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back to article Yet another iPhone patent lawsuit

A Luxembourg company called Core Wireless has launched a patent lawsuit against Apple, claiming that its patents, which cover communication protocols, are breached by any device that uses 2G, 3G or 4G standards. The suit, which was filed in the Eastern Texas District on February 29 before Justice Leonard Davis, is based on a …

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So, if it covers protocols, it's likely going to have to be FRAND, right?

(puts tin helmet on and waits for the invasion of downvoters)

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But Apple doesn't even want to pay FRAND, they want to pay less. That was the issue Nokia had. Apple refused to pay, so Nokia doubled the price and sued them. Apple went on to say that Nokia wanted double what what everyone else is paying. Apple could have had the same price but they refused to it. If anything, why was Apple going to the patent holders before the iPhone was released? They knew they were going to need them, why wait until they start calling before trying to make a deal. Once you use the patent without asking first, why would anyone want to make a sweet deal for the other side?

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Trollface

Well FRAND in EU or RAND in the USA, same difference but yep.

Pretty soon one of these fuckers is going to get schooled about getting a monopoly under F/AND means you have to live up to your agreement not to abuse the monopoly. I'd guess that will be Motorola in the EU & USA. Motorola seem to be under a "no settle" deal while Google buys them, which is bad as under EU anti-competition laws IIRC you can get fined 10% of global sales. Of course Google can take the hit as well as whatever the US AG dishes out but still thats a distraction for management on a gambit that only the rabid or ignorant thought would work.

There are a few things covered by F/RAND, all computer memory, DVD, Blue Ray, BAB, HD TV and cable and satellite, WI-Fi, blue-tooth, every fucking mobile phone using 2G/3G or LTE and thats just the easy to remember stuff. If anyone is allowed to break F/RAND, everyone but the lawyers gets fucked.

In fact it's even worse as being allowed to break F/RAND means that contract law even with the state no longer exists.

Now in case anyone wonders why Samsung, already under investigation in the EU over FRAND abuse is likely to get off (maybe a nominal fine) unlike Motorola, it's because they have shareholders who aren't about to get a golden parachute from a company who's CEO had to be told why authors don't give their books away for free (anyone have the el reg link explaining that it cost's money to wright a book?). Or to put it another way, they can't say "fuck it, we will all make out like bandits".

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Silver badge
Flame

Things have taken an even more dangerous turn in recent years.

What we have seen develop over the last decade or so is a trade in patents as financial instruments independent of their original intention. In much the same way that we saw mortgages in the US market become traded as commodities that were to all practical intents and purposes independent of the original purpose of the loan, we now see patents traded in as financial papers. The result is that we have a sort of Frankenstein's monster of speculative buy and selling with no relation to the purpose. Patent law must be reformed and this spiv's market dismantled.

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Happy

@Lance 3

Nokia tried for about 3 times FRAND not double, Apple said NO, if you look at the payment and divide it by the phones, it's clear Nokia & Apple settled on a FRAND, not sure if interest was paid but the whole dispute was about the amount of money Apple had to pay Nokia. Apple stated in court that they had to pay Nokia a fee but they argued that the fee Nokia asked was against FRAND, same thing they are doing with Samsung and Motorola. OK its a bit more complex than that but both companies are saying, "you have given us a monopoly and we have agreed to treat everyone the same but now you should allow us to change our mind".

Given the price of iPhones i think it is clear that Apple can afford the FRAND fee. Also we see that the US and EU are talking and looking into the actions of Motorola and Samsung over FRAND but not Apple.

As to your question about why Apple was going to the patent holders first, you just contradicted yourself by saying they went after so i should ignore your question. However, i will give my opinion. I will guess that Apple had some lawyers that were competent and said "it's a FRAND licence, we can work it out, we will speak to them".

Anyway, it doesn't matter, abuse of FRAND will never be allowed in any country that cares about the rule of law. Apple will win not because they make "shiny things for idiots who don't like freedom" but because if you can't trust that someone else must live up to their word, then you can't make a deal.

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Unhappy

Re: Things have taken an even more dangerous turn in recent years.

I don't think trading is bad, the real problem is that at the moment most Patents are invalid as granted.

Of course we must remember that the original reason for patent law (not monopoly grant such as the East Indian Company) was to limit trade to the detriment of the people within the nation that the patent was granted. That is, Modern patent law was designed to limit competition for the benefit of the few at the cost of the many. I believe Adam Smith had something to say about that.

Same with copyright, can anyone explain why if i cure cancer i get to make money for 20 years before competition but if while curing cancer i make a file about it, you have to wait 100-200 years (remember i cured cancer) before you can copy it!

I guess what I'm saying is, you are wrong, trading is not bad, the idea that you can own an idea is bad. What's even worse is that if someone else comes up with the same idea and tries to implement it, they go to jail or get arse raped in court.

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@a_been

Nokia tried FRAND first and Apple rejected it. So that is when Nokia increased for punitive reasons. Apple can say all they want about FRAND, but they steal the technology first and then fight when the patent holder comes after them. The fact is, Apple didn't want to pay FRAND rates. You couldn't use what Apple was stating as they may it sound like they were the good guy and Apple were using figures to confuse the issue. The next fact, Apple was not paying FRAND for patents they new they were using. The iPhone was released on 2007 and Nokia filed suit in 2009. How come Apple was not paying for those patents from day one?

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Anonymous Coward

Apple are quite willing to pay under FRAND agreements. What they are not prepared to pay is more than someone else under the same agreement which is what Motorola are trying to make them do.

They are also not willing to pay twice which is what Samsung are trying to make them do over the Qualcom chips.

This is an over simplification, but it's the situation in a nutshell.

Samsung is under investigation by the EU for FRAND abuse, Motorola has been threatened with investigation for the same thing.

(Please note, I am replying to the comment, not the article)

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Re: Things have taken an even more dangerous turn in recent years.

It's the same as copywrite, something intended to protect the creator and ensure that they benefited from their work, now twisted into yet another money-making scam for the big businesses.

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Gold badge

So a business should always accept a quote they are given? businessmen generally negotiate deals.

If you're going to sue anyone you sue the company making the most money. This is why they're patent enemy number 1. I imagine there are tons of other companies infringing, they're just not big enough to bother with.

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Re: @Lance 3

I can afford many things, doesn't mean I would accept a poor deal. You always try to get something at a good price, the thing with patents it you can't shop around. It is a monopoly position and hence why you have to haggle.

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Anonymous Coward

Re: Lance 3, Re: @a_been

" The fact is, Apple didn't want to pay FRAND rates. "

Have you got this" fact" in writing?

Or are you just imagining it (like many of the facts that get mentioned here)?

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Re: Things have taken an even more dangerous turn in recent years.

@a_been:

"Of course we must remember that the original reason for patent law... was to limit trade to the detriment of the people within the nation that the patent was granted."

AFAIK, this was not the original purpose.

From what I have read, the reason for patents was to encourage the disclosure of new ideas while protecting the person who came up with the idea.

In order to get a patent, the idea must be published with detailed descriptions of how it works. The knowledge is therefore spread, while the patent holder is able to monetise their idea through the protection of the patent. Anyone can then use the idea in the patent to develop it further, or encorporate it in another idea, hence advancing human knowledge, but they must negotiate with the original patent holder to actually use it.

In a world without patents, any new idea would be produced as a black box, or would be copied as soon as it was released. Human advancement would be held back because either knowledge would not be spread or many people would not bother to develop as they would not be able to make money from it.

The bad part in patents, IMHO, is that companies can own them and trade them. Also people do not have to use them. I believe all patents should have to be held by the individual who had the idea, they should not be traded (licensing is fine), and there should be an invalidation on non-use within a certain timeframe.

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Facepalm

Re: Things have taken an even more dangerous turn in recent years.

<blockquote>"From what I have read, the reason for patents was to encourage the disclosure of new ideas while protecting the person who came up with the idea."</blockquote>

That's half right. Actually the original way you got a patent was actually present a physical invention to the patent office - not just an idea - in order to obtain the *right to prevent* someone from copying.

<blockquote>"Human advancement would be held back because either knowledge would not be spread or many people would not bother to develop as they would not be able to make money from it."</blockquote>

That's right, because nothing was invented before the 14th Century AD. We all just sort of bumbled around completely naked (no-one had invented clothes yet) eating whatever grew on trees (no-one had invented hunting tools yet). People had some amazing ideas back then, but they couldn't invent anything because they knew as soon as they did, some pirate would come along and copy it, causing the invention to have widespread adoption and advancing society, without them getting paid at all!

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Silver badge

Re: Things have taken an even more dangerous turn in recent years.

"That's right, because nothing was invented before the 14th Century AD."

OK, sorry, I get your point.

What I meant was that it provides an extra incentive to advance. Obviously people will still invent, but there is a greater encouragement to invent AND share the knowledge if you have protection from others copying it.

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Devil

Microsoft has been trying to paint itself as a patent “good guy”.

Splutter.

How much more than the $5 per Android handset they extort would it be if they behaved otherwise?

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FAIL

Re: Microsoft has been trying to paint itself as a patent “good guy”.

Samsung are fighting Apple all over the world over patents over Android but are paying Microsoft to license patents over Android. At the current cash build up for Apple they could buy Microsoft for cash within 12-18 months. I'm gonna take a wild guess here and assume that Microsoft has some valid patents.

Why was mentioning the cash important? Because Apple could buy Samsung now and just say they would drop the Samsung smart phone business to get government approval. If Samsung aren't afraid of Apple, they sure as hell aren't afraid of Microsoft.

Also, anyone thinking that Samsung makes Win?????? phones and so needs Microsoft, fuck that. The carriers hate Microsoft more than Apple (they don't like iMessage but can live with it), WinPhone 8 is DOA because Microsoft bought Skype. Carrier profits are around 40/30/20/10 international talk/talk/messaging/everything else.

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Anonymous Coward

Re: Microsoft has been trying to paint itself as a patent “good guy”.

Microsoft - valid patents?

Have you read some of the documents presented by Barnes & Noble in their case against the abuse of patents Microsoft is trying to employ?

As for 'Microsoft has been trying to paint itself as a patent “good guy”'...Was this before or after they threatened Linux that they were breaching a load of undisclosed patents, or around the time they were setting up patent pools to fight FOSS, or maybe they are trying to paint themselves as the good guys by just handing over the dirty court room work to a third party to sue them - therefore avoiding an immediate countersuit.

They are doing a damn poor job of painting themselves as any kind of "good guy".

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Anonymous Coward

perhaps

I wonder that the only thing that will happen in all of these patent wars is that the lawyers doing all this suing will wind up owning the smart phone industry?

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Who cares?

Have Apple finally begun to realise that they may have spawned a monster? At one time it must have looked like a really good idea to use the law and patents to try and bludgeon their competitors into silence and preserve their grip on the market.

Now, anyone with a patent and reasonably competent lawyer is looking at Apple and wondering if they've got a chance, death by thousand cuts.

Frankly, if this continues for another 10 years I expect all technological progress to have halted. Which isn't what anyone wanted or intended, but it's about right for the fucked up world we currently have. It would be funny if our fellow human beings (who have as much to lose as the rest of us) hadn't done it to us.

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Bronze badge

What kind of deal was that?

“Last year, Nokia sold patents to Mosaid. We paid for a license to those patents. As part of that transaction, we also received a passive financial interest in future revenue generated by Mosaid from the licensing of those patents to others,” a Microsoft spokesperson told El Reg.®

That's a strange-sounding deal, to me. They buy milk from Mosaid... and when anyone else buys milk from Mosaid, Microsoft gets its share of the money. Cows don't usually work like that.

It sounds kind of like a Ponzi scheme instead, but I assume that it isn't.

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Silver badge

Re: What kind of deal was that?

Yes, it does sound very strange. Without looking at it in detail, the only explanation I can think of is that Microsoft had some kind of IP input into the patent when it was first granted; or did own an interest in the patents at one time but has sold them on with a 'percentage of future yield' condition attached to the sale.

(I know it sounds weird, but stranger sounding things happen in the financial instruments markets).

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Anonymous Coward

Re: What kind of deal was that?

Not really that strange. Microsoft don't have to muddy their name by fighting a patent claim, while at the same time don't have to take on the expense and risk of fighting a long drawn out court case. They also avoid being countersued directly back and have to run their case as prosecution and defense. They also stop the patents being sold on to someone else and used against themselves.

In all other ways just look at it as Microsoft & Nokia employing a third party to sue on their behalf to minimise the risk but still reap the rewards. In fact the monetry reward probably isn't even the biggest goal - it's the disruption to Android and now Apple that is probably a greater aim.

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Silver badge

Re: What kind of deal was that?

A common outcome of patent disputes is that both parties agree a cross-licence. Usually this is because Party A claims infringment of Patent X, then as a defence party B claims that X infringes their Patent Y. The only way that both parties can walk out of court without admitting to being complete bareface liars is to agree that each should licence the other's patents.

Such a situation may have resulted in some of Microsoft's patents being added to the pool that Nokia already held, and becoming prerequisites for licencing some of the Nokia patents (if the court found that the MS patent was required for Nokia's, then anyone licencing Nokia's patent must also licence Microsoft's). A consequence of this is that future licencees of the Nokia pile will also be indirectly paying Microsoft a smaller licence fee.

This is why most industry standards end up with a single-licence patent pool.. the alternative is an O(N^2) mess of licencing agreements.

Or, alternatively: A decade ago, Microsoft decided that in the future it would hire Macromedia's CEO, promote him to head of Office products, and then, somehow, engineer the failure of Nokia's smartphone portfolio (work with me here.. it's obviously because they bankrolled Samsung into working closely with US mobile carriers to push Symbian out of the US market), and then in a final coup de grace, have their man installed as the head of Nokia so that they could gain an extra 4c a handset in revenue from an obscure patent.

And all this from the company that could plan a new OS release so badly that it was half a decade late. Don't be a fool - anyone with half a brain will realise that Microsoft is just a front. Back in the mid seventies, see, the CIA approached this smart kid in Washington state...

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Anonymous Coward

To sum up the article...

MS gets their guy into Nokia

Nokia gives MS a sweetheart deal

Nokia (for all intents and purposes) leases patents to patent troll

Patent troll sues Apple

MS gets a cut if patent troll wins

MS issues statement that the cut they get is just a coincidence

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Trollface

"Eastern Texas District" -- wow, how credible!

Patent troll is patently obvious.

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Devil

How does FRAND work for a 3rd party

Maybe I'm misunderstanding the whole thing, but my reading is that the patents have been sold to a 3rd party (Core) with no interest in cellular technology, albeit with the original patent holders taking a cut (but having relinquished control).

So how does FRAND work here?

- Where is the requirement that Core need to apply FRAND - they have not signed any agreements on patent licencing as part of the ETSI or GSMA standards process.

- Was there a requirement in the ETSI or GSMA FRAND licencing agreement that required FRAND to be continued to be applied by anyone who bought the patents?

In short - can a 3rd party who has bought the patents claim that they were not party to any FRAND agreements and hold the whole cellular industry at gunpoint?

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Silver badge

Re: How does FRAND work for a 3rd party

Interesting question.

I would guess it is part of the standards process, like the FRAND requirement, that FRAND transfers on sale, but I don't know for certain. It would seem bonkers that such a clause wasn't there.

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Anonymous Coward

Mosaid

What a relief! I thought it said Mossad.

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FAIL

Texas

Texas --> weak case --> troll --> longer term failure

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