wrong about that. All it did was change the PRIMARY user interface of interacting with the device from hard buttons to soft buttons. It was the first device to utilize a majority of its interface using soft "buttons". There were already ecosystems of applications running on proven OS's. That isnt such a "breakthrough" in my opinion. Stop drinking the kool aid. LG and many others was already headed in that direction before Apple did. A not-so-well-known company called Neonode even beat LG to that punch.

One thing is clear however: Apple needs the patents from Motorola and others who have invested in the basic technologies of telecommunication tech called 3G. I'm sure they are paying royalties to the inventors of 4G technologies as well, namely LG, owning 25% of the patents related to 4G.

Whta? Now you HAVE to explain a bit further to state that WCDMA and it's HSPA extensions was a "minor" evolution in Wireless tech. I think many are going to love his one since it just increased data bandwidth by 300x and brought delays down to 1/40th of GPRS.

I'm not claiming iPhone wasn't a big innovation, but it's impact would be FAR FAR smaller hadn't WCDMA and HSPA been developed. Also there's a lot of EE that the other's have done to make things lik reception, battery life better, simultaneous voice and data and mobility that works (as compared to WLANs for example) etc. than it would be with just SW engineering.

I'd wager a bet that iPhone would not have taken off without 3G tech since so much of the iPhone's goodness comes from the internet access which is just way too slow on GPRS (2G).

Regs, Jarkko

Bravo, Moto! You've just gone to the top of the DOJ's Anti-Trust Task Force.

I expect NOKIA will be subpoened on this extortion attempt on Motorola's part and the Justice will come down hard on Moto.

More importantly, it will be likely that the Justice Department will put a freeze on the merger of Moto Mobile and Google.

Yeah, this seems like an insanely self-destructive act by MM/Google, especially with anti-trust investigators in the EU already looking into Samsung for the same thing.

No, your point seems to be that essential tech is worth LESS when it is subject to FRAND terms. That is not the case.

M$ sold non-essential stuff for ten or fifteen bucks. Apple wants to use essential stuff, and rejected a price that was smack inside that range.

ISTM that essential stuff is worth as much as non-essential stuff, and likely more. You think that because the patents are subject to FRAND, their worth plummets, but you have no basis for that assertion.

What do you posit is a "reasonable" price for a patent that is essential? Less than a non-essential patent? Why?

You seem to imply that FRAND patents must be licensed at unreasonably low fees. I'm not sure why. And seemingly, neither are you.

Actually, it often is.

FRAND requires you to license a technology at reasonable rates - and essentially everyone gets the lowest rate. When you offer your technology to a standards body as FRAND, you generally offer a lower license rate in the expectation that you will make it up on volume. So FRAND license rates tend to be quite small.

Non-FRAND stuff, OTOH, is, by definition, something that the licensee can choose to use or not to use. You can charge whatever you want for it - and you need to remember the the volume will be much smaller, so per unit fees tend to be higher.


I don't believe much of anything without evidence. If Motorola had tried to license to Apple at FRAND rates, you don't think they would have submitted that evidence to the judge?

Instead, we have a document from Motorola which specifically states that they want 2.25% (and it's not clear, but that might even be just for a single patent), which is clearly an absurd rate for FRAND stuff. So, the only available evidence says that moto is in the wrong here, not Apple.

Of course, the anti-Apple crowd is free to provide evidence to back their assertions.

Got any evidence for these assertions?



Got any evidence that 2.25% is an absurd rate for these patents? You seem to back up a statement of fact with a guess about the rate being too high. Got any evidence?

Not evidence or there wouldn't be the issue of a case, but speculatively speaking FRAND tends to be lower and 2.25% of the revenue being cut off the top is high. Remember that net profit is considerably lower than the gross profits for HW sales.

Good to hear that you consider the proposition that 2.25 is to high to be based upon nothing but speculation.


My speculation is that if non-essential stuff is worth 10 or 15 bucks, essential stuff is worth far more. I've heard nothing but bald assertions otherwise (based seemingly, on the proposition that if a manufacturer does NOT need a patent, it is worth more).

You're upset that I speculated about something that clearly stated as speculative? I speculate that this isn't your first AI username.

I've never bought an iPhone (mainly because I didn't need one), but I had all the major smart phones up to around 2005-2006, and the iPhone was a break through.

It may not have had the spec, but it had the UI. And that's what made it the break through phone that it was. Smart phones had gone stale in a bad way, no one was really investing in the proper UI and Symbian S60 was dreadful as a smart phone OS.

So whether you like it or not iPhone was a break through, and considering it has totally changed the market, destroyed the market leaders, etc, I'd say that you are a minority thinking it wasn't.

Gotta give the point to Solip here Zather. He's speculating. From bias sure but that's his prerogative.

Can't you ever make a decent argument? If you don't acknowledge how and why the iPhone changed everything then you either don't have the mental capacity or you're lying so there is no need for me to detail the various reasons. Instead I'll point out Exhibit A:

It's a bias, sure, but probably not the one you assume. If Apple was asking for 2.25% off the top for a FRAND license I would call that extreme, too.

That's actually what's so unfair about the current laws. You developed something important, you've to charge very little and you're not allowed to use it as something to differential your product from others. But if you developed something not important, you can essentially use it to differentiate your product from others or use it to stop other products from selling unless they pay an extremely high rate, or, in Apple's case, they won't even license those tech out at all and just want to block your sale.

Not upset. Indeed, I congratulated you on admitting that it is a speculation.

I prefer that speculations be honestly admitted. I congratulate him for doing so.

More posters in this thread should just admit that they have no facts, and are relying on guesses.

You seem to say that companies MUST submit certain patents to standards bodies, and that by doing so, they MUST charge very low fees.

Got any evidence for either point?


Everything I've seen indicates that submission is voluntary, and that upon submission, the company retains the right to charge reasonable fees.

That's not really the case. FRAND designation is optional - it only arises if you want to have your technology included as part of an industry standard. If you want to keep it to yourself, or simply license it as you see fit, then there is nothing to prevent that and FRAND will not apply.

Part of the problem, at least as I understand it, is that there are no universally accepted rules for determining FRAND rates. However, there are a number of precedents, opinions and published guidelines, many of which do take into account the aggregate rate for FRAND income, and lead to the conclusion that FRAND does lead to lower rates for high-volume essential technology licensing. Of course in the absence of hard data on actual rates prevalent in the industry, it's hard to know if those guidelines are being followed.

Apple has already requested agreements from Nokia, HTC and Ericsson with regards to Motorola. These were all filed within the last two weeks. Obviously, Apple wants to see Motorola's agreements with these companies to see what they're paying and if it's in line with what they want Apple to pay.

It is, however, a two edged sword. If you do NOT license your technology as FRAND, it will probably not be accepted by the standards body which will find some other way of accomplishing the objective - thus possibly making your patent worthless.


Absolutely wrong. If you invent something, you CAN use it to differentiate your product without licensing. Look at Apple. You can not, however, have your cake and eat it to. If you want it to be widely accepted as a standard, then you have to license it as FRAND - which means less money per handset, but possibly more money in the end because of volume. Either way, it's your choice.


No, it's based on experience and Florian Mueller's statements. Since has is involved with this type of licensing, he's in a far better position to know than you are. Can you prove him wrong?


No one really cares about your speculation. As an example, Mueller says that 2.25% is far too high for FRAND stuff. OTOH, we know that Microsoft is getting $10-15 for Android licensees for non-FRAND stuff. For a $500 handset, that's 2-3%.

Case closed.

Courts can force the patent holder's hand by declaring the patent essential to a market, and refusal to license creating an anti-trust issue, keeping competitors from entering that market. Might be tough to prove of course.

In Europe particularly, the ETSI (European Telecommunications Standards Institute) policies state that if a standard cannot be established without violating someone's intellectual property, perhaps an Apple patent for instance, then those patents are automatically declared essential and must be licensed.

It's not always the free choice of the patent holder whether FRAND (in the US they drop the "Fair" part, thus RAND) licensing applies to their patent(s).

BTW, there's some good background articles for any really interested in what (F)RAND is, and some of the larger issues it addresses or causes.
http://www.iam-magazine.com/issues/A...a-122caa87da21

http://www.etsi.org/WebSite/AboutETS...olicy_FAQ.aspx

EDIT: This link has a PDF where IP value and licensing costs, including (F)RAND, are discussed in depth.
http://ipfinance.blogspot.com/2011/1...s-and-lte.html

It is absurd. How can Motorola expect Apple to pay 2.25% of the full retail price of an iPhone (which would be close to $15) when the baseband chip inside that phone costs less than $15 in the first place? How many dollars per chip are companies like Qualcomm paying for a license (and then selling to a phone manufacturer who gets to use the license as well)?

Should it be 2.25% of the price of the chip or the price of the device it goes in? What about phones that sell for $300? Should they get away with paying half the price for the license simply because they are cheaper, even though they use the same baseband chip inside?

If LG makes a limited edition Prada phone that's diamond encrusted, then Motorola should get $100 per phone simply because it costs more?

IIRC, that's the settlement Apple made with Nokia, agreeing to give a percentage of iPhone sales revenue to them in exchange for use of Nokia's IP.

Appeals to authority are not a good way to prove a point. They are based, in essence, on faith, rather than on fact.

I might believe Muller if he cites facts for his opinion. But unless he does, you trust that he is correct.

Maybe he is. But I have less than full faith.

I think it would actually be less than full retail price because, as I recall, Apple has a system where Foxconn sells them the final product so Foxconn will pay the licensers thus making the license fee much lower. That could be part of the problem between Moto and Apple, too. Moto might be trying to get a higher percentage to account for this tricky accounting.

Agreed - but my point was that you do get to choose which you think will benefit you more. Subject to...


I was not aware of this. Are there any good examples of a company being forced to license under FRAND?

I didn't research that far. I only know that, at least in Europe, IP can be deemed essential and thus subject to licensing whether the holder agrees or not. I don't know if they've had to do so.