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To Mollify Google on Moto Patents, Apple Proposes $1/Device Fee 582

Posted by timothy
from the you-know-what-the-cartel-wants dept.
An anonymous reader writes "Motorola feels that Apple is infringing on several FRAND patents that have to do with how every smartphone in existence connects to WiFi and cellular networks. Since Apple makes smartphones, and Google is looking to use their newly acquired Motorola as a weapon, the two companies are only a few days away from the courtroom. Apple has conceded that the Moto patents are valid by offering to pay Google/Moto $1 per device, but only going forward. Motorola wants 2.25% per device and for it to cover all Apple devices (back dated). If Motorola pursues the case and the court issues a per device rate that is higher than Apple's offer, Apple promises to pursue all possible appeals to avoid paying more than $1. Motorola could end this quickly, or watch as Apple drags this out for what could be years."
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To Mollify Google on Moto Patents, Apple Proposes $1/Device Fee

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  • Re:Bad faith (Score:4, Insightful)

    by Anonymous Coward on Thursday November 01, 2012 @02:42PM (#41844833)

    Apple do seem to believe lately that their Reality Distortion Field affects judges as well as fanboys.

  • by EasyTarget (43516) on Thursday November 01, 2012 @02:45PM (#41844883) Journal

    This is surely simple; Apple is using Motorolas patents; if they will not accept the FRAND offered by Moto then a Judge will surely be willing to grant a injunction against sales and promotion of all infringing products. As apple themselves have shown, this need not take years.

    Or do fanbois think that 'rounded corners' drawn by one of their case designers a few years back represents a more important piece of IP than the detailed algorithms controlling signalling in a congested radio band that took real scientists and engineers years of research and skill to develop?

  • by InvisibleClergy (1430277) on Thursday November 01, 2012 @02:47PM (#41844895)

    Think about what could be made if, instead of burning all of this money for a Pyrrhic victory against each other, Google and Apple spent all of that money on development. That would be nice. That would be neighborly.

    Apple, Google: Listen to Mr. Rogers's ghost. Why won't you be each other's neighbors?

  • by SuperKendall (25149) on Thursday November 01, 2012 @02:47PM (#41844897)

    I have no idea if Apple's $1 figure is fair. It's probably a lowball figure to negotiate from.

    But I am sure Motorola's counter of a percentage based on device cost is NOT fair. After all, the only difference between a 64GB iPhone and a 32GB iPhone is the amount of RAM, yet Apple would have to pay Motorola more for a license from the more expensive phone! That is ridiculous.

  • by Anonymous Coward on Thursday November 01, 2012 @02:47PM (#41844901)

    AFAIK Apple has always agreed the patents are valid, they have however refused to pay UNFAIR fees.

    Put it another way,what Motorola is asking for is like a Tyre company charging for a tyre based on what your car is worth, or the exact same tyre.
    Apple is asking to pay the same price as everyone else.

    Love/Hate Apple as much as you like, but if it was you buying the tyre for your car would you think it is Fair, Reasonable to pay 10 times the price someone else does simply because your car costs more ?

  • by serviscope_minor (664417) on Thursday November 01, 2012 @02:51PM (#41844961) Journal

    But I am sure Motorola's counter of a percentage based on device cost is NOT fair.

    Why is it not fair? If anything it's fairer than a fixed fee.

    A fixed fee would block out cheap devices, like dumb phones and cheap cellular attached random bits of kit. If anything having a percentage is fairer since it allows the patent holder to make some money while not forcing the market exclusively into high cost devices.

  • Re:Is $2.25 FRAND? (Score:4, Insightful)

    by medcalf (68293) on Thursday November 01, 2012 @02:52PM (#41844969) Homepage
    But aren't you just assuming that 2.25% is FRAND, rather than a sweetheart deal? Yeah, odds are $1 per device, especially just devices going forward, is way too low, but why is 2.25% way too high? If you think about it, if there are 10 companies with standards-essential patents, and each charges 2.25%, then that's 22.5% of the device's post-profit cost, which seems rather high. Also, I believe that there are way more than 10 companies that own patents that are essential to cell phone standards.
  • by XaXXon (202882) <xaxxonNO@SPAMgmail.com> on Thursday November 01, 2012 @02:52PM (#41844971) Homepage

    Let's get to the point where no one can make a phone anymore. That seems to be the only way we'll see the patent system get reformed.

  • by jo_ham (604554) <(moc.liamg) (ta) (999mahoj)> on Thursday November 01, 2012 @02:54PM (#41845015)

    Actually, given that they are FRAND patents, Apple should pay (by the rules stipulated in the FRAND terms) the same rate that everyone else paid for those patents. No more, no less.

    Whatever that figure is, that is what Apple should pay.

  • by RocketRabbit (830691) on Thursday November 01, 2012 @02:57PM (#41845055)

    Yes, this is a typical response, exactly what I expected. I'm glad to see that I'm not going to be disappointed in this thread!

    Pray tell, doesn't this go against Google's pledge to "only use patents defensively" which I often hear quoted here? Is it OK to abandon another one of your principles (Don't Be Evil was clearly just something that you repeated to suckers) when it suits you?

  • by Zak3056 (69287) on Thursday November 01, 2012 @02:59PM (#41845079) Journal

    Google has yet to bring a product to market that the market really wants.

    If I may quote Monty Python's 'Life of Brian': "All right, but apart from the sanitation, medicine, education, wine, public order, irrigation, roads, the fresh water system and public health, what have the Romans ever done for us? "

    Honestly, if you can't find anything that Google has brought to the table that the market "really wants" you just aren't paying attention.

  • Apple's Fault (Score:5, Insightful)

    by oGMo (379) on Thursday November 01, 2012 @03:05PM (#41845167)

    Apple chose to use the "nuclear option," and have no-one to blame but themselves. These things are typically settled reasonably ... compare patent stacks, few pennies go to the one with the taller stack. But no, Apple has shown they don't play nice. Everyone with any sense will be hostile toward Apple. Prisoner's Dilemma [wikipedia.org], basically, except everyone knows ahead of time that Apple defects.

    Apple can't win this way in the long run. They may have a big pile of cash, but if everything they want to do suddenly gets nickel-and-dimed, they'll find that only goes so far.

  • by h4rr4r (612664) on Thursday November 01, 2012 @03:05PM (#41845173)

    You mean attacking those who attack you is not defense?

    Should they just take it?

    Besides this is motorola pursuing a lawsuit that started before Google bought them.

  • Re:Bad faith (Score:2, Insightful)

    by Anonymous Coward on Thursday November 01, 2012 @03:06PM (#41845187)

    Who says they're unreasonable? Maybe Moto's demands are...

    So it's unreasonable for moto to want payments for devices that have been sold in the past which used these patents, when apple admit the patents are valid but they don't have a licence for them. Perhaps apple should do the same then, and say that anything with infringed on any of their patents in the past does not matter, only stuff going forward from now.

  • by JDG1980 (2438906) on Thursday November 01, 2012 @03:11PM (#41845243)

    Apple really seems to have been going out of its way to piss off courts recently. First the event in Britain where they basically thumbed their nose at the Appeals Court and defied their order about posting the apology. Now they're pre-emptively threatening the court in Wisconsin, saying that if they don't get what they want, they are going to go all-out with appeals. While judges know their decisions are subject to appeal, they very much do not like being publicly threatened in such a manner by litigants, especially while the trial is still going on. I think they may have bought themselves a world of pain with this verdict when it finally comes. And appeals courts will be all the more likely to look at Apple's filings with a skeptical eye now that they've already told all the world they are doing it as part of a hardball business strategy.

  • Re:Is $2.25 FRAND? (Score:5, Insightful)

    by iserlohn (49556) on Thursday November 01, 2012 @03:13PM (#41845277) Homepage

    Two words: Cross-licensing.

    Apple refuses to do it. Everyone else does. That's why we're here discussing this at all.

  • by Lithdren (605362) on Thursday November 01, 2012 @03:16PM (#41845311)
    ...and Apple has already said they will not pay what everyone else pays.

    Everyone else goes into a cross-liscence instead of paying actual money per device, Apple has already refused to do this.

    What I find interesting is Apple feels that paying 1 dollar per device MOVING FORWARD is somehow a fair price. I could see an argument that 2.25% of the total value of a phone is too high, but clearly what Apple offers is absurdly low. They then threaten to drag out legal procedings if it goes to court if they are to pay anything more than what they've already demanded.

    Even if it was a huge loss to the company, i'd want to nail them to a tree for that alone, you let one company push you around like that suddenly everyone else can now opt for the same. I dont really see the point, all Apple is doing is forcing this to go to court, and any court with an ounce of brainpower will find Apple is not being fair, regardless of what the other side is offering at this point.

    The fact that I dont understand the play they're making makes me worry we're not being told something, whatever that is Apple feels its in their favor. That, or they're just a bunch of idiots, which can never be ruled out, for either side.
  • Re:Bad faith (Score:2, Insightful)

    by GodInHell (258915) on Thursday November 01, 2012 @03:17PM (#41845325) Homepage
    There's nothing wrong with using the cost and length of litigation as a club against an opponent at the negotiating table. Particularly when both sides have deep pockets and the case is likely to include a mid sized six-figure litigation budget (if not more). That is reality. There's also the advantage of "less money now is worth more than more money later" cash in hand that goes immediately into the till is a very useful thing. A prospect of cash eventually *if* you win, much less so.

    The money side of this is pretty ballsy though "hey, yeah, we just went after Samsung for every dollar they ever made on devices we think are infringing, but you only get going forward cash." That's a bad deal -- but that doesn't mean it's bad faith.

    All the same, I hope Moogle rejects the offer and goes for the jugular.
  • by fm6 (162816) on Thursday November 01, 2012 @03:23PM (#41845419) Homepage Journal

    Perhaps I've missed some unneighborliness on Google's part, but from what I've seen they've just been defending themselves against a childish vendetta [networkworld.com]. Now that Apple is motivated by honest commercialism instead of Jobsian tantrums, we'll see fewer monetary conflagrations.

  • by Nyder (754090) on Thursday November 01, 2012 @03:34PM (#41845587) Journal

    Then we could say ya, we downloaded your songs illegally, and from this day forward, if we do it, we'll pay you $1 per song.

  • by jo_ham (604554) <(moc.liamg) (ta) (999mahoj)> on Thursday November 01, 2012 @03:38PM (#41845643)

    ...and Apple has already said they will not pay what everyone else pays.

    Everyone else goes into a cross-liscence instead of paying actual money per device, Apple has already refused to do this.

    As is their right. They have no obligation to cross licence, merely to pay what everyone else paid as a dollar amount, or in chickens or barrels of grain to the same value, or anything else you can barter with.

    What people seem to be thinking, however, is that because Apple doesn't want to cross licence they seem to believe that means they are "refusing" to licence the patents - they simply want to pay a different way, and given that they have 100 billion in cash sitting in the bank and they jealously guard their own IP, it's no surprise that they want to pay cash.

  • by rtfa-troll (1340807) on Thursday November 01, 2012 @03:41PM (#41845677)
    The crucial thing to remember is that the other companies that are getting cheaper deals are entering into full reciprocal patent sharing deals with Motorola. Often even one sided (Motorola gets all their patents; they get cheap access to the RAND patents). This is worth plenty and so Apple is completely outrageous to even think they should get a similar price without making a similar offer.
  • by hahn (101816) on Thursday November 01, 2012 @03:45PM (#41845733) Homepage

    I would love to see Google block Apple from their search results and all of their services, but we both know that's not going to happen.

    And give Bing a foot in the door with a couple of hundred million iOS devices? That'd be like trying to hurt someone by punching yourself in the face.

  • Re:Bad faith (Score:5, Insightful)

    by dyingtolive (1393037) <brad.arnett@notf ... g ['hir' in gap]> on Thursday November 01, 2012 @03:47PM (#41845761)
    I'm feeding the troll here, sure, but the usual stand is acknowledgement that patents can have a purpose, but that patents on software and design are usually bullshit. There is occasionally grumbling at this point that patents in general get handed out way to easily, ignore prior art, and are generally misused.

    I believe in this case, most of the rooting for Google/Motorola seems to be around the other classic slashdot principle: Maligned sense of unequivical justice. In this case, it's hard not to smile when you hear that the bully got their comeuppance.
  • by Zemran (3101) on Thursday November 01, 2012 @03:51PM (#41845841) Homepage Journal

    Given the way M$ are still battling out the browser case, I can only assume that you mean "immediately" in a tectonic time scale and "convicted" in a slap on the back of the wrists and asked politely not to do it again way...

  • by erroneus (253617) on Thursday November 01, 2012 @03:53PM (#41845881) Homepage

    That's using one market where Google has dominance and using it to affect another market. Microsoft got into a lot of trouble because of that. Google isn't likely to do that.

    I predict Google will let it get dragged out and will make it as painful as possible for Apple.

    Meanwhile, Google will continue its assault on Carriers' Customer Expectations by offering great prices on non-subsidized, unlocked devices. Google is changing some games. They won't need to fight too hard to defeat Apple. They just need to wear them out... and they can. There is an Army of Android device makers just WAITING for the opportunity to make the next Google Nexus devices. As we just saw, ASUS was having some trouble until it made the Nexus 7. Will HTC who is on the brink of death receive the next breath of life from Google? Possibly.

    The point is that "open" and "free" (as in freedom) devices will quickly win the people over. They KNOW they are being tethered to Apple's way. They will soon lose out.

    Apple's a big powerful badass. But Google is like a giant zen buddhist statue. It ain't going anywhere.

  • by JDG1980 (2438906) on Thursday November 01, 2012 @03:54PM (#41845893)

    As is their right. They have no obligation to cross licence, merely to pay what everyone else paid as a dollar amount, or in chickens or barrels of grain to the same value, or anything else you can barter with.

    Says who? FRAND means everyone is entitled to the same terms. If the terms include cross-licensing, why shouldn't Apple be held to the same rules as everyone else?

    And Apple is asking for even more of a break than that. Not only do they want to get a free pass on all past devices (and only have to pay going forward), but they want to pay a very low cash rate AND no cross-licensing. Even if we accept your premise that Motorola should have to accept a cash equivalent for cross-licensing, that's going to come to something much closer to Motorola's proposed 2.25% than to Apple's $1 per device. Bottom line is that Apple thinks they're special and that the rules shouldn't apply to them.

  • Re:Bad faith (Score:5, Insightful)

    by Theaetetus (590071) <theaetetus.slash ... .com minus distr> on Thursday November 01, 2012 @03:54PM (#41845895) Homepage Journal

    Who says they're unreasonable? Maybe Moto's demands are...

    Realizing that apple is offering quite a bit less then even half a pecent, and while recognizing that the patents are valid they refuse to be responsible for the past, it doesn't take much sanity to see Apple is trying to leverage the threat of a long drawn out lawsuit to avoid paying for their past infringement.

    But they're not recognizing that the patents are valid... I'm sure they're even saying "we believe the patents are invalid but will pay you $1 per device to go away." In fact, under the Federal Rules of Evidence, settlement offers can't be used as evidence of liability, precisely because they want to encourage this sort of non-liability admitting settlements that make suits go away.

  • by SEE (7681) on Thursday November 01, 2012 @03:56PM (#41845907) Homepage

    You're linking hack propagandist Florian Mueller? Are you trying to discredit yourself?

  • by Bobfrankly1 (1043848) on Thursday November 01, 2012 @03:57PM (#41845925)

    Because so far, Apple has been perfecting willing to pay for FRAND related patent use, but not willing to pay way more than other companies who also licence the same technology which is what Motorola has been demanding.

    By perfectly willing, you of course mean willing to make a lowball offer in an attempt to avoid being found guilty of willful infringement (or whichever the proper terming would be here). Of course, neither of us have actual numbers to compare either companies offer to, but this does show your eagerness to paint Apple in a favorable light.

    The judge has ALREADY realized Motorola has possibly been trying to do exactly that [fosspatents.com].

    Nice phrasing. Attempting to make it appear as if Motorola is already guilty while not technically saying anything incorrect. You should work in politics. Of course you are digging heavily into "maybes", as nothing has been decided in that case, outside of the Judge deciding to look into it.

  • by RobbieCrash (834439) * on Thursday November 01, 2012 @04:08PM (#41846077)

    The F part comes from cross licensing deals to make things fair. Apple has no standards-essential patents that are being requested, so there's no cross licensing for those items.

    Apple's patents, since not FRAND-eligible, aren't being offered at reasonable rates. If I have a deal that I can use my neighbour's pool if they can use my trampoline, that's FRAND. But if you want to use my trampoline and tell me I'm not allowed to play in your tree fort because the FRAND deal is only applicable to ground constructs, then fuck you, pay me $10 to use my trampoline.

  • by viperidaenz (2515578) on Thursday November 01, 2012 @04:22PM (#41846251)
    So Motorola is trying to charge Apple what they were charging Microsoft? How is that "way more than other companies who also license the same technology"?
  • by Coolhand2120 (1001761) on Thursday November 01, 2012 @04:25PM (#41846281)
    The big difference is that MotoGoog is suing for hardware patents and not some worthless software UI patents that should have never existed in the first place. Hardware takes tens of millions of man hours and just as many dollars to develop over the course of many years. Software UI takes 1 guy about 1 day and doesn't even rise to the level of something that should be patented. The only reason software UI gets patents is because of very, very stupid patent clerks (where's Einstein when we need him!?). Furthermore, Apple brought this on themselves for trying to block their competition through the courts. If it was any other company I would say shame on Google. But because it's Apple I say beat them until the candy comes out.

    Apropos Apples misuse of FRAND hardware started before Google acquired Motorola. Apple offered to trade its (now proven) worthless UI patents for licensing of the FRAND hardware and was turned down by Motorola, who wanted licensing fees. Of course they refused to give a dime to Motorola and used the patented hardware anyway. IMO Apple should be charged at the going rate for these FRAND patent licences but with a puinitive muliplier of *5-*10 retoroactivly for beliveing that they are above the law. Above the very law they attempted to use to squash their comitition in court. In this case, Google is "Do[ing] No Evil". It's more like The Hulk beating the shit out of Loki. Totally justified and righteous.
  • Re:Bad faith (Score:3, Insightful)

    by tgibbs (83782) on Thursday November 01, 2012 @04:49PM (#41846559)

    These are in line with typical licensing fees for other FRAND patents. Remember, in order to get its patent approved as standard essential (an thus gain monopoly access to a captive market) a company commits to license that patent at a "fair, reasonable, and non-discriminatory rate."

  • not at all (Score:5, Insightful)

    by poetmatt (793785) on Thursday November 01, 2012 @04:56PM (#41846621) Journal

    Actually, apple is now screwed.
    Their entire case on the west coast was predicated on "we were harmed by their unreasonable terms" Apple quite literally just gave the judge evidence of the exact opposite of their claims in court, by now making a FRand offer. House of cards -> fallen apart.

    Google doesn't need to block apple, nor will they. They also don't have to accept this offer from Apple. This also won't resolve any of apple's past infringement, should that part of this process move forward. However, this shows one thing right away: apple is now fucked, and no longer the aggressor in the situation. Not that it's much of a surprise considering they're losing in every court on the planet.

  • by dreamchaser (49529) on Thursday November 01, 2012 @05:33PM (#41847011) Homepage Journal

    I didn't really see any fanboyism in the parent post. More like realism.

  • by Scowler (667000) on Thursday November 01, 2012 @05:53PM (#41847199)

    That's using one market where Google has dominance and using it to affect another market. Microsoft got into a lot of trouble because of that. Google isn't likely to do that.

    There are already whispers that US anti-trust agencies are examing Google's present market behavior.

    I predict Google will let it get dragged out and will make it as painful as possible for Apple.

    I predict that Google is seeking to maximize its revenue opportunities here, same as any corporation would do.

    Meanwhile, Google will continue its assault on Carriers' Customer Expectations by offering great prices on non-subsidized, unlocked devices. Google is changing some games. They won't need to fight too hard to defeat Apple. They just need to wear them out... and they can.

    Most Android phones being sold now are using standard carrier plans and subsidizing.

    There is an Army of Android device makers just WAITING for the opportunity to make the next Google Nexus devices. As we just saw, ASUS was having some trouble until it made the Nexus 7. Will HTC who is on the brink of death receive the next breath of life from Google? Possibly.

    At some point, Google will need to justify that $8 billion spent on Motorola Mobility, especially as their revenue growth continues to slow.

    The point is that "open" and "free" (as in freedom) devices will quickly win the people over. They KNOW they are being tethered to Apple's way. They will soon lose out.

    I'm pretty confident that most people decide on a phone by comparing actual features and prices. But I'm no credentialed expert on the matter.

    Apple's a big powerful badass. But Google is like a giant zen buddhist statue. It ain't going anywhere.

    Funny, I thought the two of them were both Fortune 500 corporations.

  • by shutdown -p now (807394) on Thursday November 01, 2012 @06:41PM (#41847723) Journal

    IIRC, 2.25% has been the ongoing rate. The only reason why other companies haven't paid as much is because they've cross-licensed their patents to Moto instead, and that is not exactly a free service. Apple is unwilling to cross-license (or rather they claim that their patents are worth a ridiculous amount that Moto disagrees with), and so Moto wants to charge them the baseline 2.25% fee. Seems perfectly fair to me.

  • by DeadCatX2 (950953) on Thursday November 01, 2012 @06:54PM (#41847883) Journal

    Well, Apple could always do what EVERY OTHER MANUFACTURER DOES and cross-license their patents in order to get a lower royalty rate.

  • by vux984 (928602) on Thursday November 01, 2012 @07:00PM (#41847947)

    You *NEED* FRAND patents to make a smart phone.

    Then perhaps they are worth more than a dollar, to the maker of a $500+ phone that incorporates them and can't exist without them.

  • Car Analogy (Score:5, Insightful)

    by ninetyninebottles (2174630) on Thursday November 01, 2012 @10:24PM (#41849551)

    A lot of people seem wrongheaded about FRAND patents and I think it is because they are trying to justify pre-existing beliefs born of like or dislike of one of the litigants involved in this case. So lets just talk about FRAND in general terms using current developments in the auto industry.

    Electric cars, the next big thing and they need to be able to charge the batteries. So, having many different connectors is inefficient and a standard for plugs is needed if we're ever going to build out infrastructure. But wait there are many ways to do it and many companies that already have patents on lots of potential solutions. Should we:

    • Refuse to base the standard on any patented technology at all even if it makes the systems worse.
    • Base it on existing, patented technologies resulting in a better standard technologically, but make sure any patents required to implement the new standard are licenses FRAND such that any auto company for a small fee can make electric cars that comply with the standard?

    Generally, because it is industry players, we go with the second option, but does that mean auto-makers that were not making electric cars at the time the standard was made and who don't have patents involved in the standard should be forever frozen out of the market? Does that mean no new car companies will ever be allowed into the market? Because to make a new charging standard there are likely hundreds of patents and even if each one only demands .5% of the sale price of a vehicle, that quickly adds up to 100% for all companies that don't have patents in the pool. Does anyone here think that is reasonable for a standard or in any way good for innovation or society as a whole?

    Standards are supposed to be about collaboration and reducing just this kind of bullshit and FRAND licensing is a necessary part of that, which is why you aren't allowed to price things discriminatorily in the first place. Google/Motorola is free to license or not license any non-FRAND patents to Apple or anyone else and charge any rate they damn well please. Apple is likewise free to license or not license any non-FRAND patents they damn well please. People conflating the two issues are missing the point and are cheering on abuse of the standard creation process and the end of the ability of any upstart company to engage in using standards. It's cheering on forcing the industry into stagnation and preventing the competitive marketplace and consumers from determining what is the best device... but maybe that's secretly what some people want. They don't want competition to result in the best product. They just want their "team" to win so they feel better about their purchase. Shame.

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