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Apple pledges royalty-free licensing of "nano-SIM" technology geared towards future iOS devices

post #1 of 52
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Apple will reportedly offer to license a new, ultra-compact SIM card technology to rival mobile devices makers if they agree back the format as the new industry standard for subscriber identification modules (SIM), a move which could pave the way for more compact and efficiently-designed iOS devices.

The pledge, said to have been outlined earlier this month in a letter to the European Telecommunications Standards Institute (ETSI) penned by a senior member of Apple's legal council, comes just days before the iPhone maker is expected to square off against opponents of the design at the organization's Smart Card Platform Plenary in southern France.

Sized roughly a third smaller than existing MicroSIM cards found inside current iPads and iPhones, the proposed nano-SIM design -- which is also noticeably thinner than that of MicroSIM -- has already garnered the support of most European wireless carriers as part of their own proposals to the ETSI.

However, rival mobile device makers Nokia, RIM and Motorola have each voiced concerns in opposing standardization of nano-SIM -- mainly out of fears Apple could eventually claim ownership of the patents behind the format, placing the company in a position of powered where it could command royalties from the broader industry.

The March 19th letter to the ETSI stands to invalidate these concerns, according to independent intellectual property analyst Florian Mueller, through "an unequivocal commitment to grant royalty-free licenses to any Apple patents essential to nano-SIM, provided that Apple's proposal is adopted as a standard and that all other patent holders accept the same terms in accordance with the principle of reciprocity."

"This shows that Apple is serious about establishing the nano-SIM standard rather than seeking to cash in on it," he said. "Apple is a company that values its intellectual property and rarely gives it away for free. But as far as the evolution of SIM cards is concerned, Apple is clearly being generous and absolutely pro-competitive."


Apple's proposed nano-SIM would be even smaller than existing mini-SIM (top) and micro-SIM (bottom) designs.



In 2010, Apple was said to be working on an embedded SIM design that would allow users to select a carrier and service plan directly from their iPhone. But those plans allegedly upset the wireless operators, who felt they could be marginalized by such a move. As such, the Cupertino-based company compromised and began talking with carriers about designing a smaller SIM card that eventually emerged as the existing MicroSIM.

Apple's continued push towards further miniaturization of SIM cards aims to reduce the space required to house the identification cards inside its future mobile devices, paving the way for devices that are either more compact or free up additional space for other components, such as larger batteries.

[ View article on AppleInsider ]
post #2 of 52
Quote:
"an unequivocal commitment to grant royalty-free licenses to any Apple patents essential to nano-SIM, provided that Apple's proposal is adopted as a standard and that all other patent holders accept the same terms in accordance with the principle of reciprocity."


What does the bolded language mean? What will the "other patent holders" need to do?
post #3 of 52
Quote:
Originally Posted by AppleInsider View Post

In 2010, Apple was said to be working on an embedded SIM design that would allow users to select a carrier and service plan directly from their iPhone. But those plans allegedly upset the wireless operators, who felt they could be marginalized by such a move. As such, the Cupertino-based company compromised and began talking with carriers about designing a smaller SIM card that eventually emerged as the existing MicroSIM.

The embedded SIM design is the way the industry should be going. There's no reason for a SIM and eliminating it would make the device less expensive and more robust.

It would not be hard to set up a mechanism where users could manually enter the numbers.
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post #4 of 52
Quote:
"an unequivocal commitment to grant royalty-free licenses to any Apple patents essential to nano-SIM, provided that Apple's proposal is adopted as a standard and that all other patent holders accept the same terms in accordance with the principle of reciprocity."


What does the bolded language mean? What will the "other patent holders" need to do?
post #5 of 52
Quote:
Originally Posted by I am a Zither Zather Zuzz View Post

What does the bolded language mean? What will the "other patent holders" need to do?

Basically, it means that everyone is free to use their patents in the standard all they want so long as they contribute any required patents to the same licensing.

So, for example say the nano-SIM is ratified as a standard. Anyone using the standard must use 20 patents. 10 of those are belonging to Apple, 10 are belonging to Motorola. Anyone and everyone is allowed to use Apple's patents freely, except Motorola. Motorola can only use Apple's patents freely so long as everyone else is able to use Motorola's relevant patents freely as well.
post #6 of 52
Quote:
Originally Posted by I am a Zither Zather Zuzz View Post

What does the bolded language mean? What will the "other patent holders" need to do?

It means what it says it means.

Companies that try to withhold standards-essential FRAND patents (in violation of prior licensing agreements and EU anti-trust law) wouldn't be licensed to use this. Yes, that would include your buddies at Motorola and Samsung. Based on Motorola's recent legal shenanigans, I think all FRAND patent agreements in the future will have similar language.

What's good for the goose is good for the gander.

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post #7 of 52
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Originally Posted by John.B View Post

It means what it says it means.

Companies that try to withhold standards-essential FRAND patents (in violation of prior licensing agreements and EU anti-trust law) wouldn't be licensed to use this. Yes, that would include your buddies at Motorola and Samsung. Based on Motorola's recent legal shenanigans, I think all FRAND patent agreements in the future will have similar language.

What's good for the goose is good for the gander.

I wonder what FRAND encumbered SIM card patents currently exist? I wonder how much companies are currently asking and getting for royalties?

Is Apple offering something that nobody wants, in exchange for getting currently valuable patents for free?
post #8 of 52
Quote:
Originally Posted by I am a Zither Zather Zuzz View Post

I wonder what FRAND encumbered SIM card patents currently exist? I wonder how much companies are currently asking and getting for royalties?

Is Apple offering something that nobody wants, in exchange for getting currently valuable patents for free?

Your words are self-contradictory. The only patents they'd be getting for free are those involved with the SIM standard - ones you just questioned the existence of.
post #9 of 52
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Originally Posted by mbarriault View Post

Your words are self-contradictory. The only patents they'd be getting for free are those involved with the SIM standard - ones you just questioned the existence of.

I don't know what sort of patents are shared or under what sorts of royalty schemes. If any of them are currently valuable, would Apple get them for free?

That's what I'm wondering: What's in this for Apple? How big a burden is this proposal for the current patent holders?

My guess is that Apple will be getting more than it gives. Otherwise, I don't understand Apple's incentive. If Apple wanted to unilaterally start using a smaller SIM, it would just do so. Why do they want it to become a new standard, and what are they getting in return?
post #10 of 52
Quote:
Originally Posted by John.B View Post

...Based on Motorola's recent legal shenanigans, I think all FRAND patent agreements in the future will have similar language...

The FRAND patent policies of all the major standardization bodies already imposes such expectations on their signatories, and they have done so since long before this most recent spat of smartphone patent lawsuits.
post #11 of 52
Quote:
Originally Posted by lfmorrison View Post

The FRAND patent policies of all the major standardization bodies already imposes such expectations on their signatories, and they have done so since long before this most recent spat of smartphone patent lawsuits.

There is no current expectation that patent holders will contribute their work for free. FRAND encumbered patents are licensed to others for royalties. My guess is that some of the royalties are big profit centers for those who hold valuable patents.

In the SIM card standards, what are the relevant patents that other companies need to license for free if they accept Apple's deal?
post #12 of 52
I thought Nano-SIM already existed:

http://en.wikipedia.org/wiki/Subscriber_identity_module

Or is this an alternative nano-SIM (considering the claim that it's thinner)?

Anyway, the consensus from a previous discussion seemed to be that a smaller SIM is a nuisance, as it lacks severely in convenience of handling while providing negligible size advantages.

The problem I anticipate with a potential embedded SIM is something of the sort:

Message when you enter your soft-SIM number in your phone:

"Your device is not licensed to operate on our network. Please contact the nearest vendor for our selection of newest compatible models"...

Or, even worse:

"Another device has been registered to this Subscriber identity module. In order to activate a different phone to use with your subscription, please: a) come to our service center to register; b) pay a fee; or c) ugh, no, you can't do anything."

Knowing how American telcos operate, I'd expect some bullsh*t of the sort exemplified above...
post #13 of 52
Quote:
Originally Posted by I am a Zither Zather Zuzz View Post

There is no current expectation that patent holders will contribute their work for free. FRAND encumbered patents are licensed to others for royalties. My guess is that some of the royalties are big profit centers for those who hold valuable patents.

In the SIM card standards, what are the relevant patents that other companies need to license for free if they accept Apple's deal?

Granted, most bodies don't stick their oar into price specifically (except for the notion that the price must be fair)...

But the concept of reciprocity most definitely is central to the patent policies of all the major standards bodies. It is at the very core of FRAND licensing in general.
post #14 of 52
Quote:
Originally Posted by lfmorrison View Post

Granted, most bodies don't stick their oar into price specifically (except for the notion that the price must be fair)...

But the concept of reciprocity most definitely is central to the patent policies of all the major standards bodies. It is at the very core of FRAND licensing in general.

So that again brings up the question of the amount of royalties that others will need to give up in order to use the new size card that Apple is proposing.

Who holds the current patents? How valuable are they?
post #15 of 52
Quote:
Originally Posted by John.B View Post

It means what it says it means.

Companies that try to withhold standards-essential FRAND patents (in violation of prior licensing agreements and EU anti-trust law) wouldn't be licensed to use this. Yes, that would include your buddies at Motorola and Samsung. Based on Motorola's recent legal shenanigans, I think all FRAND patent agreements in the future will have similar language.

What's good for the goose is good for the gander.

It's been an understanding for years that if you license FRAND essential tech, your patents that build on it are cross-licensed back to the licensee(s). That's part of the "FAIR" in FRAND. Otherwise a competitor could license your essential patents that may have taken years of investment and inventiveness, improve on them to the point they become the new industry preference and lock you out of the market that you made possible to begin with by not giving you access to the improvements. That wouldn't be FAIR would it? That's something Florian Mueller knows but neglected to emphasize if he mentioned it at all.

In this particular case tho I believe the bold text that was questioned actually means that others contributing to the standard agree to make the IP royalty free too. If not then Apple reserves the right to ask for a royalty or not contribute to the standard.

FWIW it's appeared to me that Apple has been the one trying to change the accepted rules and not cross-license their own applicable patents when negotiating FRAND royalties. Good to see them take the initiative on this one.
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post #16 of 52
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Originally Posted by I am a Zither Zather Zuzz View Post

So that again brings up the question of the amount of royalties that others will need to give up in order to use the new size card that Apple is proposing.

Who holds the current patents? How valuable are they?

In practice, presumably this means that handset manufacturers who do not own any patents at all can license Apple's patents on Apple's terms -- for free -- and license all other patent holders' patents at the rate that the other patent holders see fit.

On the other hand, handset manufacturers who also happen to hold relevant patents would need to either also give them away for free, or else separately negotiate with Apple to find a mutually agreeable price to license Apple's technology, and vice-versa.

This outcome, if adopted, would constitute a perfect example of the principle of reciprocity at work.
post #17 of 52
Quote:
Originally Posted by I am a Zither Zather Zuzz View Post

There is no current expectation that patent holders will contribute their work for free.

Only partially true. Cross-licensing the patents that apply to the FRAND-encumbered licensed IP is expected within the industry. Apple has apparently tried to avoid that, which was part of the problem with Nokia last year. To settle the suit Apple did finally cave and agree to some IP cross-licensing with them. They'll likely agree to the same with Motorola at some point IMO. But the IP that Apple or anyone else agrees to share isn't free. The value of IP that a company licenses back is considered when royalties are negotiated on the standards package.
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post #18 of 52
There is a reasonable suspicion that one or more of the involved companies have ulterior motifs, since this technology seems to fix something that isn't broken.

Let's hope that it will be for the benefit of the end user. If not, we can always refuse to buy any devices using the new standard, right?
post #19 of 52
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Originally Posted by Gatorguy View Post

. But the IP that Apple or anyone else agrees to share isn't free. The value of IP that a company licenses back is considered when royalties are negotiated on the standards package.

Here, though, apple is proposing royalty-free licenses, in exchange for others to give away their licenses for free? Is that right?

So how valuable is Apple's size patent compared to the technical patents held by others?
post #20 of 52
Quote:
Originally Posted by I am a Zither Zather Zuzz View Post

I wonder what FRAND encumbered SIM card patents currently exist? I wonder how much companies are currently asking and getting for royalties?

Is Apple offering something that nobody wants, in exchange for getting currently valuable patents for free?

if I owned the FRAND patent on the blue thing, people pay me for using it... Apple's proposing a red thing. Who's going to pay me for the blue thing if everyone has switched to red and Apple licenses red for free.

and it's not like "nobody wants it" - "Apple has the support of "most of the European operators", according to the FT."
post #21 of 52
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Originally Posted by milkmage View Post

if I owned the FRAND patent on the blue thing, people pay me for using it... Apple's proposing a red thing. Who's going to pay me for the blue thing if everyone has switched to red and Apple licenses red for free.


Presumably, Apple would need lots of patents owned by others in order for anybody to use the red thing.

The question that keeps nagging me is how much the current royalties are, and whether they are more valuable than Apple's potential royalties on a new size?

ISTM that if Apple's patent were valuable, and the other patents were not so valuable, Apple would not offer their tech for free. If Apple's proposal makes sense for Apple, then they would be getting more than they give. How much more?

And which companies currently own the most valuable SIM patents? Nokia? Motorola?
post #22 of 52
Quote:
Originally Posted by I am a Zither Zather Zuzz View Post

So that again brings up the question of the amount of royalties that others will need to give up in order to use the new size card that Apple is proposing.

No, it doesn't. Apple is clear on the royalties for most situations.

If the licensee doesn't have any relevant patents, they can license the tech for free.

If the licensee has relevant patents and agrees to license them on the same terms as Apple, it's also free.

Only if the licensee has relevant patents and refuses to license them on the same terms as Apple would royalty rates come into the picture. And we can cross that bridge if we come to it.
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post #23 of 52
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Originally Posted by lfmorrison View Post

The FRAND patent policies of all the major standardization bodies already imposes such expectations on their signatories, and they have done so since long before this most recent spat of smartphone patent lawsuits.

And yet, Moto sued Apple over a FRAND patent...

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post #24 of 52
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Originally Posted by John.B View Post

And yet, Moto sued Apple over a FRAND patent...

...because they can't come to an agreement on royalty rates.\ It's something that's traditionally negotiated.

My guess is that Apple doesn't want to cross-license their own applicable IP made possible by the licensed-standards (cross-licensing would be the norm) nor wants to pay the stated rate if no IP is licensed back. There's also the issue of past infringement to be settled from what I've read at FOSSPatents.
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post #25 of 52
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Originally Posted by Gatorguy View Post

...because they can't come to an agreement on royalty rates.\ It's something that's traditionally negotiated.

My guess is that Apple doesn't want to cross-license their own applicable IP made possible by the licensed-standards (cross-licensing would be the norm) nor wants to pay the stated rate if no IP is licensed back. There's also the issue of past infringement to be settled from what I've read at FOSSPatents.

Perhaps I'm off in the weeds here, but my understanding is that Moto wants to license their FRAND patents against some of Apple's non-FRAND patents. Something that isn't traditionally negotiated.

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post #26 of 52
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Originally Posted by jragosta View Post


Only if the licensee has relevant patents and refuses to license them on the same terms as Apple would royalty rates come into the picture. And we can cross that bridge if we come to it.

Right. You are starting to catch on.

I presume that SIM cards have many patents attached to them, and I guess that at least some of them are valuable.

The "same terms as Apple" means that these currently valuable patents would have to be given away for free if Apple's size is adopted? Right?

so some companies who currently pay royalties start getting a windfall, while others who currently get royalties will lose that revenue? Right?

If I'm wrong in this reasoning, let me know.

If I'm right, who would get the windfall, and who would get screwed?
post #27 of 52
Quote:
Originally Posted by John.B View Post

Perhaps I'm off in the weeds here, but my understanding is that Moto wants to license their FRAND patents against some of Apple's non-FRAND patents. Something that isn't traditionally negotiated.

Yes it is, and at least partially for the reason I mentioned earlier. I'll restate it.

Assume you have a great idea that may change a market altogether, but to be a player at all you need IP that belongs to the industry pioneers. Without it you can't sell your product at all. Would it be FAIR for them to grant you a license without you reciprocating? If you deny them the improvements that wouldn't have been possible in the first place without their standards IP, you'd conceivably lock those companies who made your business possible out of their own market that they created in the first place. If you don't want them to have a chance to continue in their market, it's only FAIR they be compensated for their potential loss. Thus the FAIR in FRAND.
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post #28 of 52
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Originally Posted by Gatorguy View Post

...because they can't come to an agreement on royalty rates.\ It's something that's traditionally negotiated.

My guess is that Apple doesn't want to cross-license their own applicable IP made possible by the licensed-standards (cross-licensing would be the norm) nor wants to pay the stated rate if no IP is licensed back. There's also the issue of past infringement to be settled from what I've read at FOSSPatents.

Are you assuming that Apple has "applicable IP made possible by the licensed-standards" in addition to guessing that they are unwilling to use it in negotiations? Your guess seems to be based on another guess.
post #29 of 52
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Originally Posted by Gatorguy View Post

Yes it is, and at least partially for the reason I mentioned earlier. I'll restate it.

Assume you have a great idea that may change a market altogether, but to be a player at all you need IP that belongs to the industry pioneers. Without it you can't sell your product at all. Would it be FAIR for them to grant you a license without you reciprocating? If you deny them the improvements that wouldn't have been possible in the first place without their standards IP, you'd conceivably lock those companies who made your business possible out of their own market that they created in the first place. If you don't want them to have a chance to continue in their market, it's only FAIR they be compensated for their potential loss. Thus the FAIR in FRAND.

Why are you so eager to prove that you don't have any concept of what FRAND means?

If the patent is an essential patent which was submitted to the standards committee, it's FRAND. The 'industry pioneers' long ago agreed that they would license under FRAND terms to facilitate the market.

If your patent is essential, then it may be necessary to license it under FRAND terms. But if it's not essential (like the ones that Motorola tried to demand from Apple), there's no obligation to license under FRAND.

Quote:
Originally Posted by I am a Zither Zather Zuzz View Post

Right. You are starting to catch on.

I presume that SIM cards have many patents attached to them, and I guess that at least some of them are valuable.

The "same terms as Apple" means that these currently valuable patents would have to be given away for free if Apple's size is adopted? Right?

so some companies who currently pay royalties start getting a windfall, while others who currently get royalties will lose that revenue? Right?

If I'm wrong in this reasoning, let me know.

If I'm right, who would get the windfall, and who would get screwed?

Of course you're wrong in the reasoning. First, you don't know if there are any patents attached to Apple's micro-SIM card. Second, you don't know if anyone makes any money from them. Third, even if someone is making a trillion dollars from their micro-SIM patents, they simply don't have to agree to reciprocate with Apple's terms and would then have to negotiate a separate license.
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post #30 of 52
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Originally Posted by Doctor David View Post

Are you assuming that Apple has "applicable IP made possible by the licensed-standards" in addition to guessing that they are unwilling to use it in negotiations? Your guess seems to be based on another guess.

Other than Apple and Moto not agreeing on appropriate recompense, of course my opinions are guesses. With no mention of an offer to cross-license IP despite in-depth reporting of the case details at FOSSPatents, I'd go so far as to say it's an educated guess.
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post #31 of 52
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Originally Posted by Gatorguy View Post

Yes it is, and at least partially for the reason I mentioned earlier. I'll restate it.

Assume you have a great idea that may change a market altogether, but to be a player at all you need IP that belongs to the industry pioneers. Without it you can't sell your product at all. Would it be FAIR for them to grant you a license without you reciprocating? If you deny them the improvements that wouldn't have been possible in the first place without their standards IP, you'd conceivably lock those companies who made your business possible out of their own market that they created in the first place. Thus the FAIR in FRAND.

FRAND patents should have a reasonable price. Thus, the REASONABLE in FRAND.

No company should have to license their non-FRAND patents (i.e. non-standards essential patents) in order to acquire licenses for a FRAND patent. Thus, the NON-DISCRIMINATORY in FRAND.

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post #32 of 52
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Originally Posted by jragosta View Post

Why are you so eager to prove that you don't have any concept of what FRAND means?

If the patent is an essential patent which was submitted to the standards committee, it's FRAND. The 'industry pioneers' long ago agreed that they would license under FRAND terms to facilitate the market.

If your patent is essential, then it may be necessary to license it under FRAND terms. But if it's not essential (like the ones that Motorola tried to demand from Apple), there's no obligation to license under FRAND.

Where did I say it was an obligation to cross-license? One of your favorite tactics in use apparently. Create a misstatement if one doesn't exist.

Since you're serving as the forum's legal expert, just what does FRAND require? What royalty basis does it specify? What is the range of royalties that are acceptable? Is trading IP to reduce out-of-pocket expenses permissable? Is it expected? Does every licensee have to pay the exact same fee? Are FRAND licensing terms the same from standard to standard? Who has defined just what FRAND specifically requires? Does FAIR apply only to the licensee? Please educate me.
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post #33 of 52
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Originally Posted by John.B View Post

FRAND patents should have a reasonable price. Thus, the REASONABLE in FRAND.

No company should have to license their non-FRAND patents (i.e. non-standards essential patents) in order to acquire licenses for a FRAND patent. Thus, the NON-DISCRIMINATORY in FRAND.

When you find the definition of "reasonable" in any FRAND commitment, let us know.
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post #34 of 52
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Originally Posted by I am a Zither Zather Zuzz View Post


My guess is that Apple will be getting more than it gives.

Of course it is!
post #35 of 52
Quote:
Originally Posted by Gatorguy View Post

When you find the definition of "reasonable" in any FRAND commitment, let us know.

Ditto for the definition of "fair". Which is why I said that I expect this type of language:

Quote:
"an unequivocal commitment to grant royalty-free licenses to any Apple patents essential to nano-SIM, provided that Apple's proposal is adopted as a standard and that all other patent holders accept the same terms in accordance with the principle of reciprocity."

... will become de rigueur in all future FRAND licensing agreements.

Remember, nobody has to submit their patents to FRAND licensing terms, but the standards bodies will probably not include that technology if you don't.

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post #36 of 52
Quote:
Originally Posted by John.B View Post

Ditto for the definition of "fair". Which is why I said that I expect this type of language:



... will become de rigueur in all future FRAND licensing agreements.

Remember, nobody has to submit their patents to FRAND licensing ters, but the standards bodies will probably not include that technology if you don't.

I'll make the whole thing easy. . .

There is no definition of the standard terms for a FRAND commitment. Essentially the only thing that FRAND means is that the patents must be made available for licensing for all would-be licensees according to whatever agreement is made with specific licensing bodies. So what do the various words in FRAND mean?. They're not strictly defined by any all-encompassing authority and thus issues sometimes arise. There is no such thing as a standard FRAND agreement.
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post #37 of 52
Quote:
Originally Posted by Gatorguy View Post

Other than Apple and Moto not agreeing on appropriate recompense, of course my opinions are guesses. With no mention of an offer to cross-license IP despite in-depth reporting of the case details at FOSSPatents, I'd go so far as to say it's an educated guess.

Apple and Moto not agreeing on terms for frand licensing doesn't support your guess. Maybe you could explain that better.
Your guess is based on your assuming Apple has "applicable IP made possible by the licensed-standards" I see no reason to assume that.
Your making a guess based on another guess with no evidence to back it up.
post #38 of 52
Quote:
Originally Posted by Gatorguy View Post

Where did I say it was an obligation to cross-license?

Then what the heck are you complaining about?

Apple offers one set of terms that licensees can use. The licensees are free to reject those terms and negotiate a license if they wish. So what's the basis of your accusations that Apple is being unfair (other than your relentless need to attack anything Apple does, of course).
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post #39 of 52
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Originally Posted by jragosta View Post

Then what the heck are you complaining about?

Apple offers one set of terms that licensees can use. The licensees are free to reject those terms and negotiate a license if they wish. So what's the basis of your accusations that Apple is being unfair (other than your relentless need to attack anything Apple does, of course).

Again with the imagined arguments. Where did I say Apple was being unfair? Where did I say anyone was being unfair? Where was I even complaining? You were the one that said I didn't understand FRAND at all and implying you did. So enlighten me.
melior diabolus quem scies
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melior diabolus quem scies
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post #40 of 52
I recall an episode of the British TOP GEAR automobile show where Jeremy Clarkson equated a SIM tray in the dash of one of the latest super cars as turning it into the world's most expensive cell phone. People are thinking the wrong way with SIMs. Not only can you transfer your phone to another network, you can pull the SIM from one device (your phone0 and put it into another (your car, for true hands-free calling while driving and keeping your cell number). Bluetooth schmootooth. The only catch is remembering to take it with you.
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  • Apple pledges royalty-free licensing of "nano-SIM" technology geared towards future iOS devices
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