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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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  • At last an offer. (Score:2, Flamebait)

    by symbolset (646467) *
    Now negotiations can begin. The negotiations will be short.
    • 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.

  • Bad faith (Score:5, Interesting)

    by AmiMoJo (196126) * <mojo@@@world3...net> on Thursday November 01, 2012 @02:39PM (#41844813) Homepage

    By not negotiating in good faith Apple seems to be setting itself up to lose badly in court. Surely any court will look at Apple's demands as unreasonable, given that they back them up with the threat of a protracted legal process costing tens if not hundreds of millions of dollars.

    • 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.

    • Re: (Score:3, Insightful)

      by tgibbs (83782)

      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."

  • Is $2.25 FRAND? (Score:3, Informative)

    by serviscope_minor (664417) on Thursday November 01, 2012 @02:41PM (#41844825) Journal

    If $2.25 is simimar to what they have licensed it to others for, then Apple will have a hard job arguing that it isn't FRAND, and therefore that Moto shouldn't be allowed to enforce the patents.

    I'm also fairly sure that FRAND doesn't mean that you're free to infringe until you get caught.

    Anyway, bad as patents seem to be I'd love to see Apple get absoloutely battered because of patent infringements, because they insist on doing it to others. Hoist on their own petard and all.

    Perhaps it will convince them to divert their lobbying power to removing patents.

    Just kidding!

    • by colesw (951825)
      Not $2.25, 2.25% ... probably makes a bit more of a difference :)
    • Re:Is $2.25 FRAND? (Score:4, Informative)

      by JDG1980 (2438906) on Thursday November 01, 2012 @03:01PM (#41845121)

      My understanding is that most other companies who use these patents opted to do some sort of cross-licensing agreement rather than paying cash on the barrelhead. Since Apple refuses to do that, it could make it tricky to figure out exactly what they should owe, even if the patents are found to be covered by FRAND principles.

  • 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 jo_ham (604554) <joham999&gmail,com> 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 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.
      • by AmiMoJo (196126) * <mojo@@@world3...net> on Thursday November 01, 2012 @03:21PM (#41845377) Homepage

        That would be the 2.5% that Google wants.

        Most companies actually just do a patent licensing exchange with each other for FRAND patents. Apple doesn't have any valuable tech patents that Google wants, and it's design patents are either worthless or they are unwilling to allow anyone else to use them anyway.

        So, Apple has to pay cash. 2.5% of the sale price of every product. On a $500 iPhone that would be $12.50, rather more than they want to pay.

    • by Anubis IV (1279820) on Thursday November 01, 2012 @02:56PM (#41845037)

      The question is whether or not FRAND terms have been offered. Apple claims that the terms they received from Motorola were not in accordance with FRAND principles, and it will seek to demonstrate that is the case in court. If that occurs, Motorola stands to not only lose the licensing fees that Apple would have been paying it, they also stand to get investigated for acting in that way, which could hurt them a whole lot more.

  • 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 firex726 (1188453) <firex726@@@yahoo...com> on Thursday November 01, 2012 @03:01PM (#41845113)

      Mostly everyone was cool, they would sue each other then cross license it all as a settlement.

      It was in part to create a barrier to entry, a newcomer could neither afford the licenses nor have enough clout in their own portfolio to represent a threat.

      Apple basically walked in and launched the nukes by not going along with the established deal. For better or worse, I'm not making a judgment.

    • 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 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 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 XaXXon (202882) <xaxxon&gmail,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 Qwavel (733416) on Thursday November 01, 2012 @03:08PM (#41845209)

      We're a large part of the way there: there are very few companies in the world with sufficient patent arsenal to make a phone.

      Here is a recent NPR podcast:
      http://www.npr.org/blogs/money/2012/10/23/163480928/episode-412-how-to-fix-the-patent-mess [npr.org]

      It mentions the ridiculous number of patents required to make a smartphone (can't remember the number) and the legal impossibility of making arrangement for all those patents.

    • by tgd (2822)

      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.

      Everyone can make phones just fine. But if you're not contributing technology back to the industry (and, thus, have IP to cross license), you don't get to use it for free.

      Apple's not playing by the "rules" -- "rules", wrt patent thickets, that have been the standard operating procedure since the origin of the industrial revolution. We're a country of more than farmers and people supporting farmers precisely because of these IP laws.

      If Apple develops real, valuable, useful technology, then there's nothing to

  • Huge balls (Score:4, Funny)

    by mwvdlee (775178) on Thursday November 01, 2012 @02:52PM (#41844975) Homepage

    Apple sure do have a pair of huge balls.
    One day they'll stumble over 'em.

  • by markhahn (122033) on Thursday November 01, 2012 @03:04PM (#41845151)

    companies are like children, and can't be trusted to play with sharp, pointy objects. actually, it's more like they were digging in the back yard and found a buried mine that happened to be a neutron bomb. they're poking at it with sticks now.

    society created the whole concept of IP, and we need to clean it up now, before it causes more damage.

  • 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.

  • 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.

  • In ten years time.. (Score:5, Interesting)

    by Rexdude (747457) on Thursday November 01, 2012 @06:42PM (#41847739)

    ..I'm guessing that 'The rise and fall of Apple' will make for a compelling Harvard Business Review case study.

  • 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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