On the face of it Apple looks like a bit of a dick in this case, as it would seem that it would be a simple matter of basing the fee on what everyone else is paying. How complicated can that be.
So you are privy to negotiations then. Please spell out the terms that are holding up proceedings... or to put this another way, assure the reader at least that Ericsson's terms are fair and reasonable.
Had you finished reading my post your pointlessly flamey reply would have been unnecessary. I say how it appears to the lay person then I accept there are other intricies. The point of my post is to implore AI to take this case when it is finished and explain how the actual arguements go.
And it was probably ok back when phones were just phones.
To claim royalties over the whole device is stretching that method way beyond what these devices do now.
IMO - this is like Ford claiming royalties for airplanes just because they've got wheels and a propulsion system :-)
It seems like a better analogy would be if there is a tire patent used by Goodyear in their tires that Ford builds into a car, and the patent holder wanted to charge Ford royalties based upon the entire value of their car instead of just the value of the tires. If the patent holder demanded 1% of the value of a $40,000 car, that amount ($400) could be as much as the full cost of the four tires on the car--which would be an absurdly high royalty amount.
"One big advantage with this strategy is also that it is likely that the royalty income will be higher since we calculate the royalty on a more expensive product."
"That's the "justification" for the royalty base: more money to the patent holder. But this is not an economic justification. There's no reason why Ericsson should get more from Samsung than it would from Qualcomm if a given patent (or set of patents) could also be licensed to the chipset maker. Ericsson asserted not only standard-essential but also various non-essential patents against Samsung, so on the non-SEP side it may claim that it owns technology infringed by, for example, Android. For SEP-only licensing, however, the proper royalty base is the price of a chipset that implements the standard."
On the face of it Apple looks like a bit of a dick in this case, as it would seem that it would be a simple matter of basing the fee on what everyone else is paying. How complicated can that be. However, I can only presume that there must be convoluted intricacies too subtle for the lay person to comprehend. Therefore it would be excellent if AppleInsider could follow this one up to the final judgement and publish the court's full reasoning, so that Joe Public can see for him/herself if this sort of stuff really does come about because of intransigent differences between Ericsson and Apple or if Apple really is simply being a dick about this.
The fact of the matter is that erricson wanted there fees to be based on the end product price not the chip inside the iPhone that uses there patent. Sounds to me that erricson is being the dick here not apple
The fact of the matter is that erricson wanted there fees to be based on the end product price not the chip inside the iPhone that uses there patent. Sounds to me that erricson is being the dick here not apple
Ericssons' mobile SEP's have always been tied to the wholesale cost of the device. That's their royalty basis just as it is /was with Nokia, Qualcomm, Alcatel, Motorola and many others. Apple's previous licensing deal with Ericsson that expired recently was almost certainly based on the wholesale price too. FWIW that was probably the price Apple was paying to buy the iPhones from Hon Hai as I've understood it. Apple now wants to change it. Ericsson would prefer not to. That's the essence of it.
Ericssons' mobile SEP's have always been tied to the wholesale cost of the device. That's their royalty basis just as it is /was with Nokia, Qualcomm, Alcatel, Motorola and many others. Apple's previous licensing deal with Ericsson that expired recently was almost certainly based on the wholesale price too. FWIW that was probably the price Apple was paying to buy the iPhones from Hon Hai as I've understood it. Apple now wants to change it. Ericsson would prefer not to. That's the essence of it.
Just because Ericsson were able to extort that concession from manufacturers in the past doesn't make it right today.
Way more than just a mobile phone - a handheld computer.
Witness the App Store and the millions of apps that have nothing to do with Ericssons claim to the overall device.
Do you think Apple should continue to develop its own SOCs knowing that whatever mobile communication device they may market has a claim on it by a company that has contributed nothing to its development ?
They're just being plain greedy and looking to set a precedent so the millions will roll in for fkn ever. That's the essence of it.
Just because Ericsson were able to extort that concession from manufacturers in the past doesn't make it right today.
Way more than just a mobile phone - a handheld computer.
Witness the App Store and the millions of apps that have nothing to do with Ericssons claim to the overall device.
Do you think Apple should continue to develop its own SOCs knowing that whatever mobile communication device they may market has a claim on it by a company that has contributed nothing to its development ?
They're just being plain greedy and looking to set a precedent so the millions will roll in for fkn ever. That's the essence of it.
What are they getting in the present from the other manufacturers?
So you are privy to negotiations then. Please spell out the terms that are holding up proceedings... or to put this another way, assure the reader at least that Ericsson's terms are fair and reasonable.
quote the next line! he is not privy and lets us know that. read and keep reading until the end
"However, I can only presume that there must be convoluted intricacies too subtle for the lay person to comprehend."
The fact of the matter is that erricson wanted there fees to be based on the end product price not the chip inside the iPhone that uses there patent. Sounds to me that erricson is being the dick here not apple
Ericssons' mobile SEP's have always been tied to the wholesale cost of the device. That's their royalty basis just as it is /was with Nokia, Qualcomm, Alcatel, Motorola and many others. Apple's previous licensing deal with Ericsson that expired recently was almost certainly based on the wholesale price too. FWIW that was probably the price Apple was paying to buy the iPhones from Hon Hai as I've understood it. Apple now wants to change it. Ericsson would prefer not to. That's the essence of it.
OK, I can see the argument both ways. Wholesale price of finished object seems a bit rich, but then again, phones were not so pricey in the past, so Ericsson want more profit from their tech. I think Apple is doing the right thing to have this settled in court, but it should go to a specialist court that would set a precedent. Maybe Apple should have gone for an independent arbitrator who was a retired judge with experience in this field.
Certainly a third party should. The SEP patent holders shouldn't be allowed to charge Apple more $$ than another company simply because the iPhone cost/is worth more.
What are they getting in the present from the other manufacturers?
I've got no idea - but as shompa pointed out manufacturers are paying already to Qualcomm et al.
as component suppliers. Ericssons already earning through that avenue.
It's this detestable greed that irks me in these cases.
Some sort of claim to entitlement from yesteryear - that in this case is through ip that is largely irrelevant.
Ultimately stifling the rate of progress.
IEEE doesn't agree, and as I have mentioned before, the courts in both the U.S. and Europe are trending towards basis as the smallest salable unit.
So, while it might have been fair and reasonable in the past, is it currently? Should Apple's devices that are computers be judged the same as dumb or even feature phones?
Is it communications at the heart of the device or a computer?
Trying to argue smartphones are computers first and phones second is nonsensical. The iPod Touch for many years was the near equivalent of an iPhone without cellular voice or data capabilities. At no point have sales of the Touch been anything but a tiny fraction of iPhone sales. It would seem then that the defining difference is a massive differentiator and is therefore clearly the primary function.
Just because Ericsson were able to extort that concession from manufacturers in the past doesn't make it right today.
Way more than just a mobile phone - a handheld computer.
Witness the App Store and the millions of apps that have nothing to do with Ericssons claim to the overall device.
Do you think Apple should continue to develop its own SOCs knowing that whatever mobile communication device they may market has a claim on it by a company that has contributed nothing to its development ?
They're just being plain greedy and looking to set a precedent so the millions will roll in for fkn ever. That's the essence of it.
Apple is one of the greediest companies on the planet. Greed seems to work for them. Want that WiFi chip you paid for in you Macbook activated to N class - pay us extra. Want to sell our phones - give us a percentage of your data revenues. Want that Macbook Pro retina you paid thousands for to be able to use Ethernet - buy our dongle.
Trying to argue smartphones are computers first and phones second is nonsensical. The iPod Touch for many years was the near equivalent of an iPhone without cellular voice or data capabilities. At no point have sales of the Touch been anything but a tiny fraction of iPhone sales. It would seem then that the defining difference is a massive differentiator and is therefore clearly the primary function.
Connectivity being the deciding factor. How many desktop computers would people buy if there was no Internet?
Okay, my car has built in 3G wireless. Mercedes now has 4G. Should Ericson be entitled to a % of a $50000 car?
@sd-diver : Sure, but is that what's driving "market demand" for your car or Mercedes? If folks are buying Mercedes just because of the wireless functionality, yes, otherwise, no.
Comments
Had you finished reading my post your pointlessly flamey reply would have been unnecessary. I say how it appears to the lay person then I accept there are other intricies. The point of my post is to implore AI to take this case when it is finished and explain how the actual arguements go.
It seems like a better analogy would be if there is a tire patent used by Goodyear in their tires that Ford builds into a car, and the patent holder wanted to charge Ford royalties based upon the entire value of their car instead of just the value of the tires. If the patent holder demanded 1% of the value of a $40,000 car, that amount ($400) could be as much as the full cost of the four tires on the car--which would be an absurdly high royalty amount.
http://www.fosspatents.com/2014/01/ericsson-explained-publicly-why-its.html
A bit I culled out.
"One big advantage with this strategy is also that it is likely that the royalty income will be higher since we calculate the royalty on a more expensive product."
"That's the "justification" for the royalty base: more money to the patent holder. But this is not an economic justification. There's no reason why Ericsson should get more from Samsung than it would from Qualcomm if a given patent (or set of patents) could also be licensed to the chipset maker. Ericsson asserted not only standard-essential but also various non-essential patents against Samsung, so on the non-SEP side it may claim that it owns technology infringed by, for example, Android. For SEP-only licensing, however, the proper royalty base is the price of a chipset that implements the standard."
On the face of it Apple looks like a bit of a dick in this case, as it would seem that it would be a simple matter of basing the fee on what everyone else is paying. How complicated can that be. However, I can only presume that there must be convoluted intricacies too subtle for the lay person to comprehend. Therefore it would be excellent if AppleInsider could follow this one up to the final judgement and publish the court's full reasoning, so that Joe Public can see for him/herself if this sort of stuff really does come about because of intransigent differences between Ericsson and Apple or if Apple really is simply being a dick about this.
The fact of the matter is that erricson wanted there fees to be based on the end product price not the chip inside the iPhone that uses there patent. Sounds to me that erricson is being the dick here not apple
Like fair taxes? Who makes that determination?
Just because Ericsson were able to extort that concession from manufacturers in the past doesn't make it right today.
Way more than just a mobile phone - a handheld computer.
Witness the App Store and the millions of apps that have nothing to do with Ericssons claim to the overall device.
Do you think Apple should continue to develop its own SOCs knowing that whatever mobile communication device they may market has a claim on it by a company that has contributed nothing to its development ?
They're just being plain greedy and looking to set a precedent so the millions will roll in for fkn ever. That's the essence of it.
What are they getting in the present from the other manufacturers?
Bad example. The car can function without ever using it. It's not a integral part of the car.
So you are privy to negotiations then. Please spell out the terms that are holding up proceedings... or to put this another way, assure the reader at least that Ericsson's terms are fair and reasonable.
quote the next line! he is not privy and lets us know that. read and keep reading until the end
"However, I can only presume that there must be convoluted intricacies too subtle for the lay person to comprehend."
The fact of the matter is that erricson wanted there fees to be based on the end product price not the chip inside the iPhone that uses there patent. Sounds to me that erricson is being the dick here not apple
Ericssons' mobile SEP's have always been tied to the wholesale cost of the device. That's their royalty basis just as it is /was with Nokia, Qualcomm, Alcatel, Motorola and many others. Apple's previous licensing deal with Ericsson that expired recently was almost certainly based on the wholesale price too. FWIW that was probably the price Apple was paying to buy the iPhones from Hon Hai as I've understood it. Apple now wants to change it. Ericsson would prefer not to. That's the essence of it.
OK, I can see the argument both ways. Wholesale price of finished object seems a bit rich, but then again, phones were not so pricey in the past, so Ericsson want more profit from their tech. I think Apple is doing the right thing to have this settled in court, but it should go to a specialist court that would set a precedent. Maybe Apple should have gone for an independent arbitrator who was a retired judge with experience in this field.
Certainly a third party should. The SEP patent holders shouldn't be allowed to charge Apple more $$ than another company simply because the iPhone cost/is worth more.
And iOS devices don't have to use 4G LTE tech.
I've got no idea - but as shompa pointed out manufacturers are paying already to Qualcomm et al.
as component suppliers. Ericssons already earning through that avenue.
It's this detestable greed that irks me in these cases.
Some sort of claim to entitlement from yesteryear - that in this case is through ip that is largely irrelevant.
Ultimately stifling the rate of progress.
IEEE doesn't agree, and as I have mentioned before, the courts in both the U.S. and Europe are trending towards basis as the smallest salable unit.
So, while it might have been fair and reasonable in the past, is it currently? Should Apple's devices that are computers be judged the same as dumb or even feature phones?
Is it communications at the heart of the device or a computer?
Trying to argue smartphones are computers first and phones second is nonsensical. The iPod Touch for many years was the near equivalent of an iPhone without cellular voice or data capabilities. At no point have sales of the Touch been anything but a tiny fraction of iPhone sales. It would seem then that the defining difference is a massive differentiator and is therefore clearly the primary function.
Just because Ericsson were able to extort that concession from manufacturers in the past doesn't make it right today.
Way more than just a mobile phone - a handheld computer.
Witness the App Store and the millions of apps that have nothing to do with Ericssons claim to the overall device.
Do you think Apple should continue to develop its own SOCs knowing that whatever mobile communication device they may market has a claim on it by a company that has contributed nothing to its development ?
They're just being plain greedy and looking to set a precedent so the millions will roll in for fkn ever. That's the essence of it.
Apple is one of the greediest companies on the planet. Greed seems to work for them. Want that WiFi chip you paid for in you Macbook activated to N class - pay us extra. Want to sell our phones - give us a percentage of your data revenues. Want that Macbook Pro retina you paid thousands for to be able to use Ethernet - buy our dongle.
Connectivity being the deciding factor. How many desktop computers would people buy if there was no Internet?
Okay, my car has built in 3G wireless. Mercedes now has 4G. Should Ericson be entitled to a % of a $50000 car?
@sd-diver : Sure, but is that what's driving "market demand" for your car or Mercedes? If folks are buying Mercedes just because of the wireless functionality, yes, otherwise, no.
IMO - this is like Ford claiming royalties for airplanes just because they've got wheels and a propulsion system :-)
or more like a company in Cupertino claiming royalties just because they got rectangles and rounded corners. ahem.