2.25% on 829 is 18.64, or more than the cost of the parts the radio makes up. Even if you only take into account the 130$ price difference between an iPad and a iPad with 3G, is only 2.9$
A percentage of the finished item is not FRAND any way you frame it. Does everyone remember what happens to companies that undermine standards? Look up RAMBUS.
I seem to recall both Nokia and Qualcomm basing their fee on the price of the completed unit. As long as it's the same for all parties I can see how that would be considered fair, reasonable and non-discrimatory in the overall sense.
I do like that Apple is challenging this. It seems outrageous that so many companies can be taking percentages of profit right off the top for a component part that is required for a product to work in the market.
I seem to recall both Nokia and Qualcomm basing their fee on the price of the completed unit. As long as it's the same for all parties I can see how that would be considered fair, reasonable and non-discrimatory in the overall sense.
I do like that Apple is challenging this. It seems outrageous that so many companies can be taking percentages of profit right off the top for a component part that is required for a product to work in the market.
We do sometimes agree on certain points. This mirrors my own opinion, and put quite succinctly.
I don't see that as unfair in business. It's business, cat and mouse. Apple are attempting to get access to the patents using the back door, Moto are closing it. The game continues. That's business.
Actually, if the claims in the court document are true, that's the definition of unfair and discriminatory. There is no 'back door'. Your implication is that Apple is attempting to utilize something illicitly which it has no rights to.
Motorola made an agreement with the chip manufacturers which allowed them to use their technology in the chips, and sell them to third parties. Included in that agreement was the royalty fee for the use of the IP. Apple made agreements with the chip manufacturer(s) to buy the licensed chips for use in devices to sell to third parties. The chip manufacturers cost to Apple includes the cost of building the chip (which includes the cost of the licensing of the IP). Then Motorola then says that the otherwise valid agreement with the chip manufacturer is revoked because they sold their properly-licensed product to a specific third party (Apple). Unless the original terms of the agreement between Moto and the chip manufacturers contained explicit wording that invalidated the agreement if they sold to Apple, then that's, by definition, unfair. On top of that, even if they did include that wording, then unless they also offered an agreement to Apple to license the IP on the basis of the same cost (% of the price of the chip - not another basis) as was offered to the chip manufacturer, then that's discriminatory.
Try this wording: Motorola isn't asking for royalties for Apple's use of the technology, they're asking for royalties for the chip manufacturers' use of the technology. Apple's products use the chips (which Apple paid for), not Moto's IP. The chips use Moto's IP (which the chip manufacturers' paid for).
And how about this: let's say the electronics etc for the camera in the iPhone accounts for roughy 10% of the price of the phone (just a fictional number for demonstration purposes). The camera doesn't use the chip incorporating Motorola IP for GSM communications to function. Yes, the data from the phone can be saved in memory, then the data can be processed through the chip to be sent across the cellular network, but the camera's functionality is not linked to the chip in any way. However, Motorola is suggesting that Apple should be paying 2.25% of the money generated by the camera functionality because some other part of the product uses Moto's IP - even though they're completely separate.
2.25% (or any percentage) of the price of the chip might be one thing - if they weren't unfairly discriminating against Apple (as in, they're not asking everyone else who incorporated the chips in their devices for the same) by requesting that "double-dip" royalty. However, 2.25% of all the other unrelated components in the finished device is unreasonable.
If this was in truth "fair", then Motorola would also be well within their rights to knock on the door of every person who purchased a phone that incorporated those chips (which incorporated their technology), and demand a royalty of 2.25% of the selling price of the device, because the user is using the phone, which uses the chip, which uses the Moto IP. They could also contact every application developer that used GSM communications from a smartphone, because every copy of the application which is sold can use the device, which uses the chip, which uses the Moto IP. What about the automobiles with the integrated bluetooth connectivity? Now the car is using the phone, which uses the chip, which uses the IP. Should Motorola be collecting 2.25% of that 35,000.00$ car (on top of the collected 2.25% of the 650.00$ phone, and 2.25% of the 30.00$ chip)?
You may not consider it fair and reasonable, and I may not either. That doesn't make it so in the eyes of any governing body. There's not currently any set method for determining the appropriate fee for a patent deemed essential. That's why Apple has asked the EU's European Telecommunications Standards Institute (ETSI) to establish some basic ground rules.
Consider this: At some point Apple's touch patents could potentially be deemed essential and included in a package of FRAND-encumbered patents by the same ETSI, no matter if Apple agrees or not. Would anyone's opinion of a fair royalty amount be different if it was Apple's IP being priced?
No actual argument, but that doesn't stop Gatorguy from going full speed ahead on the FUD.
But, equating basic telecom standards with touch screen technology, really? He's really showing his desperation there. Well, I guess he has to try to earn his fee somehow.
I'v seen numerous mentions in this thread about Qualcomm having a license to Moto's patents bundled with the chip and that Moto pulled that license with regard to Apple or alternatively that Moto is trying to "double-dip", charging both Qualcomm and Apple for licensing. Not true.
To clear up the confusion, Moto's issues aren't with the chipset in Apple's most recent iPhone, the 4S. That chip carries a license via Qualcomm and isn't subject to any possible injunction under this particular action. The chipset that does not have licensing included is used in the older iPhone 4, 3GS and 3G whose chips came from Infineon.
No actual argument, but that doesn't stop Gatorguy from going full speed ahead on the FUD.
But, equating basic telecom standards with touch screen technology, really? He's really showing his desperation there. Well, I guess he has to try to earn his fee somehow.
While not completely synonymous because a touchscreen isn't required for a cellphone the way certain cellular radios standards are, I assume he choose that general feature because Apple has patented the hell out of it and popularized the multi-touch capacitance touchscreen that no-one* was using prior to the iPhone and everyone is using today.
* I mean no-one! LG's Prada was a single-input capacitance display. That means no pinching or other such actions that I think are protectable patents that revolve around the multi-touch capacitance technology.
I'v seen numerous mentions in this thread about Qualcomm having a license to Moto's patents bundled with the chip and that Moto pulled that license with regard to Apple or alternatively that Moto is trying to "double-dip", charging both Qualcomm and Apple for licensing. Not true.
To clear up the confusion, Moto's issues aren't with the chipset in Apple's most recent iPhone, the 4S. That chip carries a license via Qualcomm and isn't subject to any possible injunction under this particular action. The chipset that does not have licensing included is used in the older iPhone 4, 3GS and 3G whose chips came from Infineon.
Do we know why the Infineon chips were unlicensed (yes, I'm asking honestly)? Was it a case of Infineon deliberately manufacturing chips with no license agreement ever in place, or was it this talk we're hearing about Motorola trying to pull a license because they [Infineon] were selling to Apple specifically?
If Apple really wants to destroy Google, they would have to slay the dragon in the heart - that would be Google's search engine. Most of us use Google search and this is where Google gets all their money. Then they use the profits from advertising to do silly things like buy Motorola and fund the Android project even though there's no money in it.
To kill the Google search engine, Apple would need to find a way to persuade people not to use it. And they actually have a very persuasive lady by the name of Siri... If Apple was to make Siri available for free to every computing device out there: PCs, laptops, smartphones, you name it, and have Siri use alternative search databases not named Google, it wouldn't take long before Google as a company will be left in the dust. I think the Google search engine is great, but the people behind it are a bunch of goons.
post #86, perhaps it is time to list your confict of interests.. i.e do you work for google or motorola? because the tone of voice of the post seems to suggest that you know more than you let on. (not to mention the debate rule #x, "never waver, that means you've lost" tactic. ).
Consider this: At some point Apple's touch patents could potentially be deemed essential and included in a package of FRAND-encumbered patents by the same ETSI, no matter if Apple agrees or not. Would anyone's opinion of a fair royalty amount be different if it was Apple's IP being priced?
I believe Apple has to offer its patents as FRAND. Outside groups can't force them to do that. Besides, multitouch isn't essential on phones.
If Apple charges Moto $10 and HTC $5, then that wouldn't be fair. Moto can't charge Apple $15 and HTC $5 for example just because Apple makes most of the profits.
post #86, perhaps it is time to list your confict of interests.. i.e do you work for google or motorola? because the tone of voice of the post seems to suggest that you know more than you let on. (not to mention the debate rule #x, "never waver, that means you've lost" tactic. ).
I don't own Google stock, Apple stock, Motorola stock, nor any tech stock (other than some small amount of Qualcomm bought years ago). I have no inside sources, "special relationships" with any mobile provider, and derive no income from any of the players in smartphones or tablets. The closest I get is occasional beta-testing for gps devices or getting a rare pre-release press evaluation device from a company similar to Garmin or TomTom. Never a smartphone or tablet.
EDITTED to remove personal details posted earlier today
No one has shown my points to be wrong yet. Pehaps you're the one that can show Moto expects more from Apple than their other licensees?
Ugh, for crying out loud, NO ONE is saying Moto is discriminating against Apple. People are saying Moto is being *unfair* and *unreasonable*. They are starting down a path of taking a shotgun to the entire industry. First Apple, now Microsoft. They are fussing over a single patent *pledged* to a standards body in order to be incorporated into an industry standard. They chose to do that. These patents usually deserve a percentage royalty on the price of the *chip* not a $600 finished product.
If Moto wins this case, and gets anywhere close to what they're demanding, a dangerous precedent would be set. You know how many FRAND patents are used by any cellphone? What if other companies followed suit? Prices would go up.
Further, what is *reasonable* is not up to the patent holder; it is up to the courts.
Also, please learn the difference between FRAND patents and regular patents. FRAND patents give up much of the patent holder's rights as they are pledged in order to be incorporated into an industry standard.
I believe Apple has to offer its patents as FRAND. Outside groups can't force them to do that. Besides, multitouch isn't essential on phones.
Not true. At least in the EU, ETSI policies allow patents to be declared essential and legally required to be licensed even in the rare instance that a patent holder disagrees or resists being included in a standard.
You may not consider it fair and reasonable, and I may not either. That doesn't make it so in the eyes of any governing body. There's not currently any set method for determining the appropriate fee for a patent deemed essential. That's why Apple has asked the EU's European Telecommunications Standards Institute (ETSI) to establish some basic ground rules.
Well, there are plenty of basic ground rules established for standards and patents deemed FRAND as part of an open standard. That's why what Motorola is doing is not right -- they are acting against the rules of something they entered into.
No, what Apple will be interested in getting a ruling on, is ground rules concerning the prohibition of, and penalties for, some jealous company running to a judge with a load of specious arguments concerning a blatant case of a FRAND patent, and asking for and receiving an injunction against the sale of their competitor's product while the matter gets sorted out.
1) The patent they ran to the judge with was a FRAND patent, undisputed. On that basis alone, no injunction should be brought as a first measure. The burden of proof should be on the one bringing the case, as to why a special agreement needs to be reached in the case of this particular competitor; and failing every effort to secure a special licensing agreement if one is even required outside the standards group the patent is part of, why an injunction is necessary.
2) Motorola is one party of a group into which these patents have been pooled voluntarily. The whole point of the group and FRAND is that one party (in this case, a holder of 17 out of how many, 100's of patents in this standard) cannot hold up the process of standard adoption and hold someone ransom. That's why standards are adopted. They need to act as a group. The group could examine Moto's complaint, investigate a little, and tell Motorola to shut up. After all, everyone in the group has an interest in this.
That alone should be enough to get Moto into big antitrust trouble.
Quote:
Originally Posted by charlituna
Because it is supposed to be the same amount, not rate. And 2.25% of $100k in sales is a lot different than 2.25% of $100m
Where do the FRAND rules say the same total amount? It doesn't make sense that a company that makes 10,000 mobile phone would pay the same amount as a company that makes 100 million. It is clearly a percentage.
Quote:
Originally Posted by WaltFrench
I've been trying to track this issue for some time. Basically, this guy Mueller sources about 110% of all the real information; if he doesn't report it, it goes unsaid. FossPatents.BlogSpot.Com. Read his conflict statement and be as careful as he is about separating fact & opinion ? you sound like the type who'll be able to do so, but this is a huge, complex area and it may not be easy.
On to your concerns that this sounds like people have their hair on fire: there were something like 1200 patents that went into the various pieces of the GSM standard; if you don't implement all, you don't have a GSM capable device. If each one is worth 2.25% of your product, you would have to pay about $18,000 on a $600 phone. See a possible case that 2.25% each might not be reasonable? Obviously, nobody is paying that. And the claim that the IP Moto gets from other GSM Musketeers (?all for one & one for all?) makes it fair still can't hold water. This is simply an attempt to lock Apple out of GSM telephones in Europe. Period.
The MPEG-LA deal is even stranger. You can go to their website and see their claim that THEY license AVC/h.264 as a pool. So why is Moto, which put its patents into the pool, trying to separately sue Microsoft over Windows 7, IE9, WMP and Xbox, when Microsoft is already a licensor of the patents? And why at a rate that is many times as much as MPEG-LA's claimed rate? Supposedly, when these firms all agreed to put their patents into a pool, they agreed to a split on the (very modest) licensing revenues, and a company that wants to implement it can sign one deal, not worrying about one individual such as Moto holding them up. I never saw a formal count of the h.264 patents, but scanning thru the list, with possible overlaps due to multiple countries, I'd guess 3,000 of 'em. Who is going to implement h.264 if they have to negotiate a separate deal for each, especially when a holdout can perform highway robbery?
The MPEG-LA deal has an explicit promise of FRAND, and it's totally bizarre that this can happen. I hope we'll hear them describe why anybody should ever trust them again. Maybe they only cover US licenses? I am not an expert here, just a hobbyist following the issue, but something makes zero sense.
The GSM deal has an even more interesting history. Moto was one of a handful of companies that invented the GSM standard with the intent of splitting up the business between 'em. You can Google & find some academic and industry papers that claim Moto was active in keeping Japanese competitors out of the European market, and slowing GSM's acceptance in other markets, for its purposes way back in the 90s. This appears to have been tolerated because the various government-owned telecoms wanted to promote the European businesses (Nokia, Ericcson, Alcatel, ..., look 'em up) and so turned a blind eye to blatant anti-trust actions. To get the GSM accepted around the world, the patent-holders went low-key on rights, but I don't think there's ANY formal commitment on the books to do anything Fair, Reasonable or Non-Discriminatory. (In this regard, I think Mr. Mueller has not paid enough attention to specific rules and contracts, relying too much on common sense and sound legal principles? in normal times, quite a plus, but not so much here, I fear.)
The one thing that this news DOES confirm is my suspicion last August that Motorola rushed Google into buying them by pulling the pin on a grenade of a huge patent kerfuffle against any & all. At the time, Jha and Icahn (CEO & biggest shareholder, respectively) said they were going after ?newcomers? in smartphones, which many took to mean the Android partners, to exploit their patent holdings. That would've killed Android, so Google paid whatever it had to ? fell on the grenade ? to shut up Moto.
Does the fact that Google offered NO assurances to the EU anti-trust regulators by today's deadline mean that they are going to let go of the deal, and Moto is free to make a mockery of Schmidt's ?bogus patents? claim? It's too bad that no real journalists have seriously picked up on this thread (only some lightweight stories quoting Mueller in Bloomberg, the WSJ, NYT and the Guardian) because it sure looks HUGE about the future of Android and the whole smartphone industry.
QFT.
Quote:
Originally Posted by hill60
Try 20-30 THOUSAND FRAND patents per device and you'd be closer to the mark.
I don't know the correct number. The above poster says 1,000. You say 20-30,000. I guessed 50. It's really irrelevant. At 2.25%, the license fee would be many times higher than the total cost of the device, so 2.25% can't be fair or reasonable.
Quote:
Originally Posted by Gatorguy
I don't, which is why Mr. Mueller claiming 2.25% is fair, unfair, the right thing to do or whatever isn't my sole reference. Do I consider it "fair"? Not really.
There's a lot of the IP stuff that I personally don't consider fair. Or reasonable. I might feel differently if I had a horse in the race, but I don't.
For this discussion tho I'm not doing anything more that pointing out that Moto's royalty request is reported to be consistent, thus non-discriminatory, and there's no indications other than Mr. Muellers' (and of course Apple and MS) that 2.25% is unreasonable, and even he doesn't suggest it's illegally high. IMO some of the opinion and claims in the AI article aren't supported by the facts as they're currently known. That could change as the case moves thru the courts. For now I don't see that Moto is expecting anything from Apple that they haven't expected from other licensees. Do you?
What you're missing is that in addition to Mueller's word, we also have examples that he's cited stating that typical FRAND fees are orders of magnitude lower than Moto's demand. Not to mention the simple analysis above that 2.25% would be absolutely impossible since the license fees would be far greater than the cost of the device.
CLEARLY (to anyone but a paid Google shill), Moto's demand for 2.25% for a single patent is absurd.
Motorola revokes the licenses of companies like Qualcomm, Infineon and Broadcom when they sell chips to Apple.
Other companies pay for the chips with the license fee paid based on the value of the chip.
Apple is being singled out for unfair and discriminatory treatment.
Quote:
C. Negotiations for Licensing between Apple and Motorola
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.
Quote:
D. Motorola?s Termination of the Qualcomm License
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.
Ugh, for crying out loud, NO ONE is saying Moto is discriminating against Apple. . . .
The original article makes that exact claim of discrimination, even if others in the thread hadn't already insinuated that.
Quote:
Originally Posted by Pendergast
These patents usually deserve a percentage royalty on the price of the *chip* not a $600 finished product.
I don't necessarily disagree, but Apple already has a history of agreeing to royalties based on the total charge for the licensed device and not just a chipset. The royalty basis that Apple uses to pay Nokia is the first one that comes to mind. Royalties based on a percentage of the total device selling cost apparently aren't unusual.
EDIT: It seems even Apple agrees that royalty rates be tied to the total device price rather than specific chipsets or other included hardware. Apple' would just like that price to be based on the industry average selling price for a basic phone (or some other comparable device?) capable of using the standard rather than their specific product. The fact that Apple can make more on it's iPhone using the standard compared to an LG dumb-phone shouldn't matter in their view. Share the wealth isn't part of their equation. Can't say as I blame them.
If Moto wins this case, and gets anywhere close to what they're demanding, a dangerous precedent would be set. You know how many FRAND patents are used by any cellphone? What if other companies followed suit? Prices would go up.
Other companies with FRAND commitments were making demands along these lines before this spat with Apple occurred, and those claims from others will continue no matter what happens in this case IMHO.
Quote:
Originally Posted by Pendergast
Further, what is *reasonable* is not up to the patent holder; it is up to the courts.
It looks like as it now stands it's almost entirely up to the patent holder. That's why disagreements end up in court, not because courts are the ones setting the pricing. There are no legal standards set on how the value of a FRAND-pledged patent should be determined unless you have something to show that I haven't yet seen.
Quote:
Originally Posted by Pendergast
Also, please learn the difference between FRAND patents and regular patents. FRAND patents give up much of the patent holder's rights as they are pledged in order to be incorporated into an industry standard.
Do we know why the Infineon chips were unlicensed (yes, I'm asking honestly)? Was it a case of Infineon deliberately manufacturing chips with no license agreement ever in place, or was it this talk we're hearing about Motorola trying to pull a license because they [Infineon] were selling to Apple specifically?
No I don't, and I've been searching. I find press announcements on Infineon being chosen to develop a 3G chip under a contract with Motorola and using Moto IP. Otherwise nothing yet.
Not true. At least in the EU, ETSI policies allow patents to be declared essential and legally required to be licensed even in the rare instance that a patent holder disagrees or resists being included in a standard.
You clearly don't understand basic logic. If a patent is required to implement a standard, the body may require FRAND terms for its licensing, but we're not talking about eminent domain of random patents into a pool.
Apple has FRAND licensed patents and offers a variety of FREE patents for certain uses, such as its gift of Canvas and the patents it uses to the worldwide web for use with HTML5.
Apple isn't seeking to gain its money from patent licensing. It makes its money selling real products. Motorola can't earn money selling smartphones, so it's resolved to become a patent troll.
How Motorola expects the world to let this fly is beyond belief. It's absurd. Motorola is demanding over $1 billion of Apple's iPhone revenues from last year, and a perpetual future royalty on products going forward. This is insane, particularly when comparing Apple's deal with Nokia.
It's pretty clear that Motorola has become a puppet of Google, and Google is desperately trying to make some money in the smartphone business given that it has made less than $1 in the last year from Android directly (more than half of its ad revenues estimated to reach $2.5 b were from iOS).
Look at the money, not the bs activation numbers. Google screwed the pooch and is desperately trying to remain relevant. Android is now an albatross given that Samsung (its only significant and successful licensee) is ready to strike out on its own. It's now a cash sink, the equivalent to Xbox in 2000, except it's not battling a feeble Sony but rather Apple and Microsoft.
Comments
You must have never had a Motorola V60. The return/breakage rate on that phone as astronomical. The RAZR devices were extremely brittle as well.
2.25% isn't FRAND, consider that the radio components of the iPad costs less than 18.70$:
http://www.isuppli.com/PublishingIma..._iPad2_BOM.png
2.25% on 829 is 18.64, or more than the cost of the parts the radio makes up. Even if you only take into account the 130$ price difference between an iPad and a iPad with 3G, is only 2.9$
A percentage of the finished item is not FRAND any way you frame it. Does everyone remember what happens to companies that undermine standards? Look up RAMBUS.
I seem to recall both Nokia and Qualcomm basing their fee on the price of the completed unit. As long as it's the same for all parties I can see how that would be considered fair, reasonable and non-discrimatory in the overall sense.
I do like that Apple is challenging this. It seems outrageous that so many companies can be taking percentages of profit right off the top for a component part that is required for a product to work in the market.
I seem to recall both Nokia and Qualcomm basing their fee on the price of the completed unit. As long as it's the same for all parties I can see how that would be considered fair, reasonable and non-discrimatory in the overall sense.
I do like that Apple is challenging this. It seems outrageous that so many companies can be taking percentages of profit right off the top for a component part that is required for a product to work in the market.
We do sometimes agree on certain points.
I don't see that as unfair in business. It's business, cat and mouse. Apple are attempting to get access to the patents using the back door, Moto are closing it. The game continues. That's business.
Actually, if the claims in the court document are true, that's the definition of unfair and discriminatory. There is no 'back door'. Your implication is that Apple is attempting to utilize something illicitly which it has no rights to.
Motorola made an agreement with the chip manufacturers which allowed them to use their technology in the chips, and sell them to third parties. Included in that agreement was the royalty fee for the use of the IP. Apple made agreements with the chip manufacturer(s) to buy the licensed chips for use in devices to sell to third parties. The chip manufacturers cost to Apple includes the cost of building the chip (which includes the cost of the licensing of the IP). Then Motorola then says that the otherwise valid agreement with the chip manufacturer is revoked because they sold their properly-licensed product to a specific third party (Apple). Unless the original terms of the agreement between Moto and the chip manufacturers contained explicit wording that invalidated the agreement if they sold to Apple, then that's, by definition, unfair. On top of that, even if they did include that wording, then unless they also offered an agreement to Apple to license the IP on the basis of the same cost (% of the price of the chip - not another basis) as was offered to the chip manufacturer, then that's discriminatory.
Try this wording: Motorola isn't asking for royalties for Apple's use of the technology, they're asking for royalties for the chip manufacturers' use of the technology. Apple's products use the chips (which Apple paid for), not Moto's IP. The chips use Moto's IP (which the chip manufacturers' paid for).
And how about this: let's say the electronics etc for the camera in the iPhone accounts for roughy 10% of the price of the phone (just a fictional number for demonstration purposes). The camera doesn't use the chip incorporating Motorola IP for GSM communications to function. Yes, the data from the phone can be saved in memory, then the data can be processed through the chip to be sent across the cellular network, but the camera's functionality is not linked to the chip in any way. However, Motorola is suggesting that Apple should be paying 2.25% of the money generated by the camera functionality because some other part of the product uses Moto's IP - even though they're completely separate.
2.25% (or any percentage) of the price of the chip might be one thing - if they weren't unfairly discriminating against Apple (as in, they're not asking everyone else who incorporated the chips in their devices for the same) by requesting that "double-dip" royalty. However, 2.25% of all the other unrelated components in the finished device is unreasonable.
If this was in truth "fair", then Motorola would also be well within their rights to knock on the door of every person who purchased a phone that incorporated those chips (which incorporated their technology), and demand a royalty of 2.25% of the selling price of the device, because the user is using the phone, which uses the chip, which uses the Moto IP. They could also contact every application developer that used GSM communications from a smartphone, because every copy of the application which is sold can use the device, which uses the chip, which uses the Moto IP. What about the automobiles with the integrated bluetooth connectivity? Now the car is using the phone, which uses the chip, which uses the IP. Should Motorola be collecting 2.25% of that 35,000.00$ car (on top of the collected 2.25% of the 650.00$ phone, and 2.25% of the 30.00$ chip)?
You may not consider it fair and reasonable, and I may not either. That doesn't make it so in the eyes of any governing body. There's not currently any set method for determining the appropriate fee for a patent deemed essential. That's why Apple has asked the EU's European Telecommunications Standards Institute (ETSI) to establish some basic ground rules.
http://www.appleinsider.com/articles...l_patents.html
Consider this: At some point Apple's touch patents could potentially be deemed essential and included in a package of FRAND-encumbered patents by the same ETSI, no matter if Apple agrees or not. Would anyone's opinion of a fair royalty amount be different if it was Apple's IP being priced?
No actual argument, but that doesn't stop Gatorguy from going full speed ahead on the FUD.
But, equating basic telecom standards with touch screen technology, really? He's really showing his desperation there. Well, I guess he has to try to earn his fee somehow.
To clear up the confusion, Moto's issues aren't with the chipset in Apple's most recent iPhone, the 4S. That chip carries a license via Qualcomm and isn't subject to any possible injunction under this particular action. The chipset that does not have licensing included is used in the older iPhone 4, 3GS and 3G whose chips came from Infineon.
No actual argument, but that doesn't stop Gatorguy from going full speed ahead on the FUD.
But, equating basic telecom standards with touch screen technology, really? He's really showing his desperation there. Well, I guess he has to try to earn his fee somehow.
While not completely synonymous because a touchscreen isn't required for a cellphone the way certain cellular radios standards are, I assume he choose that general feature because Apple has patented the hell out of it and popularized the multi-touch capacitance touchscreen that no-one* was using prior to the iPhone and everyone is using today.
* I mean no-one! LG's Prada was a single-input capacitance display. That means no pinching or other such actions that I think are protectable patents that revolve around the multi-touch capacitance technology.
I'v seen numerous mentions in this thread about Qualcomm having a license to Moto's patents bundled with the chip and that Moto pulled that license with regard to Apple or alternatively that Moto is trying to "double-dip", charging both Qualcomm and Apple for licensing. Not true.
To clear up the confusion, Moto's issues aren't with the chipset in Apple's most recent iPhone, the 4S. That chip carries a license via Qualcomm and isn't subject to any possible injunction under this particular action. The chipset that does not have licensing included is used in the older iPhone 4, 3GS and 3G whose chips came from Infineon.
Do we know why the Infineon chips were unlicensed (yes, I'm asking honestly)? Was it a case of Infineon deliberately manufacturing chips with no license agreement ever in place, or was it this talk we're hearing about Motorola trying to pull a license because they [Infineon] were selling to Apple specifically?
To kill the Google search engine, Apple would need to find a way to persuade people not to use it. And they actually have a very persuasive lady by the name of Siri... If Apple was to make Siri available for free to every computing device out there: PCs, laptops, smartphones, you name it, and have Siri use alternative search databases not named Google, it wouldn't take long before Google as a company will be left in the dust. I think the Google search engine is great, but the people behind it are a bunch of goons.
Consider this: At some point Apple's touch patents could potentially be deemed essential and included in a package of FRAND-encumbered patents by the same ETSI, no matter if Apple agrees or not. Would anyone's opinion of a fair royalty amount be different if it was Apple's IP being priced?
I believe Apple has to offer its patents as FRAND. Outside groups can't force them to do that. Besides, multitouch isn't essential on phones.
If Apple charges Moto $10 and HTC $5, then that wouldn't be fair. Moto can't charge Apple $15 and HTC $5 for example just because Apple makes most of the profits.
post #86, perhaps it is time to list your confict of interests.. i.e do you work for google or motorola? because the tone of voice of the post seems to suggest that you know more than you let on. (not to mention the debate rule #x, "never waver, that means you've lost" tactic. ).
I don't own Google stock, Apple stock, Motorola stock, nor any tech stock (other than some small amount of Qualcomm bought years ago). I have no inside sources, "special relationships" with any mobile provider, and derive no income from any of the players in smartphones or tablets. The closest I get is occasional beta-testing for gps devices or getting a rare pre-release press evaluation device from a company similar to Garmin or TomTom. Never a smartphone or tablet.
EDITTED to remove personal details posted earlier today
No one has shown my points to be wrong yet. Pehaps you're the one that can show Moto expects more from Apple than their other licensees?
Ugh, for crying out loud, NO ONE is saying Moto is discriminating against Apple. People are saying Moto is being *unfair* and *unreasonable*. They are starting down a path of taking a shotgun to the entire industry. First Apple, now Microsoft. They are fussing over a single patent *pledged* to a standards body in order to be incorporated into an industry standard. They chose to do that. These patents usually deserve a percentage royalty on the price of the *chip* not a $600 finished product.
If Moto wins this case, and gets anywhere close to what they're demanding, a dangerous precedent would be set. You know how many FRAND patents are used by any cellphone? What if other companies followed suit? Prices would go up.
Further, what is *reasonable* is not up to the patent holder; it is up to the courts.
Also, please learn the difference between FRAND patents and regular patents. FRAND patents give up much of the patent holder's rights as they are pledged in order to be incorporated into an industry standard.
I believe Apple has to offer its patents as FRAND. Outside groups can't force them to do that. Besides, multitouch isn't essential on phones.
Not true. At least in the EU, ETSI policies allow patents to be declared essential and legally required to be licensed even in the rare instance that a patent holder disagrees or resists being included in a standard.
You may not consider it fair and reasonable, and I may not either. That doesn't make it so in the eyes of any governing body. There's not currently any set method for determining the appropriate fee for a patent deemed essential. That's why Apple has asked the EU's European Telecommunications Standards Institute (ETSI) to establish some basic ground rules.
Well, there are plenty of basic ground rules established for standards and patents deemed FRAND as part of an open standard. That's why what Motorola is doing is not right -- they are acting against the rules of something they entered into.
No, what Apple will be interested in getting a ruling on, is ground rules concerning the prohibition of, and penalties for, some jealous company running to a judge with a load of specious arguments concerning a blatant case of a FRAND patent, and asking for and receiving an injunction against the sale of their competitor's product while the matter gets sorted out.
1) The patent they ran to the judge with was a FRAND patent, undisputed. On that basis alone, no injunction should be brought as a first measure. The burden of proof should be on the one bringing the case, as to why a special agreement needs to be reached in the case of this particular competitor; and failing every effort to secure a special licensing agreement if one is even required outside the standards group the patent is part of, why an injunction is necessary.
2) Motorola is one party of a group into which these patents have been pooled voluntarily. The whole point of the group and FRAND is that one party (in this case, a holder of 17 out of how many, 100's of patents in this standard) cannot hold up the process of standard adoption and hold someone ransom. That's why standards are adopted. They need to act as a group. The group could examine Moto's complaint, investigate a little, and tell Motorola to shut up. After all, everyone in the group has an interest in this.
Motorola should be fined for Apple's lost sales.
Motorola revokes the licenses of companies like Qualcomm, Infineon and Broadcom when they sell chips to Apple.
Other companies pay for the chips with the license fee paid based on the value of the chip.
Apple is being singled out for unfair and discriminatory treatment.
Source (pdf)
That alone should be enough to get Moto into big antitrust trouble.
Because it is supposed to be the same amount, not rate. And 2.25% of $100k in sales is a lot different than 2.25% of $100m
Where do the FRAND rules say the same total amount? It doesn't make sense that a company that makes 10,000 mobile phone would pay the same amount as a company that makes 100 million. It is clearly a percentage.
I've been trying to track this issue for some time. Basically, this guy Mueller sources about 110% of all the real information; if he doesn't report it, it goes unsaid. FossPatents.BlogSpot.Com. Read his conflict statement and be as careful as he is about separating fact & opinion ? you sound like the type who'll be able to do so, but this is a huge, complex area and it may not be easy.
On to your concerns that this sounds like people have their hair on fire: there were something like 1200 patents that went into the various pieces of the GSM standard; if you don't implement all, you don't have a GSM capable device. If each one is worth 2.25% of your product, you would have to pay about $18,000 on a $600 phone. See a possible case that 2.25% each might not be reasonable? Obviously, nobody is paying that. And the claim that the IP Moto gets from other GSM Musketeers (?all for one & one for all?) makes it fair still can't hold water. This is simply an attempt to lock Apple out of GSM telephones in Europe. Period.
The MPEG-LA deal is even stranger. You can go to their website and see their claim that THEY license AVC/h.264 as a pool. So why is Moto, which put its patents into the pool, trying to separately sue Microsoft over Windows 7, IE9, WMP and Xbox, when Microsoft is already a licensor of the patents? And why at a rate that is many times as much as MPEG-LA's claimed rate? Supposedly, when these firms all agreed to put their patents into a pool, they agreed to a split on the (very modest) licensing revenues, and a company that wants to implement it can sign one deal, not worrying about one individual such as Moto holding them up. I never saw a formal count of the h.264 patents, but scanning thru the list, with possible overlaps due to multiple countries, I'd guess 3,000 of 'em. Who is going to implement h.264 if they have to negotiate a separate deal for each, especially when a holdout can perform highway robbery?
The MPEG-LA deal has an explicit promise of FRAND, and it's totally bizarre that this can happen. I hope we'll hear them describe why anybody should ever trust them again. Maybe they only cover US licenses? I am not an expert here, just a hobbyist following the issue, but something makes zero sense.
The GSM deal has an even more interesting history. Moto was one of a handful of companies that invented the GSM standard with the intent of splitting up the business between 'em. You can Google & find some academic and industry papers that claim Moto was active in keeping Japanese competitors out of the European market, and slowing GSM's acceptance in other markets, for its purposes way back in the 90s. This appears to have been tolerated because the various government-owned telecoms wanted to promote the European businesses (Nokia, Ericcson, Alcatel, ..., look 'em up) and so turned a blind eye to blatant anti-trust actions. To get the GSM accepted around the world, the patent-holders went low-key on rights, but I don't think there's ANY formal commitment on the books to do anything Fair, Reasonable or Non-Discriminatory. (In this regard, I think Mr. Mueller has not paid enough attention to specific rules and contracts, relying too much on common sense and sound legal principles? in normal times, quite a plus, but not so much here, I fear.)
The one thing that this news DOES confirm is my suspicion last August that Motorola rushed Google into buying them by pulling the pin on a grenade of a huge patent kerfuffle against any & all. At the time, Jha and Icahn (CEO & biggest shareholder, respectively) said they were going after ?newcomers? in smartphones, which many took to mean the Android partners, to exploit their patent holdings. That would've killed Android, so Google paid whatever it had to ? fell on the grenade ? to shut up Moto.
Does the fact that Google offered NO assurances to the EU anti-trust regulators by today's deadline mean that they are going to let go of the deal, and Moto is free to make a mockery of Schmidt's ?bogus patents? claim? It's too bad that no real journalists have seriously picked up on this thread (only some lightweight stories quoting Mueller in Bloomberg, the WSJ, NYT and the Guardian) because it sure looks HUGE about the future of Android and the whole smartphone industry.
QFT.
Try 20-30 THOUSAND FRAND patents per device and you'd be closer to the mark.
I don't know the correct number. The above poster says 1,000. You say 20-30,000. I guessed 50. It's really irrelevant. At 2.25%, the license fee would be many times higher than the total cost of the device, so 2.25% can't be fair or reasonable.
I don't, which is why Mr. Mueller claiming 2.25% is fair, unfair, the right thing to do or whatever isn't my sole reference. Do I consider it "fair"? Not really.
There's a lot of the IP stuff that I personally don't consider fair. Or reasonable. I might feel differently if I had a horse in the race, but I don't.
For this discussion tho I'm not doing anything more that pointing out that Moto's royalty request is reported to be consistent, thus non-discriminatory, and there's no indications other than Mr. Muellers' (and of course Apple and MS) that 2.25% is unreasonable, and even he doesn't suggest it's illegally high. IMO some of the opinion and claims in the AI article aren't supported by the facts as they're currently known. That could change as the case moves thru the courts. For now I don't see that Moto is expecting anything from Apple that they haven't expected from other licensees. Do you?
What you're missing is that in addition to Mueller's word, we also have examples that he's cited stating that typical FRAND fees are orders of magnitude lower than Moto's demand. Not to mention the simple analysis above that 2.25% would be absolutely impossible since the license fees would be far greater than the cost of the device.
CLEARLY (to anyone but a paid Google shill), Moto's demand for 2.25% for a single patent is absurd.
Motorola revokes the licenses of companies like Qualcomm, Infineon and Broadcom when they sell chips to Apple.
Other companies pay for the chips with the license fee paid based on the value of the chip.
Apple is being singled out for unfair and discriminatory treatment.
C. Negotiations for Licensing between Apple and Motorola
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.
D. Motorola?s Termination of the Qualcomm License
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.
Source (pdf)
None of that sounds partially fair, reasonable and non-discrimoatory. Sounds like Apple has a strong case.
Ugh, for crying out loud, NO ONE is saying Moto is discriminating against Apple. . . .
The original article makes that exact claim of discrimination, even if others in the thread hadn't already insinuated that.
These patents usually deserve a percentage royalty on the price of the *chip* not a $600 finished product.
I don't necessarily disagree, but Apple already has a history of agreeing to royalties based on the total charge for the licensed device and not just a chipset. The royalty basis that Apple uses to pay Nokia is the first one that comes to mind. Royalties based on a percentage of the total device selling cost apparently aren't unusual.
EDIT: It seems even Apple agrees that royalty rates be tied to the total device price rather than specific chipsets or other included hardware. Apple' would just like that price to be based on the industry average selling price for a basic phone (or some other comparable device?) capable of using the standard rather than their specific product. The fact that Apple can make more on it's iPhone using the standard compared to an LG dumb-phone shouldn't matter in their view. Share the wealth isn't part of their equation. Can't say as I blame them.
http://www.scribd.com/doc/80899178/1...-ETSI-on-FRAND
If Moto wins this case, and gets anywhere close to what they're demanding, a dangerous precedent would be set. You know how many FRAND patents are used by any cellphone? What if other companies followed suit? Prices would go up.
Other companies with FRAND commitments were making demands along these lines before this spat with Apple occurred, and those claims from others will continue no matter what happens in this case IMHO.
Further, what is *reasonable* is not up to the patent holder; it is up to the courts.
It looks like as it now stands it's almost entirely up to the patent holder. That's why disagreements end up in court, not because courts are the ones setting the pricing. There are no legal standards set on how the value of a FRAND-pledged patent should be determined unless you have something to show that I haven't yet seen.
Also, please learn the difference between FRAND patents and regular patents. FRAND patents give up much of the patent holder's rights as they are pledged in order to be incorporated into an industry standard.
LOL!
I'm well aware of the difference.
for instance the story in the NYT yesterday about selling users' private search information for use by the very shady data aggregation industry.
I don't find this article. Anyone have a link?
Do we know why the Infineon chips were unlicensed (yes, I'm asking honestly)? Was it a case of Infineon deliberately manufacturing chips with no license agreement ever in place, or was it this talk we're hearing about Motorola trying to pull a license because they [Infineon] were selling to Apple specifically?
No I don't, and I've been searching. I find press announcements on Infineon being chosen to develop a 3G chip under a contract with Motorola and using Moto IP. Otherwise nothing yet.
http://www.infineon.com/cms/en/corpo...00709-091.html
Not true. At least in the EU, ETSI policies allow patents to be declared essential and legally required to be licensed even in the rare instance that a patent holder disagrees or resists being included in a standard.
You clearly don't understand basic logic. If a patent is required to implement a standard, the body may require FRAND terms for its licensing, but we're not talking about eminent domain of random patents into a pool.
Apple has FRAND licensed patents and offers a variety of FREE patents for certain uses, such as its gift of Canvas and the patents it uses to the worldwide web for use with HTML5.
Apple isn't seeking to gain its money from patent licensing. It makes its money selling real products. Motorola can't earn money selling smartphones, so it's resolved to become a patent troll.
How Motorola expects the world to let this fly is beyond belief. It's absurd. Motorola is demanding over $1 billion of Apple's iPhone revenues from last year, and a perpetual future royalty on products going forward. This is insane, particularly when comparing Apple's deal with Nokia.
It's pretty clear that Motorola has become a puppet of Google, and Google is desperately trying to make some money in the smartphone business given that it has made less than $1 in the last year from Android directly (more than half of its ad revenues estimated to reach $2.5 b were from iOS).
Look at the money, not the bs activation numbers. Google screwed the pooch and is desperately trying to remain relevant. Android is now an albatross given that Samsung (its only significant and successful licensee) is ready to strike out on its own. It's now a cash sink, the equivalent to Xbox in 2000, except it's not battling a feeble Sony but rather Apple and Microsoft.