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Apple claims Motorola discriminated on tech licensing, charged 12 times going rate

post #1 of 51
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In a new filing lodged with the U.S. Court of Appeals for the Federal Circuit this week, Apple claims Google's Motorola demanded unreasonable rates for tech based on deemed standard essential patents, with fees 12 times higher than what Motorola charged other companies.

US Appeals Court
U.S. Court of Appeals for the Federal Circuit. | Source: U.S. Courts


The CAFC filing, an opening brief from Apple regarding the dismissal of a FRAND-related action from Wisconsin, is one of the first developments in the case likely to be heard by the court in early 2014, reports FOSS Patents' Florian Mueller.

Motorola is appealing the partial summary judgment win for Apple over a FRAND contract and antitrust case leveled in Wisconsin, which was ultimately dismissed without prejudice in 2012 by Judge Barbara Crabb.

A portion of Apple's brief states Motorola "demand[ed] that Apple take a license at a rate that was more than 12 times what Motorola was charging other licensees for the same technology--a rate that was unfair, unreasonable, and decidedly discriminatory." At the time, Motorola was asking Apple for 2.25 percent, a rate unsupported by previous deals. Apple says the demand would represent approximately $12 per iPhone, or "12 times what Apple was already paying to license Motorola's SEPs," possibly referencing the indirect licensing of technology used in baseband chips and other components.

On that point, Apple notes that a previous proposal to pay Motorola $1 per iPhone was meant to "buy litigation peace and move on." The company says Google's leveraging of Motorola patents has been wholly unsuccessful.

From Apple's opening brief:

Motorola has sued Apple in various forums for infringement of eight SEPs (presumably, its eight strongest SEPs) and is batting 0-for-8 in establishing liability in U.S. actions.


In light of this information, Mueller points out that Apple's proposal was perhaps reasonable, especially considering Motorola's litigation track record. Barring that deal, Apple wants Motorola to actually offer a FRAND rate, a bone of contention that has so far been largely avoided due to the possible negative repercussions of a court rate-setting decision.

While a hearing date has yet to be set for the Wisconsin appeal, Apple is scheduled to begin another CAFC hearing as part of a cross-appeal with Motorola. That hearing, slated for Sept. 11, is in regard to Judge Richard Posner's dismissal of a patent infringement case in 2012.

post #2 of 51
Something is confusing or wrong with the logic in the article. It says Apple is claiming it was being asked to pay 12 times what *other* licensees were paying, then goes on to say that Apple was being asked to pay $12 per iPhone, which is 12 times what Apple was already paying for Motorola SEP's.

Hunh?
post #3 of 51
Quote:
Originally Posted by runbuh View Post

Something is confusing or wrong with the logic in the article. It says Apple is claiming it was being asked to pay 12 times what *other* licensees were paying, then goes on to say that Apple was being asked to pay $12 per iPhone, which is 12 times what Apple was already paying for Motorola SEP's.

Hunh?

After your post almost the entire text got a strike through.
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post #4 of 51
So why, again, did Google blow $12.5 billion on Motorola Mobility?
I can think of a few reasons:

1. Patent panic
2. Lack of vertical integration
3. Lack of due diligence
4. All of the above

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post #5 of 51
I think one of the things the US Congress needs to do is establish a nation-wide FRAND database that's open to everybody. That way, when Apple get offered a rate, they can tell the company that on the FRAND database, it is not the same rate as they're offering to Apple.

Any companies found to offering a rate that's higher than FRAND database should be fined. The fine should be high enough that it'd cost the company more to pay it than decreasing the FRAND rate to match the database price.
post #6 of 51
Apple is lying; Google can't possibly be doing what they are being accused of because their motto is "don't be evil".
post #7 of 51
Quote:
Originally Posted by runbuh View Post

Something is confusing or wrong with the logic in the article. It says Apple is claiming it was being asked to pay 12 times what *other* licensees were paying, then goes on to say that Apple was being asked to pay $12 per iPhone, which is 12 times what Apple was already paying for Motorola SEP's.

Hunh?

It explains that:
"possibly referencing the indirect licensing of technology used in baseband chips and other components."

So Apple was paying $1 when they were getting the license via the component manufacturers. However, Motorola stopped licensing the component manufacturers and wanted Apple to have its own license - and asked for an 1100% increase.
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post #8 of 51
Quote:
Originally Posted by SockRolid View Post

So why, again, did Google blow $12.5 billion on Motorola Mobility?
I can think of a few reasons:

1. Patent panic
2. Lack of vertical integration
3. Lack of due diligence
4. All of the above

Possibly. After all, many of us have done billion dollar acquisitions many more times than Google, and are well qualified to second guess.

post #9 of 51
Quote:
Originally Posted by jragosta View Post

It explains that:
"possibly referencing the indirect licensing of technology used in baseband chips and other components."

So Apple was paying $1 when they were getting the license via the component manufacturers. However, Motorola stopped licensing the component manufacturers and wanted Apple to have its own license - and asked for an 1100% increase.

Yeah, most likely the manufacturer was charging Apple $140 or some odd dollars for the iPhone, so Motorola was getting the 2.25 percent of that, while Apple was turning around and selling the device for $650 or what not. So Motorola was actually getting screwed, as Apple was making extra money/profit on Motorola IP.
post #10 of 51
I found an article from 2009 showing the component cost of an iPhone 3GS. The Infineon Technologies AG broadband chip only cost $13 (even if they used a Qualcomm it won't be that different) so Google/Motorola wants 1/13th the cost of the chip in licensing fees. That would be a little over $1/phone. From what I've read previously, Google wants 2.25% of the cost of the entire phone, which is insane. For Apple to play the mobile phone game, they had to use a 3G chip, otherwise it wouldn't work. Forcing someone to license a standards technology should be against the law.
post #11 of 51
Quote:
Originally Posted by SockRolid View Post

So why, again, did Google blow $12.5 billion on Motorola Mobility?
I can think of a few reasons:

1. Patent panic
2. Lack of vertical integration
3. Lack of due diligence
4. All of the above

I thought Motorola was threatening to file patent suits against other Android handset companies and Google wanted to prevent that.
post #12 of 51
Quote:
Originally Posted by SockRolid View Post

So why, again, did Google blow $12.5 billion on Motorola Mobility?
I can think of a few reasons:

1. Patent panic
2. Lack of vertical integration
3. Lack of due diligence
4. All of the above

Well, I think the newest line of Droid phone Motorola released a short while ago explain why.  If I was shopping for a phone the Droid Razr Maxx might tempt me, up to 48Hr battery life..... Even if that probably is inflated, I could count on at least 24Hr..... Amazing :)

At the same time, the 12.5 Billion was far to much to pay.  I would say half of that money was blown, probably more.

Quote:
Originally Posted by tundraboy View Post

Apple is lying; Google can't possibly be doing what they are being accused of because their motto is "don't be evil".

right... Totally....

Quote:
Originally Posted by mrrodriguez View Post


Yeah, most likely the manufacturer was charging Apple $140 or some odd dollars for the iPhone, so Motorola was getting the 2.25 percent of that, while Apple was turning around and selling the device for $650 or what not. So Motorola was actually getting screwed, as Apple was making extra money/profit on Motorola IP.

We don't know.  :S

Quote:
Originally Posted by rob53 View Post

I found an article from 2009 showing the component cost of an iPhone 3GS. The Infineon Technologies AG broadband chip only cost $13 (even if they used a Qualcomm it won't be that different) so Google/Motorola wants 1/13th the cost of the chip in licensing fees. That would be a little over $1/phone. From what I've read previously, Google wants 2.25% of the cost of the entire phone, which is insane. For Apple to play the mobile phone game, they had to use a 3G chip, otherwise it wouldn't work. Forcing someone to license a standards technology should be against the law.

Well, I don't know which of you is right, but if the quote above yours is, then I think Google's 2.25% is perfectly fair (2.25% of 140 is approx 3... to lazy to actually calculate) in my eyes.

If what you are saying is right, it is a complete rip off.

-QAMF

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post #13 of 51

Boo hoo. At least they are actually licensing the tech, unlike apple which would have patented it and sat on it refusing to share like a greedy toddler. 

post #14 of 51

Apple is no stranger to high asking prices.  

 

They offered to license non-essential patents like rubber banding to Samsung for "only" $30 per phone, or $40 per tablet... the equivalent of about 5% to 10% of the price.

 

 

 

Of course, if you cross-licensed, you got a better rate.  Exactly the same kind of deals that most SEP holders ask for.

 

 

Notice that if you didn't use a touchscreen, you got another 20% discount.  

post #15 of 51
Quote:
Originally Posted by KDarling View Post

Apple is no stranger to high asking prices.  

They offered to license non-essential patents like rubber banding to Samsung for "only" $30 per phone, or $40 per tablet... the equivalent of about 5% to 10% of the price.

So you don't get the concept of FRAND, either. Not surprising.

The idea of FRAND is that your patent is made a standard and you agree to a lower licensing fee. So there's nothing at all surprising about Apple charging more for a non-essential patent. That's how it's supposed to work.
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post #16 of 51
Quote:
Originally Posted by jragosta View Post


So you don't get the concept of FRAND, either. Not surprising.

The idea of FRAND is that your patent is made a standard and you agree to a lower licensing fee. So there's nothing at all surprising about Apple charging more for a non-essential patent. That's how it's supposed to work.

Exactly.

provided all the Motorola cases are FRAND (which I think they are) I hope Apple has better luck then they have had in the past month or so in cases.

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post #17 of 51
Quote:
Originally Posted by MikhailT View Post

I think one of the things the US Congress needs to do is establish a nation-wide FRAND database that's open to everybody. That way, when Apple get offered a rate, they can tell the company that on the FRAND database, it is not the same rate as they're offering to Apple.

Any companies found to offering a rate that's higher than FRAND database should be fined. The fine should be high enough that it'd cost the company more to pay it than decreasing the FRAND rate to match the database price.

Better yet, there should be a clearing-house where you go to get your licensing. This independent entity would be transparent in its data and offer a single rate.

 

This way.. if you are not paying to the clearing-house then you are liable... and no company can charge different rates to different licensees.

 

(that could be a good business)


Edited by iPilya - 7/26/13 at 7:56pm
post #18 of 51
Quote:
Originally Posted by jragosta View Post

The idea of FRAND is that your patent is made a standard and you agree to a lower licensing fee. 

 

You don't agree in writing to do that when you join an SSO like ETSI, but yes, courts can decide that lower fees make sense in return for higher numbers of licenses, so that the total compensation is at least as much as if it were a non-SEP.

 

In other words, there is nothing inherently less valuable about a FRAND patent.  

 

(In fact, they beat out non-SEPs over the long term, because people often find ways around those, but bypassing a standards essential patent is usually impossible once validated.)

 

Quote:
So there's nothing at all surprising about Apple charging more for a non-essential patent.

 

Which still doesn't negate the fact that Apple wanted a ridiculously high license fee for patents that can be worked around.

 

And their value has diminished because of that, and because of being invalidated.

Apple finally got smart and made deals for much lower fees with companies like HTC.


Edited by KDarling - 7/26/13 at 7:54pm
post #19 of 51
Quote:
Originally Posted by jragosta View Post


So you don't get the concept of FRAND, either. Not surprising.

The idea of FRAND is that your patent is made a standard and you agree to a lower licensing fee. So there's nothing at all surprising about Apple charging more for a non-essential patent. That's how it's supposed to work.

 

Beat me to it. Of course, what else would you expect from KD but his usual garbage posts.

 

Remember when he claimed that Motorola's asking prices were "fair" based on what they were charging other companies? How'd that turn out? Motorola is getting a fraction of what they tried to extort from MS which proves unequivocally they were asking an exorbitant amount. Now he doesn't talk about it anymore and would rather we all forget what he said.

 

Apple will prevail on this one. Motorola is a known patent abuser and lost a huge case against MS for trying the exact same thing (charging higher than normal rates to harm your competitors). Now Apple has precedent on its side. It's taken awhile, but soon Google/Motorola/Samsung will be exposed for what they are - thieves who don't respect others IP and who abuse their patents. Eventually they'll be ponying up.

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post #20 of 51
Quote:
Originally Posted by QAMF View Post

Exactly.


provided all the Motorola cases are FRAND (which I think they are) I hope Apple has better luck then they have had in the past month or so in cases.


-QAMF

Maybe you missed this in the article:
"Motorola has sued Apple in various forums for infringement of eight SEPs (presumably, its eight strongest SEPs) and is batting 0-for-8 in establishing liability in U.S. actions."

How can they do better than that?
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post #21 of 51
Quote:
Originally Posted by KDarling View Post

 

Which still doesn't negate the fact that Apple wanted a ridiculously high license fee for patents that can be worked around.

 

They'd have been better off to have come to a decent deal with Samsung like they later did with HTC (  ~ $5 per phone ?).

It does, because FRAND patents are things phones general "need"

"extra" stuff that a company makes they are free to set whatever they feel is a fair price.  To be honest, I am surprised Apple set the price so "low" considering their relationship with Samsung...

There is no reason why Apple should not change such high prices for their own non-FRAND patents.  Absolutely no reason.

I WISH they would not charge such a high price per use, and I wish that most patents for phones were free for everyone to use.  But I see nothing wrong with a Company exercising their rights.  Even if I do not believe the right(s) being exercised should exist.

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post #22 of 51
Quote:
Originally Posted by EricTheHalfBee View Post

Remember when he claimed that Motorola's asking prices were "fair" based on what they were charging other companies? 

 

You make up a lot of strawmen.  But that's expected from someone who hates facts.

 

I said their starting asking rate was in line with other known SEP rates.  And then I backed that up with a chart of those rates.

 

 

I also said that Motorola's asking price was lower than other rates that Apple pays, such as to Qualcomm.  And that's a fact, too.

post #23 of 51
Quote:
Originally Posted by KDarling View Post

 

You make up a lot of strawmen.  But that's expected from someone who hates facts.

 

I said their starting asking rate was in line with other known SEP rates.  And then I backed that up with a chart of those rates.

 

 

I also said that Motorola's asking price was lower than other rates that Apple pays, such as to Qualcomm.  And that's a fact, too.

Um, Qualcomm also is 350 patents, Motorola is 16.
adding only the patents used and the % per them (ie take out everything that has no patents, or no %) you get: 923 @ 13.80%

or, .0066% per patent.  Obviously, some are worth more (that is easy to tell) but I highly doubt that Motorola's are 2.25% 

Although, unless Apple goes after Alacate-Lucent (or unless they have some crazy valuable patent) this should not go through.

-QAMF


Edited by QAMF - 7/26/13 at 8:13pm

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post #24 of 51
Quote:
Originally Posted by KDarling View Post

Quote:
Originally Posted by EricTheHalfBee View Post

Remember when he claimed that Motorola's asking prices were "fair" based on what they were charging other companies? 

You make up a lot of strawmen.  But that's expected from someone who hates facts.

I said their starting asking rate was in line with other known SEP rates.  And then I backed that up with a chart of those rates.




I also said that Motorola's asking price was lower than other rates that Apple pays, such as to Qualcomm.  And that's a fact, too.

I don't believe this case involves LTE....
post #25 of 51
Quote:
Originally Posted by QAMF View Post

It does, because FRAND patents are things phones general "need"

"extra" stuff that a company makes they are free to set whatever they feel is a fair price.  To be honest, I am surprised Apple set the price so "low" considering their relationship with Samsung...

There is no reason why Apple should not change such high prices for their own non-FRAND patents.  Absolutely no reason.

I WISH they would not charge such a high price per use, and I wish that most patents for phones were free for everyone to use.  But I see nothing wrong with a Company exercising their rights.  Even if I do not believe the right(s) being exercised should exist.

-QAMF

Are the Motorola SEPs not mainly code embedded in chips, so is very much hardware-oriented and without that hardware, you just could not build a working phone?

 

Whereas the rubber-band/bounce effect is very much software within the OS. My own take on this is that Apple quotes high prices for licensing patents in the knowledge that the potential-licensee would refuse thereby giving Apple some degree of exclusivity on certain functions and aesthetics within its OS.

post #26 of 51
Quote:
Originally Posted by Wovel View Post

I don't believe this case involves LTE....

 

Sorry, I forget that many people don't recall the charts from before.  As pointed out previously, LTE rates are  the same or very similar to 3G rates.  As the source document authors put it:

 

"In fact, the announced royalty rates for LTE (4G) are exactly within the range Goldstein and Kearsey observed in 2004 for UMTS/WCDMA (3G) technology where the authors commented that “individual patent owners usually charge between 0.5 and 4 percent on essential patents."

 

Of course, the chart's number of patents are not correct for 3G.

 

Quote:
Originally Posted by EricTheHalfBee View Post

Apple's patents were not invalidated. They were "preliminarily invalidated". There's a huge difference, and you're fully aware of this, yet you choose to make a comment that is basically a lie.

 

First, don't be so parochial.  Smartphones are sold worldwide, where some of those patents HAVE been invalidated.  E.g. Germany and the slide-to-unlock patent.

 

Secondly, even in the USA important claim sections have been invalidated, with Apple forced to modify them :

 

Key Claim In Apple's Rubber Banding Patent Still Found Invalid in Final (USPTO) Action - AppleInsider


Edited by KDarling - 7/29/13 at 4:26am
post #27 of 51
The ppl who think 2% would be fair forget that modern devices likely use dozens of standard essential patents: camera, media codecs, battery technology, screens, chip manufacturing, etc.
If everyone tried license fees like Motorola/Google, Apple would end up paying more in license fees than the sale price of the phone.
post #28 of 51
Quote:
Originally Posted by mrrodriguez View Post

Yeah, most likely the manufacturer was charging Apple $140 or some odd dollars for the iPhone, so Motorola was getting the 2.25 percent of that, while Apple was turning around and selling the device for $650 or what not. So Motorola was actually getting screwed, as Apple was making extra money/profit on Motorola IP.

Nowadays most high-end cars have SIM cards, part of the in-car navigation system.

Are you suggesting that Mercedes / Lexus / etc. should pay Motorola $2,250 license for a $100,000 car? Otherwise they'll be making extra money/profit on Motorola IP?

Could you, please, clarify how a license related to communication stretches over components that have nothing to do with it? Those include the CPU, GPU, memory, battery, enclosure, display, touch sensors, gyroscope, accelerometer, etc. The iPhone price also includes the OS and the default applications included. Also, it covers for the iCloud expenses (for those using only the free services). Apple Maps being a free application is again paid for by slicing part of the iPhone/iPad income.

So, Motorola should be taking 2.25% on all the components included (hardware, software and services)?
post #29 of 51
Quote:
Originally Posted by quinney View Post


I thought Motorola was threatening to file patent suits against other Android handset companies and Google wanted to prevent that.

 

 

Strange how people often ignore this.

post #30 of 51

Strange how people often ignore the 8 Billion tax loss carry-forward Motorola had.

post #31 of 51
It might have something to do with the fact that Qualcom has 350 patents and Motorola only has … er um. …. wait let me check again … yup ONLY 16.

You do the math.
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post #32 of 51
Quote:
Originally Posted by smalM View Post

Strange how people often ignore the 8 Billion tax loss carry-forward Motorola had.

And when remembering this forget that at a marginal corporate income tax of 35% this is worth less than 3 B, not 8.

post #33 of 51
Cars run without motorola patents, phones don't.
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post #34 of 51
Quote:
Originally Posted by rickag View Post

It might have something to do with the fact that Qualcom has 350 patents and Motorola only has … er um. …. wait let me check again … yup ONLY 16.  You do the math.
 
As noted in a post a bit after that, even though the chart's rates also apply to 3G, the number of patents listed were LTE only.   I'll have to go look it up, but recall that Motorola basically invented cell phones, so their patents for earlier GSM phones were far more numerous.
 
Not that it matters that much.  It's not the number of patents, it's what the contribution of the main ones are.  If rates were based on number of patents instead of importance, every contributor would dump stupid amounts of silly patents in.
 
Quote:
Originally Posted by rcfa View Post

The ppl who think 2% would be fair forget that modern devices likely use dozens of standard essential patents: camera, media codecs, battery technology, screens, chip manufacturing, etc.
If everyone tried license fees like Motorola/Google, Apple would end up paying more in license fees than the sale price of the phone.

 

Which is exactly why everyone else cross-licensed their patents and ended up paying way less than the starting ask rate.  For example, supposedly Nokia only pays 3% TOTAL royalties, because of all their cross-licensing deals since day one.

 

Cross licensing was common before Apple came along and refused to play by the same unwritten rules everyone had used for decades.  By not wanting to cross-license, they have caused the rate structure to be re-examined.  Which many non-founders consider to be a good thing.

 
Quote:
Originally Posted by capasicum View Post

Are you suggesting that Mercedes / Lexus / etc. should pay Motorola $2,250 license for a $100,000 car?

 

No. They would only pay a license on the radio system, not the car / airplane / boat that holds the system.

 

Quote:
Could you, please, clarify how a license related to communication stretches over components that have nothing to do with it? ...

 

Depends on the deal they make.  For example, Apple supposedly pays Qualcomm's 3% to 4% IP royalty based only on what the iPhone costs (~$240) coming out of Foxconn.

 

(That's on top of what Apple pays Qualcomm for the chip, btw.  The physical device cost is a set price.  The price for the IP required for your particular usage and for the broadband software is variable.)

post #35 of 51
Quote:
Originally Posted by Cash907 View Post

Boo hoo. At least they are actually licensing the tech, unlike apple which would have patented it and sat on it refusing to share like a greedy toddler. 
Moto licensed tech because they made the patents as SEP. Apple can patent tech for its own use and they aren't SEP. a lot of companies do that. Do you consider them toddlers? Perhaps you should change your thought diaper. It appears to be full.
post #36 of 51
Quote:
Originally Posted by KDarling View Post

Cross licensing was common before Apple came along and refused to play by the same unwritten rules everyone had used for decades.  By not wanting to cross-license, they have caused the rate structure to be re-examined.  Which many non-founders consider to be a good thing.

Ah, horsepoop! Apple has cross-licensing agreements with a variety of companies, and Apple contributed plenty of patents to standard-essential patent pools, e.g. media codec and media file container related patents.

However, no company in their right mind cross-licenses the crown jewels. For Apple, that's the GUI, user interface, software integration, etc. and none of these are standards-essential patents.

The people who violate the unwritten rules are Google & Co. who try to leverage standard essential patents to get a grab on non-standard essential patents.
post #37 of 51
Quote:
Originally Posted by rcfa View Post


The people who violate the unwritten rules are Google & Co. who try to leverage standard essential patents to get a grab on non-standard essential patents.

Motorola Mobility is not interchangeable with Google (even tho FOSSPatents loves to do so.)

Google has never asserted a standards-essential patent against anyone. Ever. Period. Until this year they hadn't asserted any patent of any kind against anyone. Ever. Period.

If you're curious about the only patent infringement suit Google has ever filed do a search for Google sues British Telecom.

The current infringement cases against Apple and Microsoft were started by Motorola well before Google showed any interest in purchasing them. Google's evilness? They didn't order MM to drop the lawsuits as soon as they purchased them last year, even tho Apple and Microsoft haven't indicated they'd be willing to do the same.

MM wasn't absorbed by Google. They are operated as a separate company with it's own management, in-house legal counsel and board of directors which is hardly unusual for any subsidiary, much less one the size of Google.
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Edited by Gatorguy - 7/28/13 at 5:28am
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post #38 of 51
Quote:
Originally Posted by mrrodriguez View Post


Yeah, most likely the manufacturer was charging Apple $140 or some odd dollars for the iPhone, so Motorola was getting the 2.25 percent of that, while Apple was turning around and selling the device for $650 or what not. So Motorola was actually getting screwed, as Apple was making extra money/profit on Motorola IP.

The component manufacturer doesn't usually get to just make more because the company selling a product makes more. If you used a small FRAND device in a Mercedes -- do they suddenly get $120 for a tiny component?

 

The point of FRAND is that a company gets a great deal being the established tech in exchange for keeping prices low and selling to EVERYONE. It's not like other tech could not replace Motorola's patent -- it's just important to have a STANDARD.

 

If a company can arbitrarily choose to raise prices because someone is charging more, or because they don't have a special relationship -- you've defeated the purpose of FRAND licensing and creating a standard -- and you can't have a damn standard if everyone is forced to go with other IP. It's not about "Motorola's awesome tech" -- it's only about Motorola being lucky enough to be the standard, and the tech is fairly non-special to begin with.

post #39 of 51
Quote:
Originally Posted by rcfa View Post


Ah, horsepoop! Apple has cross-licensing agreements with a variety of companies, and Apple contributed plenty of patents to standard-essential patent pools, e.g. media codec and media file container related patents.

However, no company in their right mind cross-licenses the crown jewels. For Apple, that's the GUI, user interface, software integration, etc. and none of these are standards-essential patents.

The people who violate the unwritten rules are Google & Co. who try to leverage standard essential patents to get a grab on non-standard essential patents.

Good points. But the "crown jewels" as you call them are not NECESSARY to make phones and of course they are a competitive advantage -- though Samsung has proven that you can ignore sun if you want. The Cross-licensing is necessary for everyone to have phones that interoperate with each other. IF nobody could use FRAND patents -- then for every cell phone provider you'd need a special chip on every cell phone tower, and likely you'd have competing yet barely different tech for compressing and transmitting signals. In essence; you'd have a complete and expensive mess and either one monopoly or no cell phone system at all.

 

Cell Phones are wonders of modern technology and everyone is using everyone else's tech. Some of it is revolutionary, and a lot of it is "we specialize at making this component" -- so no point in everyone reinventing the wheel. Likely a lot of the cross-licensing is about "not worth being sued over" and everyone pays everyone else little fees such that it's probably a wash. However, some companies make more money licensing things to Apple than they make selling their own tech.

 

If Motorola gets away with arbitrary price-gouging on a FRAND patent -- then the entire system is in Jeopardy. If everyone did the same, cell phones would cost thousands of dollars in cross licensing fees or there would be too many non-standard parts and, again, we wouldn't have cell phones.


Edited by Fake_William_Shatner - 7/28/13 at 6:37am
post #40 of 51
Quote:
Originally Posted by Fake_William_Shatner View Post


If Motorola gets away with arbitrary price-gouging on a FRAND patent -- then the entire system is in Jeopardy.

If that ever happens I would agree. Pretty much "same as it ever was" since the first CDMA standards were established over 20 years ago AFAIK. Companies even then set their royalties to the cost of the device itself, not just the chipset used. Not much has really changed in SEP licensing up until very recently with Apple leading an effort to change the long established policies. 1hmm.gif

Do a search for Qualcomm royalty basis as an example. I'll give you a good article to start with. This one is a dozen years old, long before the Apple entered the mobile phone business.
http://money.cnn.com/magazines/fortune/fortune_archive/2000/05/15/279766/index.htm
Edited by Gatorguy - 7/28/13 at 6:50am
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