German taxpayers will pay millions to enforce Motorola's patents against Apple
Taxpayers in Germany's federal state of Baden-Wurttemberg are set to pay out "several million euros" to Motorola due to its enforcement of two patents against Apple.
The cost to locals, explained by Florian Mueller of FOSS Patents, comes from the fact that Germany must pay interest on funds that Motorola Mobility was required to pay under local laws. The interest will amount to millions of euros if the ongoing patent infringement dispute between Motorola and Apple isn't settled "very soon," he said.
Motorola was legally bound to make the deposits because it is enforcing an injunction granted by the Mannheim Regional Court while an appeal is still ongoing in the Karlsruhe Higher Regional Court.
The government collects the security deposit for injunctions to cover potential damages if the injunction is later revoked. The Mannheim regional court ordered two injunctions against Apple, and determined that each required a 100 million euro deposit.
"Germany owes Motorola interest that will be paid out when the deposit is withdrawn, such as after a settlement or a final ruling, but due to rules that the government has to abide, it can't invest those funds in ways that would generate (or save) interest income," Mueller explained.
The interest rate on any deposits is dictated by state law. Mueller calculated that just one of Motorola's deposits, with an interest rate of 1 percent, will cost the government 1 million euros per year.
"We're now talking about a couple of deposits of that kind, and the appellate proceeding may easily take two years," he explained. "In that case, we're talking about several million euros (and an even higher figure if converted to U.S. dollars)."
Motorola originally filed the suit last April against Apple's MobileMe service. After iCloud was announced, Motorola argued in court that MobileMe is "integrated" into the new product and should be included.
The courts sided with Motorola, and forced Apple to disable push notifications for iCloud and MobileMe users in Germany. The serves will remain disabled until the appeals process concludes, unless Motorola and Apple can broker a deal before then.
A week ago, the Mannheim Regional Court opted to uphold the injunction on iCloud and MobileMe services. The court also determined that Apple must pay damages in the suit, though no amount was specified.
The cost to locals, explained by Florian Mueller of FOSS Patents, comes from the fact that Germany must pay interest on funds that Motorola Mobility was required to pay under local laws. The interest will amount to millions of euros if the ongoing patent infringement dispute between Motorola and Apple isn't settled "very soon," he said.
Motorola was legally bound to make the deposits because it is enforcing an injunction granted by the Mannheim Regional Court while an appeal is still ongoing in the Karlsruhe Higher Regional Court.
The government collects the security deposit for injunctions to cover potential damages if the injunction is later revoked. The Mannheim regional court ordered two injunctions against Apple, and determined that each required a 100 million euro deposit.
"Germany owes Motorola interest that will be paid out when the deposit is withdrawn, such as after a settlement or a final ruling, but due to rules that the government has to abide, it can't invest those funds in ways that would generate (or save) interest income," Mueller explained.
The interest rate on any deposits is dictated by state law. Mueller calculated that just one of Motorola's deposits, with an interest rate of 1 percent, will cost the government 1 million euros per year.
"We're now talking about a couple of deposits of that kind, and the appellate proceeding may easily take two years," he explained. "In that case, we're talking about several million euros (and an even higher figure if converted to U.S. dollars)."
Motorola originally filed the suit last April against Apple's MobileMe service. After iCloud was announced, Motorola argued in court that MobileMe is "integrated" into the new product and should be included.
The courts sided with Motorola, and forced Apple to disable push notifications for iCloud and MobileMe users in Germany. The serves will remain disabled until the appeals process concludes, unless Motorola and Apple can broker a deal before then.
A week ago, the Mannheim Regional Court opted to uphold the injunction on iCloud and MobileMe services. The court also determined that Apple must pay damages in the suit, though no amount was specified.
Comments
I bet the taxpayers will be delighted to hear this great news.
Why is this any different then when Apple is suing everyone? Or when they are having government agents raid homes to get their lost goods?
Chalk this up to another fanboy "news" entry on AI
Quote:
Originally Posted by jnoel
Why is this any different then when Apple is suing everyone? Or when they are having government agents raid homes to get their lost goods?
Chalk this up to another fanboy "news" entry on AI
What on earth makes this fanboy "news?" If Apple loses in the end and Motorola is due money from the German government it will be Apple's fault because they were the infringing party. In what possible world is reporting that Apple fanboyism?
The level of reporting on this site is truly appalling. This is not news worthy, it's not even news. The government of Germany (or the state in this instance) is making money off Motorola and everyone else. They have to pay a measly 1% interest to these guys - they'll be getting at least 3% on the money while it's in their care though. They are making millions, not paying millions.
Quote:
Originally Posted by Hutcho
The level of reporting on this site is truly appalling. This is not news worthy, it's not even news. The government of Germany (or the state in this instance) is making money off Motorola and everyone else. They have to pay a measly 1% interest to these guys - they'll be getting at least 3% on the money while it's in their care though. They are making millions, not paying millions.
The article says that the government isn't allowed to invest the money (even in an interest bearing account) due to local laws. Therefore they won't make any % on it and will only lose money in the end, which is the point of the article...
GregInPrague sez:
Quote:
What on earth makes this fanboy "news?" If Apple loses in the end and Motorola is due money from the German government it will be Apple's fault because they were the infringing party. In what possible world is reporting that Apple fanboyism?
Correct. As many people here are AAPL shareholders, we want to hear about both positive and negative news.
(...and on a side note, I tried to reply to GregInPrague's post, quoting him, and the new "tools" here didn't create the quote. I had to go back and manually add it. I'm using Safari on OSX.)
This makes you wonder if the German government have thought the suit through, as it practically gives Motorola carte blanche to the pockets of its citizens.
It is still a "Deposit" - they can use the money for other things. They basically got a 300 million account.
Just because they can not "Invest it" one way does not mean it sits in a room. There are many ways a local government can use cash deposits.
Having read the law linked in the original post, I cannot find any reason to assume that the state won't earn any interest on these deposits. In fact §1 says that funds will be put into the main treasury of the state and §11 says that any legal currency will become property of the state.
Quote:
§ 1
Hinterlegungsstellen, Hinterlegungskasse
(1) Die Hinterlegungsgeschäfte werden von Hinterlegungsstellen und Hinterlegungskassen wahrgenommen.
(2) Hinterlegungsstelle ist das Amtsgericht.
(3) Hinterlegungskasse ist die Landesoberkasse Baden-Württemberg.
[...]
§ 11
Zahlungsmittel
(1) Gesetzliche und gesetzlich zugelassene Zahlungsmittel gehen in das Eigentum des Landes über.
So why wouldn't they be able to work with that money while they have it?
Another thing I don't understand is why this wouldn't fall under court costs, payable by the loosing side?
Quote:
Originally Posted by JustMeToby
Having read the law linked in the original post, I cannot find any reason to assume that the state won't earn any interest on these deposits. In fact §1 says that funds will be put into the main treasury of the state and §11 says that any legal currency will become property of the state.
So why wouldn't they be able to work with that money while they have it?
Another thing I don't understand is why this wouldn't fall under court costs, payable by the loosing side?
I would fully expect that if Apple loses, it would be Apple's responsibility to pay. I don't have the law (and my German is poor enough that I probably wouldn't understand it even if I had it), but there are a couple of scenarios:
1. Apple would have to reimburse the state for the interest.
2. Apple would have to reimburse Motorola in lieu of interest (the law would probably have to allow for that).
As you said, if the money is to be put into the main treasury, then it will be earning interest and the whole issue is moot, anyway.
Go on Apple, stop costing the German taxpayer thanks to your theft of others I.P.
#itcanbespunbothways.
The German government should use that money to buy Apple stock. I'm sure it will do better than the 1% interest they have to pay.
Quote:
Originally Posted by GregInPrague
What on earth makes this fanboy "news?" If Apple loses in the end and Motorola is due money from the German government it will be Apple's fault because they were the infringing party. In what possible world is reporting that Apple fanboyism?
Turn the bottle around.
AI would not have reported this side of the story with German taxpayers footing the bill if Motorola lost and Apple won, which would make German taxpayers helping Apple.
THAT is what you fail to see.
Therefore, this is one of the prime examples of fanboy news.
I'm an AAPL shareholder just to make things clear for you.
Just want to make sure I'm understanding you clearly.
Quote:
Originally Posted by GadgetCanada
The German government should use that money to buy Apple stock. I'm sure it will do better than the 1% interest they have to pay.
Apple stock is down over 11% from its peak on April 10. Don't be so sure.
I don't know if this is common practice, but per the article, the company is required to make a deposit on the injunction (assuming it's upheld). But by law, the government is required to run the funds WITH interest if the injunction is stayed. I guess I'm surprised the interest isn't due by the party filing the injunction case to begin with?!
Because taxpayers thus have to pay the interest, it's a huge penalty on the people of the municipality where the court is located, and thus I would think an incentive for the courts to move faster to end their imposed costs, and perhaps rule in favor of the plaintiff so the interest doesn't have to be paid out!!!
Quote:
Originally Posted by GregInPrague
So Galbi, AI is Fanboy News in real life because of what you think they wouldn't report on in a hypothetical alternate universe where Apple and Motorola's roles were switched?
Just want to make sure I'm understanding you clearly.
While I wouldn't go so far as to call it "fanboy news," I will say that the title is misleading. It implies that Motorola is extorting money from the citizens of German for their own interest, when in fact all they're doing is following German law.
German law requires Motorola to pay the deposit. They complied. German law requires that the deposit be paid back with interest (should Motorola win); Motorola didn't demand it.
I'm not sure I ever read such an idiotic and biased article.
As if the German taxpayer would pay for a patent dispute between 2 companies.