back to article 'I'd buy that for a dollar': Apple on Moto phone patents

Apple is willing to pay to use Googorola's patented wireless technology - as long as it's no more than $1 per iPhone. The fruity firm made the offer in a filing to a Wisconsin court ahead of a patent licensing trial due to start next week. Google-owned Motorola Mobility is accused of breaking an agreement with Apple over the …

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  1. g e
    Holmes

    Hahahaha

    So how many phones might they owe upon that have already been produced, I wonder?

    #Thieves

  2. Big_Ted
    Trollface

    Apple to court

    In best Violet Elizabeth voice "Make Mororola give it to me on my terms or I'll thcream and thcream 'till I'm thick".

    Court to Apple "Of cource we will my dear" turns to Google (Just William) "All right you orrible little man give her what she wants, and don't you dare think of doing anything evil like appealing, couse you arn't and she is"......

    1. JetSetJim Silver badge
      Paris Hilton

      Re: Apple to court

      Does anyone know the "normal" FRAND licensing is? I don't, and I used to work for Moto. All I heard was "piles of patents are balanced on scales, with the balance weight determining who pays whom", but no mention on how the value is determined.

      Is it "normal" to charge a percentage of retail price, or percentage of the component value that incorporates the patents in question?

      1. Wang N Staines

        Re: Apple to court

        FRAND is normally used as cross licensing tool, i.e. you pay minimal amount to use my FRANDs and in return all your patents are available to me for more less minimal amount. Both of us win.

        Apple being a c*nt that it is, refused to reciprocate.

        1. JetSetJim Silver badge

          Re: Apple to court

          Yes, so the scales weighing documents determines who pays whom, and I can't believe that the scales would tip towards Moto paying Apple. But it's not a "minimal" amount - it's a "fair and reasonable" and one would think that within the 3GPP (and other standardisation bodies) arena there are a huge amount of (probably NDA'd) contractual agreements between the member companies of the standards body. All Moto would have to do is demonstrate that the "2.25% of retail price of the device" is within the realms of such figures.

          Assuming they can, I suppose - although I would be surprised if they couldn't.

        2. a_been

          Re: Apple to court

          "Apple being a c*nt that it is, refused to reciprocate."

          Now your just making up shit, Motorola is the one refusing to meet it's FRAND agreemeant. It was also Motorola that sued Apple & Microsoft first.

      2. a_been

        Re: Apple to court

        No one pays on retail price, imagine you have a $200 million boing planes, Motorola is saying that if Boing put's a single $5-8 chip in one of it's planes it would have to pay 2.25% of the sale price of the plane.

        The licence amount varies by what is being licenced, some thing are fixed rate, firewire iirc was 25c per licence, others are a % of the component, memory chips are done that way since it's easy to work out the commodity price of memory. Then you get maximum costs, MPEG has a maximum that anyone company has to pay. After that it gets complex.

        Remember the idea is to make a standard that will be widly used yet earn lots of money for the SEP holders. So you want the licence to be both cheap yet expensive and everyone want's their patents in a SEP pool while at the same time having as few other companies patents in the pool.

    2. Paul Shirley

      Re: Apple to court

      What you need to remember is Apple only made this offer to avoid an instant loss for wilfully ignoring the FRAND licensing procedure, which *requires* them to negotiate, then go to arbitration. Only then do they get to whine to a court.

      Apple refused to negotiate at all and found a judge willing to just ignore all that but they need to cover their arses, by pretending to open negotiations.

      1. a_been
        Facepalm

        @paul shirly

        Motorola have to offer Apple the same terms as everyone else, that why it's called "Fair, Reasonable, and Non-Discriminatory". It is Motorola that made the agreament, they have to live up to that. No negotiation is required because Motorola have a legal duty to offer Apple the same terms as everyone else.

        As for the judge, well Motorola has so far lost in 7 different courts on 2 continents against both Apple and Microsoft over FRAND, how many more times does it have to lose before you start wondering if maybe it's not the courts that are acting illegaly but Motorola?

        1. Paul Shirley

          Re: @a_been

          I suspect you neither understand FRAND or the games Apple are playing. Motorola made the same opening offer to Apple as everyone else. That's pretty fair and non-discriminatory by any standards.

          What's supposed to happen then is Apple try to negotiate it down, both sides negotiate, if that fails it goes to binding arbitration and someone else decides what a fair price is. Apple skipped EVERY step of that process. Motorola completely lack any ability to force their choice of pricing under that procedure, they supply a starting price and negotiation skills but can't refuse to licence. But Apple didn't enter the FRAND process and arguably should gain no benefit from it now.

          Motorola *look* like they're in trouble because Apple and Microsoft have influence and have whispered lies into the right ears. When it reaches impartial judges (which hasn't happened yet) the opinion of bought politicians and bureaucrats tends to lose effect.

          Apple are playing a dirty and dangerous game and they're doing it because they have no negotiating power in SEP, owning bugger all essential patents. They aren't going to lower Motorola's initial offer much because they have very little to cross licence. That doesn't make the offer unfair, it simply reflects the value in the deal. Apple are in a weak negotiating position and desperate to bypass the process completely, was going to say 'by fair means or foul' but they seem to only be trying 'foul'.

          1. a_been
            Facepalm

            Re: @a_been

            Yes you still miss the simple fact that Motorola has not according to Apple offered a FRAND licence, the courts have been very clear on this (Motorola has lost every case). Apple dosn't think Motorola has offered a FRAND licence, the courts will decide. It's a binary arrgumeant, either Motorola has or they hasn't. If the courts think Motorola hasn't then Apple will get the courts to force Motorola to do so. If Motorola has then the courts will make Apple pay.

            So far you all you have done is say "na na na, i dont understand FRAND", it's very easy to understands. But I guess when your paid not to see it's easy to be blind. Clearly your a sockpuppet.

            Also you seem to forget that Apple bought the majority of nortels patents giving them over 10% of all mobile phone SEP's, they also testified to congress that they would licence them all under FRAND as that was their legal requirmeant, Motorola refuced to say if they would meet their legal requirmeants.

            Still in 2 weeks time the trial will be over, Motorola will lose then appeal and lose again and it seems Google are about to get slamed by the DOJ for abuce of FRAND SEP, so you will have a chance to moan about how the 7th largest company in the world, a company worth more than $220 billion, is somehow being treated unfairly.

            1. a_been
              FAIL

              Re: @a_been

              Well guess the register has become a lets hate Apple zone, no problem with that, i'll comment on this thread and then you babies can cry over your inability to use reason to judge tech or get a job. 25 years in this business and im so happy that i started my own bussiness. Good by reg, you traded page clicks for reporting and i hope you drown like those before who did the same.

              1. elaar

                Re: @a_been

                "Well guess the register has become a lets hate Apple zone"

                You make that sound like a bad thing. I love reading these comments, mainly to remind myself that not quite all of the world has been brainwashed yet.

        2. Anonymous Coward
          Anonymous Coward

          RE: a_been Re: @paul shirly

          "Fair, Reasonable, and Non-Discriminatory"

          It means that you can't license under FRAND for a different price two different licensees.

          And there are a maximum value you can charge in this one.

          Which means, that if you negotiate the licenses outside of FRAND, you can get a different deal (and possibly a better one). Also means, that if Motorola setup a secondary company and stated that FRAND is $100 per unit, and if that is allowed by the consortium, then, that's the FRAND terms, unless you want to negotiate outside of them, which i recall Apple refused...

  3. wowfood

    wait

    So they want the german court case and the USA court case figures to be combined, because the USA case keeps refering to worldwide sales, while the german one only refers to EU.

    Ignoring the fact that the german court is an EU court, and the USA court isn't worldwide?

    As for the $1 per phone. Google won't go for it, UNLESS apple agrees that it'll go back to all their previous phones, and not just future phones. A fair hit to apples funds that way (although they'll make it back instantly if the california court is bribed convinced to uphold samsungs appeal

    1. g e

      Re: wait

      The fact that they're offering anything implies they know they're infringing and should pay so surely that itself is evidence of willful infringement in the past - triple damages.

      1. Anonymous Coward
        Anonymous Coward

        Re: wait

        Yup,

        Apple admit they are infringing and owe something...

        So back date it to all prior sales of course!

        And lets hope Google are able to negotiate a decent rate!

        but I do agree it has to be a fixed $ amount per device, NOT a percentage of revenue since that would be quite unfair.. But somewhere around $10 per device would do it...

        1. Dr. Mouse Silver badge

          Re: wait

          "I do agree it has to be a fixed $ amount per device, NOT a percentage of revenue since that would be quite unfair."

          AFAIK the terms applied elsewhere are based on the profit or sale value of what's being sold. Therefore, this would be Discriminatory to offer them as a fixed amount to Apple, hence against FRAND.

          The difference is, I think, that it is normally licensed at component level.

        2. Anonymous Coward
          Anonymous Coward

          Re: wait

          $10 would mean the licence is more than the cost of the 3G chip, so Apple would pay more for a licence than everyone else pays for the licence and chip. That dosn't seem "Fair, Reasonable, and Non-Discriminatory".

        3. Rampant Spaniel

          Re: wait

          On % of revenue vs $, is it really unfair? Either works depending on the situation and the amounts. A % amount allows the manufacturer to make cheaper devices where the patent costs scale, great if for example you wanted to make a budget handset for a developing country. A fixed dollar amount depreciates over time but doesn't penalise companies making more expensive products. Given Apple isn't likely to make supercheap phones I can understand why they want a dollar amount.

          I have no idea how anybody can realistically figure out a FRAND rate. I guess you would have to base it off other patents already licenced that are of a similar nature and importance? Moto have to licence that tech as part of it being used in a standard. Perhaps a better solution is that when standards are written costs are worked out there and then for everyone who wants to use them and you but a licence for the entire standard?

          1. Dr. Mouse Silver badge

            Re: wait

            "Perhaps a better solution is that when standards are written costs are worked out there and then for everyone who wants to use them and you but a licence for the entire standard?"

            Yes, I completely agree that this would be the best way to deal with a standard. I believe this is done for many standards: You can buy, say, an MPEG-4 license and it covers all the patents involved.

            However, this will not happen in all cases. It would force everyone to decide on relative values from the start, and would make it more difficult for large companies to negotiate better prices. Cross-licensing deals would be more difficult to implement, too. Basically, the big boys wouldn't want their power taken away from them, and the smaller players would be able to enter the game more easily, something none of the larger companies wants.

          2. a_been

            Re: wait

            The FRAND deal was worked out by all the patent holders before the standard became a standard. Thats the SOP and it's worked well for decades, think CD, DVD, BlueRay, Bluetooth, FLASH memory, DRAM memory, HDTV, MPEG, GSM to name a few.

            Apple is saying that Motorola has a duty to offer a FRAND contract, basicaly it has to offer Apple the same deal it offers everyone else. Motorola is saying it want's 2.25% of retail and if Apple dosn't like that it should negotiate but until they reach a deal all iPhones should be banned.

            The problem is that if 2.25% of retail is FRAND then Motorola cant offer Apple better terms than it offered everyone else, assumadly 2.25% of retail. As it would get sued by everyone else. Motorola could win this case very easily by asking the court to force some of the companies that have agreed to 2.25% to testify. I assume any of the other patent holders in the SEP pool would do or anyone competing with Apple. HTC seems like a good choice as Apple buys nothing from them and so getting Apple to pay more wouldn't hurt them. But for some reason Motorola hasn't done that.

      2. wowfood

        Re: wait

        That or they realize they're getting attacked from all sides right now and they want to cut this court case short so they can focus elsewhere.

      3. a_been
        Thumb Down

        Re: wait

        Missing the point of FRAND, this isn't about if Apple is using Motorolas SEPs, it is and their is no debate on that. It's about if Apple already has a licence by buying the chips from Qualcom which has already agreed a licence with Motorola (which Motorola then pulled but on for chips sold to Apple, this is where FRAND comes in) or if Apple must get a licence diretly from Motorola and if so, how much that will be.

        1. eulampios

          wipe your glasses, Mr. iFanboy

          You must be having difficulty to see through those glasses of yours that the reason for Moto acting aggressively now against Apple is that Apple themselves behave ridiculously aggressive with resp. to Android manufacturers (but not Microsoft!!).

          So you think, it is fucking unfair to pay more than a buck per idevice for some real technology, whilst, it is absolutely fine to make Samsung pay to them $30 per their (cheaper) device for a piece of joke like, "rounded rectangles", "rubber band" or other similar pos patents?

          1. toadwarrior

            Re: wipe your glasses, Mr. iFanboy

            The difference is of course apple doesn't have any frand patents meaning you don't need to do things the same way. Motorola has frand patents and in return for making your patent a requirement is it's got to be sold at a reasonable rate unlike other patents.

            It's not that hard figure out.

            1. eulampios

              Re: wipe your glasses, Mr. iFanboy

              The difference is of course apple doesn't have any frand patents meaning you don't need to do things the same way.

              You don't, just make your galaxy phone trapezoidal, rhomboid, ellipsoidal or any 2-nd order or algebraic curve of your choice. Let conic sections and Algebraic Geometry help you!

              Apple is known to patent the obvious. It's not only Apple that is doing wrong but the incompetent patent system allowing it + idiotic American justice that doesn't clean up that crap with plenty of prior art, unlike the saner British system . When a stupid jury can rule out this prior art consideration, since it cannot be put into the same processor Yet, Apple has the conscience to use it and ask $30 per device for this pos.

              1. a_been
                Facepalm

                Re: wipe your glasses, Mr. iFanboy

                "Apple is known to patent the obvious", thats not how patents work, you can't patent the obvious.

                Your argumeant is "na na na, I hate Apple", grow up.

                1. Dr. Mouse Silver badge

                  Re: wipe your glasses, Mr. iFanboy

                  '"Apple is known to patent the obvious", thats not how patents work, you can't patent the obvious.'

                  Actually, looking at how the US patent system, in particular, works you can.

                  The patent office don't do any more than the bare minimum of checks to decide whether the patent is valid. They also don't have experts in every field working there. Their job is to make sure the paperwork is in order, do a quick search to see if the idea is already patented and then grant it.

                  Then, it is up to competitors to take the patent holder to court to try to have the patent quashed (or be taken to court and then try). The patent may be blindingly obvious to an expert in the field, or may be covered by prior art not noticed by the patent office.

          2. a_been
            Facepalm

            Re: wipe your glasses, Mr. iFanboy

            I'll try and make it simple for you,Motorola agreed to licence some patens under FRAND and because they did they were given a monoply. Apple wants Motorola to do what it said it would do as Apple does with the SEP's it has agreed to licence under FRAND.

            Is that to hard to understand?

            As to Samsung, if they don't think Apples design patents and technology patens are worth anything, why did they write a 120+ page suicide note saying "copy Apple more"? Nokia never bothered, RIM never bothered, Palm never bothered and Microsoft never bothered to copy Apple!

            Or do you just think that the only Android handset maker that is making money is the company that riped off the most succesfull hadset maker? That in case you are wondering is Samsung, the leaders of which have had to get 2 presidential pardons for coruption to avoide jail.

          3. Chris 155

            Re: wipe your glasses, Mr. iFanboy

            Not that the patents Apple is suing Android over aren't ridiculous, but whether they are or not they also clearly don't apply to Windows Phone which is why Apple aren't insane enough to sue Microsoft.

            You can show a jury pictures of iPhones and Samsung phones and say "they look identical give us money", the same doesn't work because the metro style interface is fundamentally different. Apple would get laughed out of court for trying to sue Microsoft.

        2. Johan Bastiaansen
          Devil

          Re: wait

          I don't know if that is true, but if it is, that's not "Fair, Reasonable, and Non-Discriminatory".

          Then the question is: do you have to be "Fair, Reasonable, and Non-Discriminatory" with a company that claims they have a patent on cool devices with flat surfaces and round corners?

  4. Russ Pitcher
    WTF?

    Fair, Non-discriminatory. Don't get the issue

    Surely if it is FRAND, then the patent holder sets a REASONABLE price for licensing the patent - say $x per item or per use of IP, and then publishes that price and charges everyone the same. Therefore FAIR and NON-DISCRIMINATORY in its application.

    Am I being too simplistic?!?

    1. ChrisInAStrangeLand
      FAIL

      Re: Fair, Non-discriminatory. Don't get the issue

      Motorola doesn't have to re-offer Apple FRAND terms once they've refused them. They can deny Apple access to 3G patents Apple has claimed they don't need and won't buy, and is now saying they've willfully infringed, or they can charge the spoiled child any non-FRAND amount they choose.

      1. Steve Todd
        Stop

        Re: Fair, Non-discriminatory. Don't get the issue

        Nope. The argument is over if Motorola's offer was within the bounds of FRAND. Even if it was (and that's a big if) their remedy is to go to court and force Apple to pay that rate, not to withdraw the offer and charge what they like.

  5. Steve Todd
    Stop

    Once again the comentards are demonstrating that they don't understand FRAND

    This whole case is over what is or isn't a FRAND rate for Motorola's patents. There's no doubt that Apple are infringing or that Motorola HAVE to offer a licence at FRAND rates. The court is being asked to decide what this rate should be as Apple and Motorola can't agree the numbers.

    Apple's position is that it should be NO MORE than $1 per device, which is kind of in line with what other users get charged when they buy a 3G baseband chip. If its that amount or less they will pay up in the spot. More than that and they reserve the right to appeal the judgement. That's what they are telling the court, not Motorola.

    Motorola are asking for 2.25% of the average selling price. If the court decides that the patents are worth less than that then they are also free to appeal the judgement.

  6. Anonymous Coward
    Anonymous Coward

    Earth to Apple

    You don't get to decide what a competitor can charge you for their property. You can negotiate, but if the owner of the property doesn't like what you offer they have every right to tell you to sling your hook.

    1. a_been

      Re: Earth to Apple

      You do get to when the compertition has entered into a legal agreameant to offer everyone a FRAND deal.

      1. This post has been deleted by its author

      2. Anonymous Coward
        Anonymous Coward

        Re: Earth to Apple

        Apple demanding that they get everything for no more than $1 is neither fair nor reasonable and no Apple don't get away with it because it is FRAND. If they are unhappy with the terms offered then they have to show they followed due process and prove that the terms they are being offered are unfair and unreasonable. So far they have failed to prove that.

        1. toadwarrior

          Re: Earth to Apple

          How have you dtermined $1 is neither fair or reasonable? Motorola will get millions of dollars for doing nothing and given there are frand patents that charge less than that, I fail to see how anyone can say that's unreasonably low.

          My guess is it's a case fantardism that makes you think they should be charged an astronomical amount and that will how you get to beat apple. That's kind of sad really.

          1. Anonymous Coward
            Anonymous Coward

            Re: Earth to Apple

            'Motorola will get millions of dollars for doing nothing'

            Only for helping to invent things that actually make a phone work and without which Apple wouldn't even have a product. And in your world Apple asking $30 for something not worth the paper it was printed on is entirely reasonable. Fanbois give it up, you lost this argument a long time ago and now courts all over the world are confirming what we have been saying all along.

            1. a_been

              Re: Earth to Apple

              You still fail to mention why if it worth nothing, Samsung would want to use it. Clearly Samsung thought it was worth it otherwise they would not have bothered.

          2. eulampios

            reciprocity, @toadwarrier

            Now apply this argument to Apple suing Samsung .

            1. Steve Todd
              Stop

              Re: reciprocity, @toadwarrier

              Why? FRAND rates only apply to patents that have been committed to a standard as FRAND by their owners. What standard had Apple committed the patents it was suing Samsung over to?

      3. Craigness
        Facepalm

        Re: Earth to Apple

        A_been, FRAND doesn't mean that Apple can set its own price for Moto's property, it means Moto can't discriminate in Apple's favour. Same terms for all, even for the school bully.

        1. a_been

          @Craigness

          Yes but Apples case is that it has not been offered FRAND by Motorola, Apple is saying that it has been desciminated against by Motorola and the evidence is clear that it has. Apple bought components from a suppier that licenced Motorolas SEP's under FRAND. Motorola said your licence to our SEPs is withdrawn for Apple but nobody else. Motorolas problem is that for the first 3 years the iPhone was on the market they had no problem with Apple buying the components, it was only with the 3GS and their profits tanking that they tried to extort money.

          Yes with 120 billion in the bank, it is extortion and there are 120 billion reasons.

  7. EddieD

    What does Apple charge?

    I imagine that Apple has tech that it licenses on FRAND terms - what do they charge? A dollar?

    1. EddieD

      Re: What does Apple charge?

      Getting this in the right place...

      For the record, Apple want $24 per unit from Samsung for the rounded corners

      1. Steve Todd
        Stop

        Re: What does Apple charge?

        You're confusing FRAND/non FRAND patents and normal vs design patents.

        FRAND requires the owner to license at a fair and non-discriminatory rate. Apple have patents used in h.264 video that fall into this category, and my understanding is that they get pennies for there use.

        Non-FRAND patents can be licensed (or not) for however much the owner can get away with. There is no set rate or requirement to license. The rounded corners thing was part of a design patent, which are never FRAND as they are never essential to industry standards (they are about cosmetic appearance).

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