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back to article Apple appeals judge's decision to boot out its Moto patent suit

Apple is appealing a US judge's decision to throw out the fruity firm's patent case against Googorola. The case over standards-essential patents (SEP) was expected to set a rate for fair, reasonable and non-discriminatory (FRAND) licences between the firms. The case began on 29 October, 2010, when Apple filed suit against …

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WTF?

I just love Apples we will follow the court unless we don't like the outcome!

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Pirate

Re: follow the court unless we don't like the outcome

and no-one else better try this tactic or we'll sue them

Have you seen the latest application to the USPTO? Apple have applied for a patent on a document (called the "institution") setting out the supreme laws and governing principles of the USA (and therefore the world) and for a methodolgy of changing said document (called "imendments"). Someone objected that there's prior art but Apple claimed that hardly anyone could read that old scrubby bit of paper on the Library of Congress and anyway - it wasn't created in iBooks so it is an illegal infringement of their right to everything.

Oh - and the first ten of the imendments are to be know as the Steve of Rights.

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Should someone perhaps point out to them that the law isn't an open standard in quite the same way that HTML, USB and TCP/IP are, to be followed, modified or "come up with your own proprietry solution" as business dictates?

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Stop

That's just what Samsung are trying at the moment

They lost their patent case and are in the process of appealing. Apple said that they reserved the right to appeal if the rate set was above the amount they thought that it should be, otherwise they would cough up on the spot.

Not a wildly unreasonable position.

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Re: That's just what Samsung are trying at the moment

@Steve Todd: the judge asked them if they would accept a court determined rate. There are only 2 answers, yes or no. They chose no. It's too late to complain that the judge accepted the answer and told them to piss off.

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Re: That's just what Samsung are trying at the moment

Very binary of you. The true answer was "maybe, it depends what the court rules", thats what "reserves the right" means. It DOESNT mean that if the court decided on $1.01 then Apple WILL appeal. The odds would be rather higher at $10 though.

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That's $1 per sale?

Not in total, ever, period.

Just checking.

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Re: That's $1 per sale?

Although I wouldn't be surprised if apple didn't try that one first.

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Megaphone

Re: That's $1 per sale?

"Although I wouldn't be surprised if apple didn't try that one first."

Well, I'd buy that for a dollar!!

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Mushroom

Arrogant

"but it said that it would only be bound by the court's decision if the royalty rate was no higher than $1."

Not many companies can pick and choose which court ruling to follow. They are magical.

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jai
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Re: Arrogant

Not many companies can pick and choose which court ruling to follow.

yes, because Samsung, Google, Microsoft, and any of the other firms who's court cases have been reported here haven't tried to appeal any of the rulings that went against them, did they? Samsung ponied up that $1 billion fine super quick, didn't they?

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Re: Arrogant

you do relize that case is of samsung vs apple is not even done yet? verdict isn't finalized and samsung still has an appeal. So if by chance samsung ends up having to play it won't be for years yet.

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Anonymous Coward

"Not many companies can pick and choose which court ruling to follow. They are magical."

Naive - as if other companies are any different - if they don't like the outcome / fancy their chances they appeal.

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Facepalm

Appealing a decision is very different than claiming that you're not bound by it.

In fact, the very act of appealing a decision implies that you are bound by said decision -- if you're not bound by it, you have no standing to appeal.

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Facepalm

Big mistake

You'd think Apple would be experienced enough in this that they'd make sure the bribes campaign contributions are all paid up before they deliver their demands to the court...

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"as if other companies are any different - if they don't like the outcome / fancy their chances they appeal."

First I've heard of a company refusing to adhere to a ruling if it was over a certain amount before the ruling was handed down. It could almost be seen as intimidation in that context.

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Unhappy

Wishful thinking.

What is the point in any court when the result is inevitably appealed? Can we just not skip to the last court and start there?

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Joke

Re: Wishful thinking.

But then the lawyers would lose millions! We cant have that now can we...

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Anonymous Coward

@Whitter - Re: Wishful thinking.

Not quite so! An appeal gives you a chance to be heard in case your first trial was flawed or the jury/judge biased. The purpose of any appeal up to the supreme court is to make sure you don't get stuck with a sentence without proper due diligence. I'm pretty sure you would not like to find yourself preparing for the electric chair just because the judge did not want to consider some of the evidence of your innocence.

The problem you spotted is that the justice system is being abused, especially by corporations that will use any opportunity to game the system. As opposed to physical persons, they can get away with it so why not doing it ?

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g e
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Happy

Crabb. Apple.

Guffaw

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Apple FRAND Licensing

It is my clear understanding that the US FTC ruled - from their three year investigation - that Google was bound to license their technology under the FRAND process which involves "fair and reasonable" rates.

How then would the FTC turn a blind eye to Apple "demanding" that they will only pay Motorola (now Google) "$1.00" - one dollar - for licensing patents. This is a ridiculous and insulting gesture from Apple, and literally sticks their finger in the eye and anus of Google, The FTC, the Judge in this case or anyone else they see as obstructionist to their world domination.

Has the USA gone mad to allow these guys any stupid, infantile behavior?

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Re: Apple FRAND Licensing

Google has to make an attempt to license the patents under fair and reasonable, But with that said Apple as well has to pay fair and reasonable rates as well. And if apple seems to keep with this 1$ or less bit it could get to a point of request an injunction against apples products since they are not willing to be fair.

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Re: Apple FRAND Licensing

Its not Google but Motorola who Apple were taking to court,

And its because they didn't like the terms Motorola were demanding so took them to court on the dasis the terms weren't FRAND at all.

This case should heve settled it once and for all but Apple decided that thay wouldn't accept the court decision if it wasn't in their favour. However they are still selling goods and not paying for the patents so could end up with a low fee per unit and a big fine for refusal to pay up to now whilst fighting for a refund. Its not like they don't have the cash to spare......

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Stop

Re: Apple FRAND Licensing

The problem is that Motorola have yet to show anyone paying 2.5% of the RRP of an end user device, rather than the components that embody the patents in question (cellular and WiFi). If the world + their uncle pays 2.5% of the cost of a $10 baseband chip then 2.5% of RRP on an iPhone is excessive and not FRAND.

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Anonymous Coward

Re: Apple FRAND Licensing

exactly. a good part of the price of that device is only paid by consumers because of marketing (not due to the real virtues of the device). why should any company pay a percent of the final price for any patent (which includes the marketing plus), unless it's a product that needs no marketing? Apple is not only a hardware company, it's a marketing company as well - it's their merit too.

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Anonymous Coward

Same same

Moto is trying to bust the FRAND system. Fuck moto and their google masters. Moto will lose this in the long run, they cannot win because their position is untenable. ND means non-discriminatory and it is illegal for moto to discriminate. That is the price of having a FRAND patent in the SEP pool.

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Re: Same same

Prove that Moto is trying to discriminate. Seems to me they offer everyone the same terms. Where is your evidence?

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Anonymous Coward

@AC 17:03GMT - Re: Same same

You don't seem to pay any attention to this matter. Motorola made an offer but Apple didn't bother to negotiate. Instead they went directly to court complaining the license is not fair and asking the court to set a price. Now in case you would really pay any attention, you will notice that Microsoft has taken Motorola to court, again without bothering to negotiate or to make any counter-offer and asking to court to set a price for the license.

So the two are doing the same thing against the FRAND system and you come here to tell us Motorola is busting the system ?

FRAND means offer, counter-offer, negotiation, arbitration and finally if all this fails you go to the court. This is not my opinion, it's the FTC that said after the conclusion of their investigation on Google.

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Re: Same same

Where's Motorola's evidence that ANYONE is paying 2.5% of RRP of a complete consumer device?

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@Steve Todd

Why should Motorola divulge the rates that other companies have negotiated, especially when those rates likely include cross-licensing agreements which will affect the price. All Motorola has to do is demonstrate that its beginning negotiations positions has always been 2.5% to all players, a position which - from there - it generally negotiates.

2.5% of the value of the device is the value Motorola intends to see for it's patents. That does not have to be in raw cash. It is often largely compensated for by cross-licenceing, with a little bit of cash on the side. That is fair, reasonable and non discriminatory. Note that FRAND does not mean cheap. It means "everyone who wants access to these patents must be able to licence them" and "everyone who wants access to them has to play by roughly the same rules."

Moto offered Apple a licence, under the same terms it has offered every other company who wanted access to those patents. Rather than negotiate from this starting position, Apple said "up yours" and ran to court, the ITC, and every other body it could.

"Mommy said no, so I am going to ask Daddy."

Spoilt child, sirrah. Naught but a spoilt child.

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Re: @Steve Todd

How can a percentage be Fair and Non Discriminatory? If one device costs £100 and another is £300 you're discriminating by charging 3 times more.

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Re: @Steve Todd

"Non Discriminatory"

I don't think that means what you think it means. Certainly in the context of FRAND. FRAND is nothing to do with not discriminating based on device. It has everything to do with not discriminating based on company. FRAND is about offering potential licensees equal access to the patents; everyone playing by the same rules.

Nowhere does it state that it must be a flat rate per device. In fact there are many FRAND devices that discriminate quite directly per device; X amount per DVD player, Y amount per desktop, Z amount per mobile and so forth. The critical bit is that if 5 mobile companies all come to you and say "I want to use your patents in my device" you tell them "it will cost you X per device," and X will be the same. There is nothing in FRAND rules about a % versus a fixed amount. Both have been used by various companies at various times.

Even if you want to go about it from a moral perspective, you can easily argue the "fairness" and "non-discriminatory" nature of a % versus a fixed amount. It all depends on which biases and preconceptions you approach the argument with. In the case of FRAND, the only real issue is "the same standards are applied to all licences."

FRAND != cheap. FRAND = "level playing field."

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Re: @Trevor_Pott

"you can easily argue the "fairness" and "non-discriminatory" nature of a % versus a fixed amount. It all depends on which biases and preconceptions you approach the argument with."

Surely you shouldn't have biases or preconceptions if it's supposed to be "fair and non discriminatory"?

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Non Discriminatory

"The critical bit is that if 5 mobile companies all come to you and say "I want to use your patents in my device" you tell them "it will cost you X per device," and X will be the same"

That is precisely where charging a percentage doesn't work, X is not the same.

If company A sells a phone for £100 they pay £2.50, company B sells a phone for £300 so they pay £7.50 for the same patent, company C sell a phone for £400 so they pay £10 for the SAME patent, company D sell a diamond encrusted phone for £10000 so they pay £250 for the SAME patent.

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@Trevor_Pott

I certainly don't think FRAND means what YOU think it means. By your argument a £50,000 car with a built-in mobile phone would attract a royalty of £1250 for Motorola. In reality the royalty is almost always on the module that embodies a SEP, not the completed device. For smart phones this is normally the baseband chip, and the royalty is paid by the chip manufacturer.

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Re: @Steve Todd

Trevor, one of the principles of FRAND is that the patent holder should have a published price list of what it costs to use. Companies using a patent need to know in advance what it's going to cost them, and another principle of FRAND is that patents can be licensed after the fact (so that the patent holder doesn't get advanced knowledge of the plans of a competitor). They are free to agree cross-licences etc as part of the negotiation, but unless they can show other phone manufacturers (and there are plenty out there with fewer 3G patents to cross licence than Apple) are paying an aggregate amount equal to that percentage of RRP for completed devices then the offer isn't FRAND.

Conversely Apple are offering THEIR 3G/LTE patents at the kind of rates they are talking about for Motorola. Android fans keep on talking about what a small percentage of the market the iPhone represents. They want to set the principle that Apple can charge the kind of money that Motorola is asking just for 3/LTE?

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Anonymous Coward

Re: @Trevor_Pott

" ... and the royalty is paid by the chip manufacturer."

Indeed, and then the principle of exhaustion applies and Apple (or Nokia or Samsung or whoever) has no liability for the patent payments.

I am not sure which case this particular one is, but Moto arbitrarily cancelled their patent license with a base band chip supplier for any chip sold to Apple. Think clearly about what this means. Apple bought the chips in good faith, and Moto implemented discriminatory licensing based on the end recipient of the chip.

This behaviour is unlikely to be considered "Fair, reasonable or non-discriminatory"

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Re: @Trevor_Pott

@Doogie1 if you approached FRAND with no biases and preconceptions you would realise that the licenceing concept as defined and as in use by most companies today is actually quite open ended and subject to a lot of interpretation. It isn't defined law but rather more of an industry-wide "gentleman's agreement" that pretty much everyone pisses on when they feel like it. From the licensors to the (especially in mobile) the licences.

They are all pretty much shit in the mobile game. Apple, Moto, Microsoft and more. Not a bloody one of them has the moral high ground here. That said, nobody has been able to present any evidence that Moto breached the letter of the "agreement" that is FRAND. They offered Apple the same deal they offer everyone. The fact that Apple - and some commenters - don't like that deal isn't relevant at all. It is the point from which negotiations are supposed to start. The same point everyone starts from.

Even the $30,000 car manufacturer. (And yes, people have entered negotiations with car manufacturers from a "% of the MSRP of the shipping unit" standpoint.)

That is what FRAND is. Not "cheap" but rather "level playing field."

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Re: @Trevor_Pott - Still not getting it

What we have yet to see is any EVIDENCE that this is the same deal on offer to anyone else. Just about everyone else buys a baseband chip from the likes of Qualcomm, license paid. Unless Motorola can show examples of customers who are paying 2.5% OF RETAIL COST, not 2.5% of the cost of a component or module that is sold on to become part of such a device, then their offer wasn't FRAND. Stop fixating on the number and look more at what it is being asked of.

The whole point of FRAND and SEPs is that manufacturers give up their rights to charge arbitrary and large amounts of the cost of devices in exchange for a small fee per device, but for many millions of devices. If Mototola charged $1 per device to everyone then they'd be currently making over $1 billion per year in licensing. If they had refused to allow them to be FRAND then the patents wouldn't have been included in the standards and they would have been lucky to get a fraction of that.

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Re: @Trevor_Pott - Still not getting it

@Steve Todd you are completely incorrect.

The whole point of FRAND is to level the playing field. As long as the same stating offer is made to all players, then the amount can be negotiated lower. They only have to prove they started negotiations at the same point. There is no requirement to prove that others were required to pay that starting request. (Which, IIRC, they actually have proven in court as part of Apple's discovery at least once.)

Again; you are basically saying that the value of cross licensing is zero. All that matters is the "sticker price." That is A) bullshit and B) not upheld by current law. Sorry.

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Re: @Trevor_Pott - Still not getting it

Wrong, and you're putting words into my mouth to boot.

ONE aim of FRAND is to provide a level playing field, but an important factor in the choice of those patents by the standards setting body is their cost. The standard needs to be affordable, and as something like 3G embodies thousands of patents so individually they need to be cheap.

Saying that doesn't mean that companies cant cross license their FRAND patents, it just means that their value isn't as high as non-FRAND patents. The aggregate rate is thus the cash rate plus the value of the cross patents. Patent holders are also allowed to do things like offer bundles of patents at a discount etc, providing the same deals are available to everyone.

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Re: @Trevor_Pott - Still not getting it

@Steve Todd; the same deals are very likely available to everyone. Assuming they sit down to the negotiating table. But all negotiations start at the same place. That's FRAND.

The standards bodies knew exactly what Moto charged for those patents when they chose them. Moto has been remarkably consistent about their patent licensing for ages. This isn't some new change on their part. It is Apple, Microsoft et all choosing to litigate as a means of attempting to restrict competition rather than bothering to negotiate, licence and compete on a level playing field.

Apple, Microsoft et al are basically trying to turn FRAND patents into something worthless. Nobody is going to bother to put forth a patent to a FRAND pool – or even participate in a standards process – if FRAND patents basically mean "nobody has to pay anything, because they can simply refuse to negotiate and then outspend you." Instead, companies that actually do the real innovation – making the products and technologies that should be in FRAND in the first place – will bide their time, not announce that thye have relevant patents to the standards process, then whack everyone after the patent is settled. (By not having taken part, they aren't subject to the "call for patents" and certainly can whack people who use similar-enough items to those which they hold patents on.)

I suspect that Microsoft and Apple are trying very hard to kill the standardisation process. It is part of a wider anticompetitive strategy no different than their wailing and gnashing of teeth about Google's supposed "abuse of search monopoly" which was rightly stepped on. (Or blowing up Google's dropping of the ball regarding Windows Phone and maps, which isn't – and wasn't – nearly the scandal Microsoft's PR folks tried to make it into.)

If you wanted to complain about someone committing to a patent pool at a given rate with a FRAND patent, then changing their mind…go right ahead. That isn't what Moto is doing. Moto is charging an outrageous sum for the FRAND patents they hold; but it is the same sum they ask of everyone, and they have been asking it for a good long while.

Apple and Microsoft are not even the first to get right uppity about it, though Apple's "we're not going to negotiate, we're just going to go straight to the judge and whine like a blinkered bitch" is a novel approach to the whole process.

So really, we can go round on this. You seem to be under the impression that Moto can't ask "a ludicrously large sack of money" up front. I am trying to tell you that is bullshit: they can. They simply have to ask for the same amount from all. They do not have to be cheap. They ideally should be, however nothing compells them to be. And that, as they say, is get of my goddamned lawn.

Wheeeeee...

Business!

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Re: Non Discriminatory @Alpha Klutz the Younger

But none are discriminated against as they all pay the same %age. The fact that Company A sells their device for £100 and Company D sells their device for £10000 is not the Patent owners issue. They have been fair by offering the same %age to everybody.

Look at it the reverse way. Let's assume that Company D were first to license the patent and it was agreed that they would pay a fixed price of £100 per device for the license. Now Company A comes along with their device is told "no problem, we have to be fair and it's £100 per device" - Company A now doesn't have a device they can sell and goes bust.

How is that fair??

Icon: For you getting %age's and fixed amounts mixed up

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Anonymous Coward

Re: @Trevor_Pott - Still not getting it

... so Moto cancelling their licensing agreement to ChipCoX for a 3G standard chip sold to Apple (and ONLY with respect to chips sold to Apple) is Moto's standard practice, and this practice is fair and reasonable?

Are you so ill informed, or just a moron?

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Re: @Trevor_Pott - Still not getting it

That Wheeeee noise was my points going right over your head.

1) As part of the standard setting process Motorola will have been asked how much they want to charge for the use of their patents. If they gave outrageous numbers there then alternative ways of doing things would have been found. The R in FRAND means that the rates that are charged MUST be reasonable.

2) The ND means that the same offers must be available to all. Not just the same percentage, but the percentage of WHAT. Unless they can show that others have been offered and paid this rate on a complete device then its is discriminatory. Worse still from Motorola's part they withdrew their licence to the companies making Apple's baseband chips (which is something that you're not supposed to do, ever, and is definitely discriminatory)

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it said that it would only be bound by the court's decision if the royalty rate was no higher than $1

Hey Apple, you don't really get a say in the matter. Once you put it in the courts' hands you're bound by their decision whether you like it or not. The Jobs Reality Distortion field apparently has you spoiled but now that it's gone you have to live in the same reality as the rest of us.

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