I really wish Apple would make a search engine and some decent maps so I could vote with my feet and not use Google's products.
I set my search defaults to yahoo. Search seems to be similar. Maps? Use mapquest, or anybody have a good substitute for google maps? I don't want to use anything google anymore, besides, they are building profiles of you constantly which skeeves me out.
Look for the paragraph titled "Common Royalty Base". It's five paragraphs down.
I'll quote myself (which is a quote from the letter ):
Quote:
Originally Posted by GoodGrief
"This common base, as between two negotiating parties, should be no higher than the industry average sales price for a basic communications device that is capable of both voice and data communication."
Actually, battiato1981 is correct. The linked letter doesn't actually specify a "finished consumer product" (or any variation of wording thereof). It's typical non-committal quick-talk that can be spun however you need it do, depending on the situation. However, the way it reads, it appears that Apple is pushing for the lowest-cost basis for the royalty calculations, but with wording that makes it seem more palatable for major contributors to the patent pool, which suggests to me that the value of Apple's patents in the pool is/are relatively small. If so, it makes sense; Apple gets minimal value from their contributions, but maximum value for the other contributors IP assets. Apple makes their profits on product margins, not IP licensing, so that's just good business.
I'll quote myself (which is a quote from the letter ):
Actually, battiato1981 is correct. The linked letter doesn't actually specify a "finished consumer product" (or any variation of wording thereof).
Assuming you're licensing for use in a smartphone, what "device" do you think Apple is referring to as comparable for licensing purposes?
Going even more generic than that, what type of "communication device" could be used as a reference for royalty purposes that allows for both "voice and data" and makes use of the essential-patents package?
Not trying to be argumentative, but I think it's plainly clear that Apple is advocating a basic smartphone average price if the license is being granted for smartphone use. I doubt anyone would logically contrue it would be for something totally unrelated to a smartphone (or whatever device the patent set is licensed for).
Assuming you're licensing for use in a smartphone, what "device" do you think Apple is referring to.
Going even more generic than that, what type of "device" could be used as a reference for royalty purposes that allows for both "voice and data"?
Not trying to be argumentative, but I think it's plainly clear that Apple is advocating a basic smartphone if the license is being granted for smartphone use. I doubt anyone would logically contrue it would be for something totally unrelated to a smartphone (or whatever device the patent set is licensed for).
How can you be so certain that a radio chip isn't a 'device'?
More importantly, if Google really does think that 2.25% of the 'device' selling price is an appropriate royalty, they're dreaming. So they get 2.25% of a throwaway $100 phone or 2.25% of a $75,000 car - for licensing the same technology? Seems like someone has a strange concept of 'fair'.
How can you be so certain that a radio chip isn't a 'device'?
Is a radio chip in and of itself capable of being used as a communications device for both voice and data?
Quote:
Originally Posted by jragosta
More importantly, if Google really does think that 2.25% of the 'device' selling price is an appropriate royalty, they're dreaming. So they get 2.25% of a throwaway $100 phone or 2.25% of a $75,000 car - for licensing the same technology? Seems like someone has a strange concept of 'fair'.
If the technology is more valuable to you, why wouldn't it be fair as a businessman to ask for more? Serious question.
Secondly, it's not only Moto that licenses based on a percentage of the device cost. Apple is already paying royalties to Nokia on that basis, and even advocates that as a proper base for determining royalties themselves. According to FOSSPatents it's not uncommon. He only suggests that 2.25% across the board in all circumstances might be excessive.
Apple's advocated FRAND royalty price policies suggest the price be the average for a comparable base device rather than each specific device. For example Apple would suggest taking the average selling price for base/entry level mobile phones (not necessarily smartphones) that use the same licensed technology as an appropriate reference for negotiating a rate. In essence both Apple and Google agree that a completed device price should be the standard and not just a single chip. They just disagree on whether it should be the specific device granted the license or an average of several comparable devices from various sources.
I did that for you days ago when you suggested in another thread that no one knew if Apple was paying on-going royalties to Nokia (they are). I think you might be just giving me busy work.
If that's a real question just do a simple search for "Apple settles with Nokia". Lots in there that you've apparently missed, including the estimated 1% of iPhone sales revenue being paid to Nokia regularly during the term of the agreement.
Does anyone know how many FRAND patent licences (including cross-licensed ones) are required to sell a functional 3G mobile phone? 500 maybe? If they all required 2.25% of the selling price a manufacturer would have to pay out 1125% of the selling price of the phone in royalties!
Which is why Google looks so absolutely stupid backing away from this.
Though I suspect the answer is no I'll ask anyway. Does Google have a single hardware patent in their portfolio?
I did that for you days ago when you suggested in another thread that no one knew if Apple was paying on-going royalties to Nokia (they are). I think you might be just giving me busy work.
If that's a real question just do a simple search for "Apple settles with Nokia". Lots in there that you've apparently missed, including the estimated 1% of iPhone sales revenue being paid to Nokia regularly during the term of the agreement.
The estimate is entirely speculative. The terms of the agreement-- the initial cash payment, ongoing payment amounts, and the duration of those payments-- are all confidential. As are the specific technologies that were cross licensed, although in this case Apple did state publicly that while Nokia gained access to "some" of the iPhone's unique tech, it was by no means all or even most.
Doesn't really seem to have amounted to much, as Nokia is no longer in the software business.
The estimate is entirely speculative. The terms of the agreement-- the initial cash payment, ongoing payment amounts, and the duration of those payments-- are all confidential. As are the specific technologies that were cross licensed, although in this case Apple did state publicly that while Nokia gained access to "some" of the iPhone's unique tech, it was by no means all or even most.
Doesn't really seem to have amounted to much, as Nokia is no longer in the software business.
The specific's including the agreed on royalty percentage may be speculative, but the fact that on-going royalties are being paid based on iPhone sales is not. As for the length of time the agreement will be in place, I've never stated one, nor have I even seen a guess posted by anyone else.
As for whether a significant number of the patents that make the iPhone unique were licensed to Nokia, who knows. Apple would only say it wasn't the majority of them.
What I don't understand is how this all plays out in the end.
For instance, Moto are already saying that they'll extort a greater fee for their FRAND patents than others with the "only takes one bullet to kill". But what happens next?
1. Lets look at the 5th generation (eg after LTE/4G) - will any group want a Moto patent in a common design or standard if they know that Moto's terms are so much more than their own? Course they won't, so any future standard will got ahead without Moto.
(Can you imagine Apple putting anything in an open standard tomorrow that includes anything Google or Motorola put in? Nope. Microsoft, Cisco and a bunch of others won't either).
2. What happens when Moto/Google want to use a common patent in the future? Can you imagine Apple/Microsoft/Cisco IP offices? Will it be a "hell no" or a "we want 50%". Moto make set top boxes for instance, will Apple/MS/Cisco be checking through the patent agreements they have with Moto? You betcha.
So overall, in the short term this could be a very profitable venture for Moto/Goog, but over the medium this could be absolutely disastrous.
ISTM that different patents are worth different amounts. 2.25% may be high for some patents and low for others.
Think about, for example, a new type of memory card. One company might contribute a patent for the basic new memory type, and another might have a patent for innovative packaging. Both might be revolutionary, new and better. In combo, there might be potential to change the entire memory card market.
A third company might have some nifty software stuff to contribute. Stuff that should be part of the standard, but at the same time, stuff that any competent software company could have written, had they been working alongside the first two companies.
ISTM that while all 3 would be essential to companies licensing the tech and making memory cards, the first two patents might be worth vastly more than the third.
Your hypothetical example is rather quaint in that it involves only 3 patents. You are aware that to make a standards-compliant mobile phone, you are necessarily going to be implementing technology from literally thousands of patents, all of which need to be licensed? (I found this document that lists all of the patents involved in the W-CDMA standard; remember this is for W-CDMA only and doesn't cover 1G, 2G or 2.5G stuff).
This being the case a royalty rate of 2.25% for a single patent (that's what's MOT is demanding, not 2.25% to licence their whole portfolio) would have to be exceptionally high relative to the cost of most of the patents, otherwise the total royalty rate would easily far exceed 100% of a unit's selling price.
Further, one may argue that whilst from a technical perspective it may be possible to judge one patent to be "more important" than another, the fact of the matter is that all patented techniques involved in a standard must, by definition, be implemented in a device in order for that device to be standards-compliant. As such, all patents are equally important - failure to implement any one results in failing to comply to the standard. From this perspective it is very difficult to argue that any one patent should command a significantly higher royalty rate than any other.
A 2.25% royalty rate for a supposedly "FRAND" licensed patent is completely unjustifiable.
The specific's including the agreed on royalty percentage may be speculative, but the fact that on-going royalties are being paid based on iPhone sales is not. As for the length of time the agreement will be in place, I've never stated one, nor have I even seen a guess posted by anyone else.
As for whether a significant number of the patents that make the iPhone unique were licensed to Nokia, who knows. Apple would only say it wasn't the majority of them.
Well, since we don't know the time frame for all we know it's already expired. Is is shortly to expire. maybe it was a year. Maybe it was 6 months, or 10 years.
I would guess towards the shorter end, however, since the tech tends to date pretty rapidly and current iPhones may not even use the contested IP.
2. What happens when Moto/Google want to use a common patent in the future? Can you imagine Apple/Microsoft/Cisco IP offices? Will it be a "hell no" or a "we want 50%". Moto make set top boxes for instance, will Apple/MS/Cisco be checking through the patent agreements they have with Moto? You betcha.
So overall, in the short term this could be a very profitable venture for Moto/Goog, but over the medium this could be absolutely disastrous.
IMO, the whole purpose of Google holding steady to Moto's 2.25% of the device cost as a royalty is to break the lawsuit cycle and force a cross-licensing agreement with Apple and MS. It's not about the patent revenue at all. It's about getting MS Apple and Google to all sit down and work out an equitable arrangement where they can all have a chance of success in the mobile market rather than trying to shoot one another with loaded patents. They're all more successful using IP and products that each can bring to the table.
Well, since we don't know the time frame for all we know it's already expired. Is is shortly to expire. maybe it was a year. Maybe it was 6 months, or 10 years.
I would guess towards the shorter end, however, since the tech tends to date pretty rapidly and current iPhones may not even use the contested IP.
My personal guess would be on the longer side, perhaps 5 years or more. Some of the portfolio that Nokia licensed to Apple was considered essential, and those packages take some time before they're no longer pertinent. I doubt Apple wants to go thru this again before the standards are clearly changed. Really Apple probably knows they were getting off cheap so no need to go for a short-term deal. That's my opinion anyway.
IMO, the whole purpose of Google holding steady to Moto's 2.25% of the device cost as a royalty is to break the lawsuit cycle and force a cross-licensing agreement with Apple and MS. It's not about the patent revenue at all. It's about getting MS Apple and Google to all sit down and work out an equitable arrangement where they can all have a chance of success in the mobile market rather than trying to shoot one another with loaded patents. They're all more successful using IP and products that each can bring to the table.
Is that because Google are too lazy to do it in the correct way, i.e. STOP COPYING THEIR STUFF AND COME UP WITH THEIR OWN WORK.
Comments
I really wish Apple would make a search engine and some decent maps so I could vote with my feet and not use Google's products.
I set my search defaults to yahoo. Search seems to be similar. Maps? Use mapquest, or anybody have a good substitute for google maps? I don't want to use anything google anymore, besides, they are building profiles of you constantly which skeeves me out.
Then you didn't read it all.
Look for the paragraph titled "Common Royalty Base". It's five paragraphs down.
I'll quote myself (which is a quote from the letter
"This common base, as between two negotiating parties, should be no higher than the industry average sales price for a basic communications device that is capable of both voice and data communication."
Actually, battiato1981 is correct. The linked letter doesn't actually specify a "finished consumer product" (or any variation of wording thereof). It's typical non-committal quick-talk that can be spun however you need it do, depending on the situation. However, the way it reads, it appears that Apple is pushing for the lowest-cost basis for the royalty calculations, but with wording that makes it seem more palatable for major contributors to the patent pool, which suggests to me that the value of Apple's patents in the pool is/are relatively small. If so, it makes sense; Apple gets minimal value from their contributions, but maximum value for the other contributors IP assets. Apple makes their profits on product margins, not IP licensing, so that's just good business.
I'll quote myself (which is a quote from the letter
Actually, battiato1981 is correct. The linked letter doesn't actually specify a "finished consumer product" (or any variation of wording thereof).
Assuming you're licensing for use in a smartphone, what "device" do you think Apple is referring to as comparable for licensing purposes?
Going even more generic than that, what type of "communication device" could be used as a reference for royalty purposes that allows for both "voice and data" and makes use of the essential-patents package?
Not trying to be argumentative, but I think it's plainly clear that Apple is advocating a basic smartphone average price if the license is being granted for smartphone use. I doubt anyone would logically contrue it would be for something totally unrelated to a smartphone (or whatever device the patent set is licensed for).
Assuming you're licensing for use in a smartphone, what "device" do you think Apple is referring to.
Going even more generic than that, what type of "device" could be used as a reference for royalty purposes that allows for both "voice and data"?
Not trying to be argumentative, but I think it's plainly clear that Apple is advocating a basic smartphone if the license is being granted for smartphone use. I doubt anyone would logically contrue it would be for something totally unrelated to a smartphone (or whatever device the patent set is licensed for).
How can you be so certain that a radio chip isn't a 'device'?
More importantly, if Google really does think that 2.25% of the 'device' selling price is an appropriate royalty, they're dreaming. So they get 2.25% of a throwaway $100 phone or 2.25% of a $75,000 car - for licensing the same technology? Seems like someone has a strange concept of 'fair'.
How can you be so certain that a radio chip isn't a 'device'?
Is a radio chip in and of itself capable of being used as a communications device for both voice and data?
More importantly, if Google really does think that 2.25% of the 'device' selling price is an appropriate royalty, they're dreaming. So they get 2.25% of a throwaway $100 phone or 2.25% of a $75,000 car - for licensing the same technology? Seems like someone has a strange concept of 'fair'.
If the technology is more valuable to you, why wouldn't it be fair as a businessman to ask for more? Serious question.
Secondly, it's not only Moto that licenses based on a percentage of the device cost. Apple is already paying royalties to Nokia on that basis, and even advocates that as a proper base for determining royalties themselves. According to FOSSPatents it's not uncommon. He only suggests that 2.25% across the board in all circumstances might be excessive.
Apple's advocated FRAND royalty price policies suggest the price be the average for a comparable base device rather than each specific device. For example Apple would suggest taking the average selling price for base/entry level mobile phones (not necessarily smartphones) that use the same licensed technology as an appropriate reference for negotiating a rate. In essence both Apple and Google agree that a completed device price should be the standard and not just a single chip. They just disagree on whether it should be the specific device granted the license or an average of several comparable devices from various sources.
What happened to "Don't Be Evil"?
Hiding with"Think Different" I guess.
Apple is already paying royalties to Nokia on that basis,.
Please provide a link to verify this claim.
If that's a real question just do a simple search for "Apple settles with Nokia". Lots in there that you've apparently missed, including the estimated 1% of iPhone sales revenue being paid to Nokia regularly during the term of the agreement.
Does anyone know how many FRAND patent licences (including cross-licensed ones) are required to sell a functional 3G mobile phone? 500 maybe? If they all required 2.25% of the selling price a manufacturer would have to pay out 1125% of the selling price of the phone in royalties!
Which is why Google looks so absolutely stupid backing away from this.
Though I suspect the answer is no I'll ask anyway. Does Google have a single hardware patent in their portfolio?
I did that for you days ago when you suggested in another thread that no one knew if Apple was paying on-going royalties to Nokia (they are). I think you might be just giving me busy work.
If that's a real question just do a simple search for "Apple settles with Nokia". Lots in there that you've apparently missed, including the estimated 1% of iPhone sales revenue being paid to Nokia regularly during the term of the agreement.
The estimate is entirely speculative. The terms of the agreement-- the initial cash payment, ongoing payment amounts, and the duration of those payments-- are all confidential. As are the specific technologies that were cross licensed, although in this case Apple did state publicly that while Nokia gained access to "some" of the iPhone's unique tech, it was by no means all or even most.
Doesn't really seem to have amounted to much, as Nokia is no longer in the software business.
The estimate is entirely speculative. The terms of the agreement-- the initial cash payment, ongoing payment amounts, and the duration of those payments-- are all confidential. As are the specific technologies that were cross licensed, although in this case Apple did state publicly that while Nokia gained access to "some" of the iPhone's unique tech, it was by no means all or even most.
Doesn't really seem to have amounted to much, as Nokia is no longer in the software business.
The specific's including the agreed on royalty percentage may be speculative, but the fact that on-going royalties are being paid based on iPhone sales is not. As for the length of time the agreement will be in place, I've never stated one, nor have I even seen a guess posted by anyone else.
As for whether a significant number of the patents that make the iPhone unique were licensed to Nokia, who knows. Apple would only say it wasn't the majority of them.
What happened to "Don't Be Evil"?
It was murdered.
What I don't understand is how this all plays out in the end.
For instance, Moto are already saying that they'll extort a greater fee for their FRAND patents than others with the "only takes one bullet to kill". But what happens next?
1. Lets look at the 5th generation (eg after LTE/4G) - will any group want a Moto patent in a common design or standard if they know that Moto's terms are so much more than their own? Course they won't, so any future standard will got ahead without Moto.
(Can you imagine Apple putting anything in an open standard tomorrow that includes anything Google or Motorola put in? Nope. Microsoft, Cisco and a bunch of others won't either).
2. What happens when Moto/Google want to use a common patent in the future? Can you imagine Apple/Microsoft/Cisco IP offices? Will it be a "hell no" or a "we want 50%". Moto make set top boxes for instance, will Apple/MS/Cisco be checking through the patent agreements they have with Moto? You betcha.
So overall, in the short term this could be a very profitable venture for Moto/Goog, but over the medium this could be absolutely disastrous.
ISTM that different patents are worth different amounts. 2.25% may be high for some patents and low for others.
Think about, for example, a new type of memory card. One company might contribute a patent for the basic new memory type, and another might have a patent for innovative packaging. Both might be revolutionary, new and better. In combo, there might be potential to change the entire memory card market.
A third company might have some nifty software stuff to contribute. Stuff that should be part of the standard, but at the same time, stuff that any competent software company could have written, had they been working alongside the first two companies.
ISTM that while all 3 would be essential to companies licensing the tech and making memory cards, the first two patents might be worth vastly more than the third.
Your hypothetical example is rather quaint in that it involves only 3 patents. You are aware that to make a standards-compliant mobile phone, you are necessarily going to be implementing technology from literally thousands of patents, all of which need to be licensed? (I found this document that lists all of the patents involved in the W-CDMA standard; remember this is for W-CDMA only and doesn't cover 1G, 2G or 2.5G stuff).
This being the case a royalty rate of 2.25% for a single patent (that's what's MOT is demanding, not 2.25% to licence their whole portfolio) would have to be exceptionally high relative to the cost of most of the patents, otherwise the total royalty rate would easily far exceed 100% of a unit's selling price.
Further, one may argue that whilst from a technical perspective it may be possible to judge one patent to be "more important" than another, the fact of the matter is that all patented techniques involved in a standard must, by definition, be implemented in a device in order for that device to be standards-compliant. As such, all patents are equally important - failure to implement any one results in failing to comply to the standard. From this perspective it is very difficult to argue that any one patent should command a significantly higher royalty rate than any other.
A 2.25% royalty rate for a supposedly "FRAND" licensed patent is completely unjustifiable.
The specific's including the agreed on royalty percentage may be speculative, but the fact that on-going royalties are being paid based on iPhone sales is not. As for the length of time the agreement will be in place, I've never stated one, nor have I even seen a guess posted by anyone else.
As for whether a significant number of the patents that make the iPhone unique were licensed to Nokia, who knows. Apple would only say it wasn't the majority of them.
Well, since we don't know the time frame for all we know it's already expired. Is is shortly to expire. maybe it was a year. Maybe it was 6 months, or 10 years.
I would guess towards the shorter end, however, since the tech tends to date pretty rapidly and current iPhones may not even use the contested IP.
2. What happens when Moto/Google want to use a common patent in the future? Can you imagine Apple/Microsoft/Cisco IP offices? Will it be a "hell no" or a "we want 50%". Moto make set top boxes for instance, will Apple/MS/Cisco be checking through the patent agreements they have with Moto? You betcha.
So overall, in the short term this could be a very profitable venture for Moto/Goog, but over the medium this could be absolutely disastrous.
IMO, the whole purpose of Google holding steady to Moto's 2.25% of the device cost as a royalty is to break the lawsuit cycle and force a cross-licensing agreement with Apple and MS. It's not about the patent revenue at all. It's about getting MS Apple and Google to all sit down and work out an equitable arrangement where they can all have a chance of success in the mobile market rather than trying to shoot one another with loaded patents. They're all more successful using IP and products that each can bring to the table.
Well, since we don't know the time frame for all we know it's already expired. Is is shortly to expire. maybe it was a year. Maybe it was 6 months, or 10 years.
I would guess towards the shorter end, however, since the tech tends to date pretty rapidly and current iPhones may not even use the contested IP.
My personal guess would be on the longer side, perhaps 5 years or more. Some of the portfolio that Nokia licensed to Apple was considered essential, and those packages take some time before they're no longer pertinent. I doubt Apple wants to go thru this again before the standards are clearly changed. Really Apple probably knows they were getting off cheap so no need to go for a short-term deal. That's my opinion anyway.
Though I suspect the answer is no I'll ask anyway. Does Google have a single hardware patent in their portfolio?
My guess is that there are hundreds of them. A really quick Google search found this reference.
http://www.seobythesea.com/2011/09/g...land-research/
and this one:
http://www.mediapost.com/publication...-on-hardw.html
Google currently controls several thousand patents, and that doesn't include any of the 17K plus in Motorola's portfolio.
IMO, the whole purpose of Google holding steady to Moto's 2.25% of the device cost as a royalty is to break the lawsuit cycle and force a cross-licensing agreement with Apple and MS. It's not about the patent revenue at all. It's about getting MS Apple and Google to all sit down and work out an equitable arrangement where they can all have a chance of success in the mobile market rather than trying to shoot one another with loaded patents. They're all more successful using IP and products that each can bring to the table.
Is that because Google are too lazy to do it in the correct way, i.e. STOP COPYING THEIR STUFF AND COME UP WITH THEIR OWN WORK.
See, it's really quite simple.