Apple - Just buy Ericsson and fire all the management.
It certainly makes one wonder if that might be cheaper sometimes. If not that, how about a hostile takeover or buying a majority stake in that company.
As I recall there was a lot of (undue) pressure from more than one whacked out judge to settle these things. (BTW: I strongly disagree with the tactics that a couple of US Federal Judges have taken about scope of the law suits and feel that at least one is due to be censured for her uncalled for behavior to narrow this down.) I never said "Steve Jobs would have listened to accountants ... to save a few bucks" but when you get down to it that is one of the kind of decisions a CEO ends up making for the company they are steering. We have zero input from the Apple board members one way or another except that he never got a no confidence vote.
Again we find ourselves flogging a dead horse only to go nowhere. Believe what you like.
One point I feel compelled to point out is that he loved and was proud of the iPhone and this accomplishment. I remember him quite well saying so but not that he was dang proud of those patents (boy have we patented it).
I think that the Courts are still working their way through this to the new jurisprudence so while I'm not sure which Judge you are referring to, there are more than a few that need some "re-education".
As an aside, and referring to some unnamed click bait websites (cough: BGR) stop using "gorgeous" to describe every frickin new smartphone that comes out. It's overused and more importantly, these descriptions aren't even appropriate; the public appetite allows few smartphone to even reach classic status within their lifetimes, let alone the upgrade cycle (though I would admit my prejudice that the iPhone 4/4s has achieved that status).
I am not sure how the reference to "gorgeous" worked its way in but I never used the word in this thread (or any other that I can remember).
I am not sure how the reference to "gorgeous" worked its way in but I never used the word in this thread (or any other that I can remember).
You didn't, and that's why I noted it as an "aside".
I just previously finished reading a post on BGR and I decided to throw it out there. You weren't the cause nor was I targeting you. Just merely pointing out media frenzy for (nearly) every new device.
I meant that Motorola tried to extract more money out of Apple than they were charging others for the same IP. I know on good authority Apple made a nice offer to settle with Motorola on those patents prior to google buying them and Sanjay turned them down since he wanted Apple to cross license all the iphone GUI as part of the deal.
Motorola is the only company which Apple never paid FRAND licensing on the cell phone patents which they were using. They paid Nokia, Ericisson, and even MS, but Motorola never got a dime at least not until Google sold them to Lenovo.
It now appears that Ericisson want a much larger piece of the pie if what we are reading it correct. Ericisson is so confident in thier position they sueing in TX, Motorola sue Apple in IL their home ground and lost.
I meant that Motorola tried to extract more money out of Apple than they were charging others for the same IP. I know on good authority Apple made a nice offer to settle with Motorola on those patents prior to google buying them and Sanjay turned them down since he wanted Apple to cross license all the iphone GUI as part of the deal.
Motorola is the only company which Apple never paid FRAND licensing on the cell phone patents which they were using. They paid Nokia, Ericisson, and even MS, but Motorola never got a dime at least not until Google sold them to Lenovo.
It now appears that Ericisson want a much larger piece of the pie if what we are reading it correct. Ericisson is so confident in thier position they sueing in TX, Motorola sue Apple in IL their home ground and lost.
In case you need a refresher on what happened and why.
Uhm, what is your point. That an opinion of one of the jurists was that Motorola should be allowed to make a case for injunctive relief as Apple was a "hold-out" or that another justice determined that damages could always be added if in fact Apple was a "hold out", because there was no pressing need for an injunction of FRAND'ed IP.
Motorola's injunction problem was different, because it had agreed in its participation with the UMTS standards group that it would license its technology on fair, reasonable and nondiscriminatory (FRAND) terms.
When a standard-essential patent (SEP) holder offers a license on terms higher than it could have gotten before the standard was set, it is accused of “hold up” in seeking more than the fair value of the technology. Conversely, if a prospective licensee refuses to negotiate a royalty rate, knowing that it will be difficult for the SEP owner to get an injunction, the alleged infringer is accused of “hold out.”
“The record in this case shows evidence that Apple may have been a hold out.”Chief Judge Randall R. Rader, in dissent
The court's opinion accused Posner of setting a per se rule that an SEP owner could never get an injunction, though Prost's opinion said that was a mischaracterization. In any case, the court refused to say that there should be special rules for the injunction analysis when an SEP is involved. Instead, it placed the question of whether hold-up or hold-out exists properly within the eBay framework, and none of the panel members objected to that. However, they disagreed on how the negotiations so far between these two parties should be factored into that framework here.
Motorola offered a license to Apple and Apple refused the initial offer. According to the majority opinion, Motorola “has agreed to add as many market participants as are willing to pay a FRAND royalty,” and “negotiations [with Apple] have been ongoing.” Under eBay then, according to the majority, the lack of irreparable harm to Motorola is controlling, so the court affirmed summary judgment of no injunction for Motorola.
Chief Judge Rader's dissent, on the other hand, said, “The record in this case shows evidence that Apple may have been a hold out.” Since that determination would come from a factual inquiry necessary to a proper eBay analysis, he said, this issue should be remanded to allow Motorola to prove Apple's hold out.
Prost joined the majority on this issue, but she discounted any negotiations to date, saying that the lower court could simply increase damages when “an infringer previously engaged in bad faith negotiations.” She proposed that monetary damages would be inadequate only where the alleged infringer could not or would not pay a court-order damages award, which was not relevant here."
You might remember that Samsung was getting sued for copying Apple's UI, and Ericsson is providing RF IP that is embedded in a device that can be sold as a smallest saleable unit, an electronic component. Now it might be that there is more IP in play than RF technology, but since I don't know the details, I'll speculate like everyone else that Apple is negotiating basis, and also attempting to invalidate some IP. All of this is quite ordinary in negotiations, as is Ericsson's response; business as usual.
So, as I noted previously; is a smartphone a computer or a communication device?
Look at the iPhone without its SIM card. It's completely usable as a communication device via WiFi, which is provided via a Broadcom chip. Would you notice any difference other that a loss in mobility? Sure, cellular communication is important, but it says that the basis shouldn't be the iPhone price.
It's possible to operate a few things on the iPhone without the UI, sound volume as an example, but everything else must be accessed through the UI, and Apple has generated it growth primarily on the application of its UI on a number of different devices. The fact that Apple sells the iPad models with and without cellular communication is telling; it's a $130.00 and of course th
Should Ericsson's basis for the iPhone be some fraction of the $130.00? Probably, but decidedly not of the entire iPhone cost.
@tmay : Apple's home court awarded Apple for "three design patents claiming the rectangular shape, rounded corners, translucent screen, and colorful icons common to smartphones," three utility patents (two of which are now invalid), and two trade dress dilution claims. The UI design/utility patents are part of the underlying OS component which is given away for "free." So why should we apply one patent rules (ie, awarding infringer's entire profit to Apple) designed to deal with few-component product likes furnitures in Samsung's case, but another that evolved to deal with modern multicomponent products like smartphones in Ericsson's case?
Sure, if you remove the SIM card from your iPhone and strip away all cellular functionality, you essentially end up with with a iPod Touch.
It's no longer a phone, whereas the iPad with or without a SIM card or cellular functionality is still a tablet. The iPhone costs about 150% to 300% more than similarly configured iPod Touch and, based Apple's own pricing strategy, the cellular tech adds significant value to the iPhone. Whereas for the iPad, the price differential is much smaller, but the demand for the iPad cellular is also much smaller (less than 10% of all iPad sales in 2012). In another word, do cellular techs drive demand for the iPhone? The answer here is Yes.
I also believe some appropriate apportionment and market demand analysis should be applied in all multicomponent technology cases -- and many recent court cases and policy statements from a few SSO's (IEEE) seem to affirm this, -- but that's apparently not what Apple believes in. It's absurd to say that three UI elements adds market demand and values so significant that all their profits on infringed Samsung devices taken away, while Ericsson's cellular patents diminished to a small percentage of a baseband. I'm pretty sure the Federal Circuit will reverse Apple's win in Samsung's case, but I also believe that Apple's royalty basis argument is very weak.
@tmay : Apple's home court awarded Apple for "three design patents claiming the rectangular shape, rounded corners, translucent screen, and colorful icons common to smartphones," three utility patents (two of which are now invalid), and two trade dress dilution claims. The UI design/utility patents are part of the underlying OS component which is given away for "free." So why should we apply one patent rules (ie, awarding infringer's entire profit to Apple) designed to deal with few-component product likes furnitures in Samsung's case, but another that evolved to deal with modern multicomponent products like smartphones in Ericsson's case?
Sure, if you remove the SIM card from your iPhone and strip away all cellular functionality, you essentially end up with with a iPod Touch.
It's no longer a phone, whereas the iPad with or without a SIM card or cellular functionality is still a tablet. The iPhone costs about 150% to 300% more than similarly configured iPod Touch and, based Apple's own pricing strategy, the cellular tech adds significant value to the iPhone. Whereas for the iPad, the price differential is much smaller, but the demand for the iPad cellular is also much smaller (less than 10% of all iPad sales in 2012). In another word, do cellular techs drive demand for the iPhone? The answer here is Yes.
I also believe some appropriate apportionment and market demand analysis should be applied in all multicomponent technology cases -- and many recent court cases and policy statements from a few SSO's (IEEE) seem to affirm this, -- but that's apparently not what Apple believes in. It's absurd to say that three UI elements adds market demand and values so significant that all their profits on infringed Samsung devices taken away, while Ericsson's cellular patents diminished to a small percentage of a baseband.
You are arguing two very different cases, and they are not equivalent as one case is FRAND and the other Non SEP, in this case the UI.
Apple was arguing that its UI patents (slide to unlock) create a marketable difference in sales, which is undeniably true if you look at the value Apple obtains in the marketplace. Motorola should have to pay the royalties/damages with the basis as the whole device as the UI is specifically the means of using all of that functionality, including cellular, and that there were plenty of design options available, witness MS's smartphone UI. The court decided that Apple didn't appear to be impacted much by the infringement of Motorola, but that the royalties/damages would have to be assessed anyway. The Samsung case is quite different as there was evidence that suggested wholesale copying.
Apple argues that the basis of royalties smartphone components and IP should be on the component level that provides in this case cellular capability, not on the additional value that a smartphone, and especially an iPhone adds to the device as a whole.
As I have stated multiple times, I believe Apple wants to change the basis of the IP that they previously licensed from Ericsson as well as attempt to invalidate some patents, which they are entitled to without threat of injunction.
As for the comparison of the iPod Touch and the iPhone, they are very different generations of hardware, and the iPod Touch also lacks Touch ID and GPS, amongst other things that create a high cost, and value for the iPhone.
All I will say to this is that is there is far more to this case then what finally ended up on court the, The fight started right after Apple came out with the Iphone. Yes Motorola made an licensing offer which Apple turned down initially but Apple did come back later and put something on the table which Motorola turned down which lead to this
I can not find the reference but I also know that the FTC would not agree to the Motorola purchase deal unless Google agree not to use new patent trove against the other players in the Cell phone industry. This is why it took almost 1 yr for google to close the deal. Motorola was trying to blackmail Apple out of existences Most all of this never made to public since it was under arbitration.
This all happen because Apple told the FTC and the EU agency what Motorola was doing prior to Google getting involved.
I am not sure how the reference to "gorgeous" worked its way in but I never used the word in this thread (or any other that I can remember).
You didn't, and that's why I noted it as an "aside".
I just previously finished reading a post on BGR and I decided to throw it out there. You weren't the cause nor was I targeting you. Just merely pointing out media frenzy for (nearly) every new device.
My apologies.
Didn't feel targeted therefore no apology necessary -- just a tad disoriented.
I agree about the media. I think the media frenzy is an unfortunate side effect of the internet connected world i.e., to many Bozos claiming authority on subjects they know little about and audiences that are not skeptical enough to question them.
You are arguing two very different cases, and they are not equivalent as one case is FRAND and the other Non SEP, in this case the UI.
Apple was arguing that its UI patents (slide to unlock) create a marketable difference in sales, which is undeniably true if you look at the value Apple obtains in the marketplace. Motorola should have to pay the royalties/damages with the basis as the whole device as the UI is specifically the means of using all of that functionality, including cellular, and that there were plenty of design options available, witness MS's smartphone UI. The court decided that Apple didn't appear to be impacted much by the infringement of Motorola, but that the royalties/damages would have to be assessed anyway. The Samsung case is quite different as there was evidence that suggested wholesale copying.
Apple argues that the basis of royalties smartphone components and IP should be on the component level that provides in this case cellular capability, not on the additional value that a smartphone, and especially an iPhone adds to the device as a whole.
As I have stated multiple times, I believe Apple wants to change the basis of the IP that they previously licensed from Ericsson as well as attempt to invalidate some patents, which they are entitled to without threat of injunction.
As for the comparison of the iPod Touch and the iPhone, they are very different generations of hardware, and the iPod Touch also lacks Touch ID and GPS, amongst other things that create a high cost, and value for the iPhone.
@tmay : Sure, I'm arguing the same royalty basis / apportionment issue involving two different components of smartphone. FRAND deals with the royalty rates (fair, reasonable) and how they are licensed (and non-discriminatory) only, not the royalty basis, so your FRAND argument is a red herring.
I'm not quite sure what point you are trying to drive with the Apple vs Moto case here (11-CV-8540). The appeal was mostly about "the district court’s claim construction, admissibility, damages, and injunction decisions," not the royalty basis or apportionment. The district case never really got that far because Judge Posner who wasn't too crazy about the ongoing IP battles, summarily denied and ruled neither Apple or Moto was entitled to any damages or injunction. Or are you talking about another case? Perhaps the one involving EP1964022? I can't read the German and they have different legal IP standard -- further, the slide-to-unlock has been invalidated in Germany.
Perhaps you meant to say "Samsung." Well, but it seems like there is no point in discussing the Samsung case, either, since you are clearly unfamiliar with the case (case: 2012cv00630). So I'd simply note three things : (1) the slide-to-unlock is a utility patent and the damage on the three infringed utility patents (two of which are now invalid) was apportioned (2) for three UI infringements involving "the rectangular shape, rounded corners, translucent screen, and colorful icons common to smartphones", Apple's hometown court allowed the complete disgorgement of Samsung's entire profit (citing U.S. Code § 289 without any apportionment) (3) the "wholesale" copying you refer to in your comment falls under "trade dress claims," for which the jury awarded Apple separately. And I was looking at (2) in respect to Apple's double standard on royalty basis theory.
@tmay : Sure, I'm arguing the same royalty basis / apportionment issue involving two different components of smartphone. FRAND deals with the royalty rates (fair, reasonable) and how they are licensed (and non-discriminatory) only, not the royalty basis, so your FRAND argument is a red herring.
I'm not quite sure what point you are trying to drive with the Apple vs Moto case here (11-CV-8540). The appeal was mostly about "the district court’s claim construction, admissibility, damages, and injunction decisions," not the royalty basis or apportionment. The district case never really got that far because Judge Posner who wasn't too crazy about the ongoing IP battles, summarily denied and ruled neither Apple or Moto was entitled to any damages or injunction. Or are you talking about another case? Perhaps the one involving EP1964022? I can't read the German and they have different legal IP standard -- further, the slide-to-unlock has been invalidated in Germany.
Perhaps you meant to say "Samsung." Well, but it seems like there is no point in discussing the Samsung case, either, since you are clearly unfamiliar with the case (case: 2012cv00630). So I'd simply note three things : (1) the slide-to-unlock is a utility patent and the damage on the three infringed utility patents (two of which are now invalid) was apportioned (2) for three UI infringements involving "the rectangular shape, rounded corners, translucent screen, and colorful icons common to smartphones", Apple's hometown court allowed the complete disgorgement of Samsung's entire profit (citing U.S. Code § 289 without any apportionment) (3) the "wholesale" copying you refer to in your comment falls under "trade dress claims," for which the jury awarded Apple separately. And I was looking at (2) in respect to Apple's double standard on royalty basis theory.
I've probably co-mingled the Motorola / Apple and Motorola / Microsoft cases;
@tmay : okay. This case (10-cv-1823) does not supports your (or Apple's) royalty basis theory either -- did you actually read the decision? This case, again, deals with the FRAND royalty rates. The question of which appropriate royalty basis or apportionment rule should be used was not challenged or figured into the verdict.
There are two notable analytical factors that resulted in Judge Robart's decision in this particular case. First, the court evaluated Moto's patents to determine their importance to respective standard (H.264 and 802.11) and Microsoft products; and Judge Robart found that Moto's patent contribution to the standards or Microsoft's products was minimal. Second, more importantly, he looked at comparable licensing agreements and patent pools to determine what a FRAND royalty rate and range for Moto's patent portfolio ought to be. And, for that, the MPEG LA H.264 patent pool became de facto indicator because of its large share of the H.264 patents and members (licensors and licensees) participating in it . The standard FRAND rates for the MPEG LA H.264 pool depend on sales volume at a fixed price (eg, first 100K free, next 4.9M $0.20/unit, etc), subject to annual cap (for instance, $5M max in FY2009), not as a percentage on some royalty basis. Moto was awarded a small fraction of that amount.
Now, these cases you cite here don't necessarily help Apple in the on-going case with Ericsson or certainly don't explain why Apple feels the per device royalty basis is unfair. In fact, we could glean quite a bit from Apple's legal battle with Samsung what their true motive is.
Are you claiming it should be illegal to do so if the fish seller so wishes? I can't imagine how as they are his fish to sell or not.
Using your argument it would limit the value of a company you built with the sweat of your brow. My company may be much more valuable to certain buyers than others and I may demand a higher price to sell out to them because of the intrinsic value it offers them even if others would not realize that same value. I'm sure that shouldn't be too hard to understand.
EDIT: Like Ericthehalfbee you too seem to be trying to ignore that the patents Ericcsson is claiming Apple infringes are NOT all FRAND-pledged, perhaps to make your argument somehow valid. Ericsson is not required to license them to Apple in the first place and is well within their rights to refuse Apple's use of that patented technology.
Now whether the IP claims are valid to begin with and Apple is using them unlicensed (stealing them as some would claim if the defendant was some other company) are other arguments that will have to be heard if the cases continue. Instead I think the two will magically come to an agreement.
The fish seller has an obligation under the law to not favor one customer over another where those customers are equals. You can sell to a larger customer at a discounted price based upon larger volume of sales, but you cannot discriminate on pricing between two equal customers. You seem to have conflated this legal issue with the context of seeing out your entire business, in which case you are selling only one entity once and not on an ongoing basis. Of course when selling my entire software business, for example, to Oracle versus some smaller business, I can take into account the fact that Oracle can leverage its huge sales force and base of existing accounts to ramp sales of my company's product, and so my company is worth more to Oracle than to so small company without as large a sales force or existing customer base. But that's not what we're talking about here. That doesn't fall under the legal realm of discriminatory pricing which the fish seller would be guilty of in raising the price of his fish based to two equal volume buyers who walk into his fish market.
As to the FRAND issue, some of the Ericsson patents are FRAND and so those should be taken off the table with regard to this lawsuit. The fact they haven't been tells you that Ericsson is attempted to use them to pressure Apple into paying unfair license fees. The rest, yes, you could say that Ericsson has the right to charge whatever amount they wish, unless, and this is a huge UNLESS, unless they have already licensed those patents to others. You see, then we're back to the fish seller argument. Apple, in that case, is an equal buyer to others, or, if they are unequal because they are using the patented technology in larger quantities of handsets, then there might be an argument that Apple deserves a volume discount. But it would be discriminatory pricing for Ericsson to demand more for a license to Apple based upon value added by Apple in other aspects not related to the patented technology under discussion. This is why such laws exist. To prevent a leach with one critical bit of the pie from sucking all the value out that was added by other players. As evidence of what I'm saying, I refer you to last week's courtroom exchange between Judge Koh and Apple's lawyers on the Apple/Samsung licensing battle. Judge Koh is arguing that Apple cannot claim irreparable damage regarding patents Samsung continues to infringe after being found guilty of infringing in the 2013 patent case (the second CA case), because Apple licensed those patents to others. Now, Apple claims they have not licensed those patents to other and that the judge is mistaken. If that's true, then Apple could set the value of the those patents with the first license granted, and I suspect they would set the value very high such that Samsung would choose to stop infringing rather than to pay the license. But if the judge is correct and that Apple has already licensed those patents, then the amount Apple will be able to charge Samsung for a license is going to be constrained significantly by the amount Apple has charged others. Otherwise, they will be guilty of discriminatory pricing and the courts will step in.
You are right that some patents can't be tied to the price of the handset, ie the Motorola patents asserted against Microsoft that an earlier poster mentioned. Ericsson is not asserting only patents that can be tied to a specific component. They are claiming their developmental work, codified in several US patents, are applicable to the basic functionality of the iPhone itself and not simply one component of it.
Apple realizes more value from the patents than most other handset makers. Their products bring in billions of profit and those patents are much more valuable to them because of it. Ericsson would argue that without the hard and expensive ground work laid by them to make the iPhone possible Apple could not realize those profits. What is specifically unfair, much less illegal, about being asked to pay for the value realized from those patents.
No, Apple does NOT realize more value from the patents, per handset, than other handset makers. They realize more value per handset based upon better handset, software, and ecosystem design and implementation. See my other response to you about discriminatory pricing, where it applies and the fallacy of the argument you are making. The world is not so back and white as you believe.
If prices were determined purely based on value to the producer, why then do companies use shell companies when buying potentially valuable trademarks?
Because they are buying an entire entity. The rules of non-discriminatory pricing that apply in the case of the fish seller and in the case of patent licensing when patents are licensed to many customers, do not apply when you are the only buyer buying the a unique entity, like a trademark or an entire company. See my comment above to GatorGuy on this issue.
No, Apple does NOT realize more value from the patents, per handset, than other handset makers. They realize more value per handset based upon better handset, software, and ecosystem design and implementation. See my other response to you about discriminatory pricing, where it applies and the fallacy of the argument you are making. The world is not so back and white as you believe.
If everyone is paying the same percentage and obligated to the same contract terms then how could it be discriminatory? Is even Apple making a claim of discriminatory pricing? If not I don't know why you're harping on that particular point but let's humor you.
A private seller not otherwise contractually obligated can in general sell his property for whatever price he wishes can he not? If your fish seller decided to charge my high-end restaurant $30/lb for snapper and Joe's Roadside Cafe $7 he most likely can. Even if my high-end restaurant bought the identical volume of fish in identical packaging and under identical payment and delivery terms as other sellers (highly unlikely) the burden of proof for price discrimination would be so high as to make it a practical waste-of -time to pursue. But even here you're comparing the sale of commodities, real property, to a licensing agreement for intellectual property where the Robinson-Patman act (which you seem to be relying on) would not apply AFAIK.
Further, in this particular Ericsson/Apple licensing issue Ericsson is not contractually obligated to license the non-SEP ones in the first place, and there's apparently a significant number of them according to the legal filing. Don't you agree? You might review the very specific conditions that govern "Refusal to deal" rules at the FTC.
If 'Refusal to deal" was an issue why wouldn't the same rules apply to Apple, ie their contract royalty terms with HTC being applicable to a potential Samsung license, or with anyone else for that matter?
It appears to be mostly essential patents covering cellular communication.
If in fact Ericsson is using the sales or even the build cost of a smartphone as basis for the licensing rate, I would find this to be unfair, as smartphones have many features, services, software, apps and ecosystem that add value, not to mention brand.
As I suspected would happen if FRAND licensing became a revenue issue for the patent holders some are now declining to play. Recently the IEEE, the standards-bearer for wi-fi standards and licensing policy, indicated they would be changing their rules to the benefit of licensees. That prompted Qualcomm to announce they would no longer issue licenses under the IEEE's new rules, instead going to a case-by-case negotiation with individual implementers. http://www.bloomberg.com/news/articles/2015-02-11/qualcomm-says-new-wi-fi-standard-rules-unfair-may-not-take-part
InterDigital has now made that same decision, determining it's in their best interests to bypass the IEEE when it comes time for new licensing contracts. Those two companies are unlikely to be the only ones deciding to go their own way.
Comments
It certainly makes one wonder if that might be cheaper sometimes. If not that, how about a hostile takeover or buying a majority stake in that company.
As I recall there was a lot of (undue) pressure from more than one whacked out judge to settle these things. (BTW: I strongly disagree with the tactics that a couple of US Federal Judges have taken about scope of the law suits and feel that at least one is due to be censured for her uncalled for behavior to narrow this down.) I never said "Steve Jobs would have listened to accountants ... to save a few bucks" but when you get down to it that is one of the kind of decisions a CEO ends up making for the company they are steering. We have zero input from the Apple board members one way or another except that he never got a no confidence vote.
Again we find ourselves flogging a dead horse only to go nowhere. Believe what you like.
One point I feel compelled to point out is that he loved and was proud of the iPhone and this accomplishment. I remember him quite well saying so but not that he was dang proud of those patents (boy have we patented it).
I think that the Courts are still working their way through this to the new jurisprudence so while I'm not sure which Judge you are referring to, there are more than a few that need some "re-education".
As an aside, and referring to some unnamed click bait websites (cough: BGR) stop using "gorgeous" to describe every frickin new smartphone that comes out. It's overused and more importantly, these descriptions aren't even appropriate; the public appetite allows few smartphone to even reach classic status within their lifetimes, let alone the upgrade cycle (though I would admit my prejudice that the iPhone 4/4s has achieved that status).
I am not sure how the reference to "gorgeous" worked its way in but I never used the word in this thread (or any other that I can remember).
I am not sure how the reference to "gorgeous" worked its way in but I never used the word in this thread (or any other that I can remember).
You didn't, and that's why I noted it as an "aside".
I just previously finished reading a post on BGR and I decided to throw it out there. You weren't the cause nor was I targeting you. Just merely pointing out media frenzy for (nearly) every new device.
My apologies.
I meant that Motorola tried to extract more money out of Apple than they were charging others for the same IP. I know on good authority Apple made a nice offer to settle with Motorola on those patents prior to google buying them and Sanjay turned them down since he wanted Apple to cross license all the iphone GUI as part of the deal.
Motorola is the only company which Apple never paid FRAND licensing on the cell phone patents which they were using. They paid Nokia, Ericisson, and even MS, but Motorola never got a dime at least not until Google sold them to Lenovo.
It now appears that Ericisson want a much larger piece of the pie if what we are reading it correct. Ericisson is so confident in thier position they sueing in TX, Motorola sue Apple in IL their home ground and lost.
http://www.law360.com/articles/533433/apple-v-motorola-lessons-on-damages-sep-injunctions
In case you need a refresher on what happened and why.
http://www.essentialpatentblog.com/2014/04/federal-circuit-rules-no-per-se-prohibition-of-injunctions-for-standard-essential-patents-apple-v-motorola/
http://www.law360.com/articles/533433/apple-v-motorola-lessons-on-damages-sep-injunctions
In case you need a refresher on what happened and why.
Uhm, what is your point. That an opinion of one of the jurists was that Motorola should be allowed to make a case for injunctive relief as Apple was a "hold-out" or that another justice determined that damages could always be added if in fact Apple was a "hold out", because there was no pressing need for an injunction of FRAND'ed IP.
http://www.bna.com/federal-circuit-overturns-n17179890038/
"No Injunction for Motorola
Motorola's injunction problem was different, because it had agreed in its participation with the UMTS standards group that it would license its technology on fair, reasonable and nondiscriminatory (FRAND) terms.
When a standard-essential patent (SEP) holder offers a license on terms higher than it could have gotten before the standard was set, it is accused of “hold up” in seeking more than the fair value of the technology. Conversely, if a prospective licensee refuses to negotiate a royalty rate, knowing that it will be difficult for the SEP owner to get an injunction, the alleged infringer is accused of “hold out.”
“The record in this case shows evidence that Apple may have been a hold out.”Chief Judge Randall R. Rader, in dissent
The court's opinion accused Posner of setting a per se rule that an SEP owner could never get an injunction, though Prost's opinion said that was a mischaracterization. In any case, the court refused to say that there should be special rules for the injunction analysis when an SEP is involved. Instead, it placed the question of whether hold-up or hold-out exists properly within the eBay framework, and none of the panel members objected to that. However, they disagreed on how the negotiations so far between these two parties should be factored into that framework here.
Motorola offered a license to Apple and Apple refused the initial offer. According to the majority opinion, Motorola “has agreed to add as many market participants as are willing to pay a FRAND royalty,” and “negotiations [with Apple] have been ongoing.” Under eBay then, according to the majority, the lack of irreparable harm to Motorola is controlling, so the court affirmed summary judgment of no injunction for Motorola.
Chief Judge Rader's dissent, on the other hand, said, “The record in this case shows evidence that Apple may have been a hold out.” Since that determination would come from a factual inquiry necessary to a proper eBay analysis, he said, this issue should be remanded to allow Motorola to prove Apple's hold out.
Prost joined the majority on this issue, but she discounted any negotiations to date, saying that the lower court could simply increase damages when “an infringer previously engaged in bad faith negotiations.” She proposed that monetary damages would be inadequate only where the alleged infringer could not or would not pay a court-order damages award, which was not relevant here."
You might remember that Samsung was getting sued for copying Apple's UI, and Ericsson is providing RF IP that is embedded in a device that can be sold as a smallest saleable unit, an electronic component. Now it might be that there is more IP in play than RF technology, but since I don't know the details, I'll speculate like everyone else that Apple is negotiating basis, and also attempting to invalidate some IP. All of this is quite ordinary in negotiations, as is Ericsson's response; business as usual.
So, as I noted previously; is a smartphone a computer or a communication device?
Look at the iPhone without its SIM card. It's completely usable as a communication device via WiFi, which is provided via a Broadcom chip. Would you notice any difference other that a loss in mobility? Sure, cellular communication is important, but it says that the basis shouldn't be the iPhone price.
It's possible to operate a few things on the iPhone without the UI, sound volume as an example, but everything else must be accessed through the UI, and Apple has generated it growth primarily on the application of its UI on a number of different devices. The fact that Apple sells the iPad models with and without cellular communication is telling; it's a $130.00 and of course th
Should Ericsson's basis for the iPhone be some fraction of the $130.00? Probably, but decidedly not of the entire iPhone cost.
@tmay : Apple's home court awarded Apple for "three design patents claiming the rectangular shape, rounded corners, translucent screen, and colorful icons common to smartphones," three utility patents (two of which are now invalid), and two trade dress dilution claims. The UI design/utility patents are part of the underlying OS component which is given away for "free." So why should we apply one patent rules (ie, awarding infringer's entire profit to Apple) designed to deal with few-component product likes furnitures in Samsung's case, but another that evolved to deal with modern multicomponent products like smartphones in Ericsson's case?
Sure, if you remove the SIM card from your iPhone and strip away all cellular functionality, you essentially end up with with a iPod Touch.
It's no longer a phone, whereas the iPad with or without a SIM card or cellular functionality is still a tablet. The iPhone costs about 150% to 300% more than similarly configured iPod Touch and, based Apple's own pricing strategy, the cellular tech adds significant value to the iPhone. Whereas for the iPad, the price differential is much smaller, but the demand for the iPad cellular is also much smaller (less than 10% of all iPad sales in 2012). In another word, do cellular techs drive demand for the iPhone? The answer here is Yes.
I also believe some appropriate apportionment and market demand analysis should be applied in all multicomponent technology cases -- and many recent court cases and policy statements from a few SSO's (IEEE) seem to affirm this, -- but that's apparently not what Apple believes in. It's absurd to say that three UI elements adds market demand and values so significant that all their profits on infringed Samsung devices taken away, while Ericsson's cellular patents diminished to a small percentage of a baseband. I'm pretty sure the Federal Circuit will reverse Apple's win in Samsung's case, but I also believe that Apple's royalty basis argument is very weak.
@tmay : Apple's home court awarded Apple for "three design patents claiming the rectangular shape, rounded corners, translucent screen, and colorful icons common to smartphones," three utility patents (two of which are now invalid), and two trade dress dilution claims. The UI design/utility patents are part of the underlying OS component which is given away for "free." So why should we apply one patent rules (ie, awarding infringer's entire profit to Apple) designed to deal with few-component product likes furnitures in Samsung's case, but another that evolved to deal with modern multicomponent products like smartphones in Ericsson's case?
Sure, if you remove the SIM card from your iPhone and strip away all cellular functionality, you essentially end up with with a iPod Touch.
It's no longer a phone, whereas the iPad with or without a SIM card or cellular functionality is still a tablet. The iPhone costs about 150% to 300% more than similarly configured iPod Touch and, based Apple's own pricing strategy, the cellular tech adds significant value to the iPhone. Whereas for the iPad, the price differential is much smaller, but the demand for the iPad cellular is also much smaller (less than 10% of all iPad sales in 2012). In another word, do cellular techs drive demand for the iPhone? The answer here is Yes.
I also believe some appropriate apportionment and market demand analysis should be applied in all multicomponent technology cases -- and many recent court cases and policy statements from a few SSO's (IEEE) seem to affirm this, -- but that's apparently not what Apple believes in. It's absurd to say that three UI elements adds market demand and values so significant that all their profits on infringed Samsung devices taken away, while Ericsson's cellular patents diminished to a small percentage of a baseband.
You are arguing two very different cases, and they are not equivalent as one case is FRAND and the other Non SEP, in this case the UI.
Apple was arguing that its UI patents (slide to unlock) create a marketable difference in sales, which is undeniably true if you look at the value Apple obtains in the marketplace. Motorola should have to pay the royalties/damages with the basis as the whole device as the UI is specifically the means of using all of that functionality, including cellular, and that there were plenty of design options available, witness MS's smartphone UI. The court decided that Apple didn't appear to be impacted much by the infringement of Motorola, but that the royalties/damages would have to be assessed anyway. The Samsung case is quite different as there was evidence that suggested wholesale copying.
Apple argues that the basis of royalties smartphone components and IP should be on the component level that provides in this case cellular capability, not on the additional value that a smartphone, and especially an iPhone adds to the device as a whole.
As I have stated multiple times, I believe Apple wants to change the basis of the IP that they previously licensed from Ericsson as well as attempt to invalidate some patents, which they are entitled to without threat of injunction.
As for the comparison of the iPod Touch and the iPhone, they are very different generations of hardware, and the iPod Touch also lacks Touch ID and GPS, amongst other things that create a high cost, and value for the iPhone.
All I will say to this is that is there is far more to this case then what finally ended up on court the, The fight started right after Apple came out with the Iphone. Yes Motorola made an licensing offer which Apple turned down initially but Apple did come back later and put something on the table which Motorola turned down which lead to this
http://appleinsider.com/articles/13/01/03/google-agrees-to-license-motorola-patents-ending-ftcs-antitrust-investigation
and here is more
http://www.americanbar.org/content/dam/aba/publications/antitrust_law/at315000_tidbits_20130726.authcheckdam.pdf
I can not find the reference but I also know that the FTC would not agree to the Motorola purchase deal unless Google agree not to use new patent trove against the other players in the Cell phone industry. This is why it took almost 1 yr for google to close the deal. Motorola was trying to blackmail Apple out of existences Most all of this never made to public since it was under arbitration.
This all happen because Apple told the FTC and the EU agency what Motorola was doing prior to Google getting involved.
I am not sure how the reference to "gorgeous" worked its way in but I never used the word in this thread (or any other that I can remember).
You didn't, and that's why I noted it as an "aside".
I just previously finished reading a post on BGR and I decided to throw it out there. You weren't the cause nor was I targeting you. Just merely pointing out media frenzy for (nearly) every new device.
My apologies.
Didn't feel targeted therefore no apology necessary -- just a tad disoriented.
I agree about the media. I think the media frenzy is an unfortunate side effect of the internet connected world i.e., to many Bozos claiming authority on subjects they know little about and audiences that are not skeptical enough to question them.
You are arguing two very different cases, and they are not equivalent as one case is FRAND and the other Non SEP, in this case the UI.
Apple was arguing that its UI patents (slide to unlock) create a marketable difference in sales, which is undeniably true if you look at the value Apple obtains in the marketplace. Motorola should have to pay the royalties/damages with the basis as the whole device as the UI is specifically the means of using all of that functionality, including cellular, and that there were plenty of design options available, witness MS's smartphone UI. The court decided that Apple didn't appear to be impacted much by the infringement of Motorola, but that the royalties/damages would have to be assessed anyway. The Samsung case is quite different as there was evidence that suggested wholesale copying.
Apple argues that the basis of royalties smartphone components and IP should be on the component level that provides in this case cellular capability, not on the additional value that a smartphone, and especially an iPhone adds to the device as a whole.
As I have stated multiple times, I believe Apple wants to change the basis of the IP that they previously licensed from Ericsson as well as attempt to invalidate some patents, which they are entitled to without threat of injunction.
As for the comparison of the iPod Touch and the iPhone, they are very different generations of hardware, and the iPod Touch also lacks Touch ID and GPS, amongst other things that create a high cost, and value for the iPhone.
@tmay : Sure, I'm arguing the same royalty basis / apportionment issue involving two different components of smartphone. FRAND deals with the royalty rates (fair, reasonable) and how they are licensed (and non-discriminatory) only, not the royalty basis, so your FRAND argument is a red herring.
I'm not quite sure what point you are trying to drive with the Apple vs Moto case here (11-CV-8540). The appeal was mostly about "the district court’s claim construction, admissibility, damages, and injunction decisions," not the royalty basis or apportionment. The district case never really got that far because Judge Posner who wasn't too crazy about the ongoing IP battles, summarily denied and ruled neither Apple or Moto was entitled to any damages or injunction. Or are you talking about another case? Perhaps the one involving EP1964022? I can't read the German and they have different legal IP standard -- further, the slide-to-unlock has been invalidated in Germany.
Perhaps you meant to say "Samsung." Well, but it seems like there is no point in discussing the Samsung case, either, since you are clearly unfamiliar with the case (case: 2012cv00630). So I'd simply note three things : (1) the slide-to-unlock is a utility patent and the damage on the three infringed utility patents (two of which are now invalid) was apportioned (2) for three UI infringements involving "the rectangular shape, rounded corners, translucent screen, and colorful icons common to smartphones", Apple's hometown court allowed the complete disgorgement of Samsung's entire profit (citing U.S. Code § 289 without any apportionment) (3) the "wholesale" copying you refer to in your comment falls under "trade dress claims," for which the jury awarded Apple separately. And I was looking at (2) in respect to Apple's double standard on royalty basis theory.
@tmay : Sure, I'm arguing the same royalty basis / apportionment issue involving two different components of smartphone. FRAND deals with the royalty rates (fair, reasonable) and how they are licensed (and non-discriminatory) only, not the royalty basis, so your FRAND argument is a red herring.
I'm not quite sure what point you are trying to drive with the Apple vs Moto case here (11-CV-8540). The appeal was mostly about "the district court’s claim construction, admissibility, damages, and injunction decisions," not the royalty basis or apportionment. The district case never really got that far because Judge Posner who wasn't too crazy about the ongoing IP battles, summarily denied and ruled neither Apple or Moto was entitled to any damages or injunction. Or are you talking about another case? Perhaps the one involving EP1964022? I can't read the German and they have different legal IP standard -- further, the slide-to-unlock has been invalidated in Germany.
Perhaps you meant to say "Samsung." Well, but it seems like there is no point in discussing the Samsung case, either, since you are clearly unfamiliar with the case (case: 2012cv00630). So I'd simply note three things : (1) the slide-to-unlock is a utility patent and the damage on the three infringed utility patents (two of which are now invalid) was apportioned (2) for three UI infringements involving "the rectangular shape, rounded corners, translucent screen, and colorful icons common to smartphones", Apple's hometown court allowed the complete disgorgement of Samsung's entire profit (citing U.S. Code § 289 without any apportionment) (3) the "wholesale" copying you refer to in your comment falls under "trade dress claims," for which the jury awarded Apple separately. And I was looking at (2) in respect to Apple's double standard on royalty basis theory.
I've probably co-mingled the Motorola / Apple and Motorola / Microsoft cases;
http://www.reuters.com/article/2013/09/05/us-microsoft-google-trial-idUSBRE98401B20130905
I apologise; I was going off memory.
I've probably co-mingled the Motorola / Apple and Motorola / Microsoft cases;
http://www.reuters.com/article/2013/09/05/us-microsoft-google-trial-idUSBRE98401B20130905
I apologise; I was going off memory.
@tmay : okay. This case (10-cv-1823) does not supports your (or Apple's) royalty basis theory either -- did you actually read the decision? This case, again, deals with the FRAND royalty rates. The question of which appropriate royalty basis or apportionment rule should be used was not challenged or figured into the verdict.
There are two notable analytical factors that resulted in Judge Robart's decision in this particular case. First, the court evaluated Moto's patents to determine their importance to respective standard (H.264 and 802.11) and Microsoft products; and Judge Robart found that Moto's patent contribution to the standards or Microsoft's products was minimal. Second, more importantly, he looked at comparable licensing agreements and patent pools to determine what a FRAND royalty rate and range for Moto's patent portfolio ought to be. And, for that, the MPEG LA H.264 patent pool became de facto indicator because of its large share of the H.264 patents and members (licensors and licensees) participating in it . The standard FRAND rates for the MPEG LA H.264 pool depend on sales volume at a fixed price (eg, first 100K free, next 4.9M $0.20/unit, etc), subject to annual cap (for instance, $5M max in FY2009), not as a percentage on some royalty basis. Moto was awarded a small fraction of that amount.
Now, these cases you cite here don't necessarily help Apple in the on-going case with Ericsson or certainly don't explain why Apple feels the per device royalty basis is unfair. In fact, we could glean quite a bit from Apple's legal battle with Samsung what their true motive is.
Are you claiming it should be illegal to do so if the fish seller so wishes? I can't imagine how as they are his fish to sell or not.
Using your argument it would limit the value of a company you built with the sweat of your brow. My company may be much more valuable to certain buyers than others and I may demand a higher price to sell out to them because of the intrinsic value it offers them even if others would not realize that same value. I'm sure that shouldn't be too hard to understand.
EDIT: Like Ericthehalfbee you too seem to be trying to ignore that the patents Ericcsson is claiming Apple infringes are NOT all FRAND-pledged, perhaps to make your argument somehow valid. Ericsson is not required to license them to Apple in the first place and is well within their rights to refuse Apple's use of that patented technology.
Now whether the IP claims are valid to begin with and Apple is using them unlicensed (stealing them as some would claim if the defendant was some other company) are other arguments that will have to be heard if the cases continue. Instead I think the two will magically come to an agreement.
The fish seller has an obligation under the law to not favor one customer over another where those customers are equals. You can sell to a larger customer at a discounted price based upon larger volume of sales, but you cannot discriminate on pricing between two equal customers. You seem to have conflated this legal issue with the context of seeing out your entire business, in which case you are selling only one entity once and not on an ongoing basis. Of course when selling my entire software business, for example, to Oracle versus some smaller business, I can take into account the fact that Oracle can leverage its huge sales force and base of existing accounts to ramp sales of my company's product, and so my company is worth more to Oracle than to so small company without as large a sales force or existing customer base. But that's not what we're talking about here. That doesn't fall under the legal realm of discriminatory pricing which the fish seller would be guilty of in raising the price of his fish based to two equal volume buyers who walk into his fish market.
As to the FRAND issue, some of the Ericsson patents are FRAND and so those should be taken off the table with regard to this lawsuit. The fact they haven't been tells you that Ericsson is attempted to use them to pressure Apple into paying unfair license fees. The rest, yes, you could say that Ericsson has the right to charge whatever amount they wish, unless, and this is a huge UNLESS, unless they have already licensed those patents to others. You see, then we're back to the fish seller argument. Apple, in that case, is an equal buyer to others, or, if they are unequal because they are using the patented technology in larger quantities of handsets, then there might be an argument that Apple deserves a volume discount. But it would be discriminatory pricing for Ericsson to demand more for a license to Apple based upon value added by Apple in other aspects not related to the patented technology under discussion. This is why such laws exist. To prevent a leach with one critical bit of the pie from sucking all the value out that was added by other players. As evidence of what I'm saying, I refer you to last week's courtroom exchange between Judge Koh and Apple's lawyers on the Apple/Samsung licensing battle. Judge Koh is arguing that Apple cannot claim irreparable damage regarding patents Samsung continues to infringe after being found guilty of infringing in the 2013 patent case (the second CA case), because Apple licensed those patents to others. Now, Apple claims they have not licensed those patents to other and that the judge is mistaken. If that's true, then Apple could set the value of the those patents with the first license granted, and I suspect they would set the value very high such that Samsung would choose to stop infringing rather than to pay the license. But if the judge is correct and that Apple has already licensed those patents, then the amount Apple will be able to charge Samsung for a license is going to be constrained significantly by the amount Apple has charged others. Otherwise, they will be guilty of discriminatory pricing and the courts will step in.
You are right that some patents can't be tied to the price of the handset, ie the Motorola patents asserted against Microsoft that an earlier poster mentioned. Ericsson is not asserting only patents that can be tied to a specific component. They are claiming their developmental work, codified in several US patents, are applicable to the basic functionality of the iPhone itself and not simply one component of it.
Apple realizes more value from the patents than most other handset makers. Their products bring in billions of profit and those patents are much more valuable to them because of it. Ericsson would argue that without the hard and expensive ground work laid by them to make the iPhone possible Apple could not realize those profits. What is specifically unfair, much less illegal, about being asked to pay for the value realized from those patents.
No, Apple does NOT realize more value from the patents, per handset, than other handset makers. They realize more value per handset based upon better handset, software, and ecosystem design and implementation. See my other response to you about discriminatory pricing, where it applies and the fallacy of the argument you are making. The world is not so back and white as you believe.
If prices were determined purely based on value to the producer, why then do companies use shell companies when buying potentially valuable trademarks?
Because they are buying an entire entity. The rules of non-discriminatory pricing that apply in the case of the fish seller and in the case of patent licensing when patents are licensed to many customers, do not apply when you are the only buyer buying the a unique entity, like a trademark or an entire company. See my comment above to GatorGuy on this issue.
If everyone is paying the same percentage and obligated to the same contract terms then how could it be discriminatory? Is even Apple making a claim of discriminatory pricing? If not I don't know why you're harping on that particular point but let's humor you.
A private seller not otherwise contractually obligated can in general sell his property for whatever price he wishes can he not? If your fish seller decided to charge my high-end restaurant $30/lb for snapper and Joe's Roadside Cafe $7 he most likely can. Even if my high-end restaurant bought the identical volume of fish in identical packaging and under identical payment and delivery terms as other sellers (highly unlikely) the burden of proof for price discrimination would be so high as to make it a practical waste-of -time to pursue. But even here you're comparing the sale of commodities, real property, to a licensing agreement for intellectual property where the Robinson-Patman act (which you seem to be relying on) would not apply AFAIK.
Further, in this particular Ericsson/Apple licensing issue Ericsson is not contractually obligated to license the non-SEP ones in the first place, and there's apparently a significant number of them according to the legal filing. Don't you agree? You might review the very specific conditions that govern "Refusal to deal" rules at the FTC.
If 'Refusal to deal" was an issue why wouldn't the same rules apply to Apple, ie their contract royalty terms with HTC being applicable to a potential Samsung license, or with anyone else for that matter?
As I suspected would happen if FRAND licensing became a revenue issue for the patent holders some are now declining to play. Recently the IEEE, the standards-bearer for wi-fi standards and licensing policy, indicated they would be changing their rules to the benefit of licensees. That prompted Qualcomm to announce they would no longer issue licenses under the IEEE's new rules, instead going to a case-by-case negotiation with individual implementers.
http://www.bloomberg.com/news/articles/2015-02-11/qualcomm-says-new-wi-fi-standard-rules-unfair-may-not-take-part
InterDigital has now made that same decision, determining it's in their best interests to bypass the IEEE when it comes time for new licensing contracts. Those two companies are unlikely to be the only ones deciding to go their own way.
The InterDigital letter explaining their decision is well worth the read.
http://www.iam-media.com/blog/Detail.aspx?g=8c9676dd-6bbd-4d6c-b3e5-9a5ddeb36581