Slashdot Mirror
Apple Overturns Motorola's German iPad and iPhone Sales Bans
SpuriousLogic sends this excerpt from a BBC article detailing the suspension of a sales ban on certain Apple products in Germany:
"Motorola Mobility had forced Apple to remove several iPad and iPhone models from its online store [yesterday] after enforcing a patent infringement court ruling delivered in December. An appeals court lifted the ban after Apple made a new license payment offer. However, Germany-based users may still face the loss of their push email iCloud service after a separate ruling. 'A suspension like this is available only against a bond, but Apple is almost drowning in cash and obviously won't have had a problem with obtaining and posting a bond.' ... A statement from Apple said: 'All iPad and iPhone models will be back on sale through Apple's online store in Germany shortly.'"
Reader DJRumpy points out that Motorola is seeking royalties of 2.25% for Apple's wireless devices in exchange for a license to use Motorola's patents.
You use something someone created, you pay them for it. Then why is it when the situation is reversed, Apple says: "F*ck you! I'm going to ban it.". Just makes them seem like hypocrites and frankly, douches.
Apple flings lawsuits like mad. Then it bites them in the butt. Can we all just agree that the patent system is idiotic and far too overbearing already?
This same patent expert insinuated that Google Motorola buy was a bad idea!
Now, we hear that push email may be gone from iDevices. This is to the expert... ...What you say...?
Simple. If every one of the (estimated) eighteen companies that own essential GSM patents demanded a separate license at 2.2% instead of the few pennies per unit that they almost certainly charge to everyone else, it would add up to almost half the cost of the device.
Besides, there's debate over whether Apple's purchase of off-the-shelf GSM silicon (rather than designing it themselves) means that they already paid for the license, in which case Motorola is double dipping....
2.25% is an enormous sum of money, when you consider that a device might use patented techs from hundreds of companies. If each of these hundreds of companies asked for 2.25%, you're gonna be in trouble.
Except that with the other manufacturers, it probably has been a patent cross licensing, something that Apple has refused to do from the start.
And Apple built his iUniverse around infringing products, as it refused to license the technologies (waiting for some court to come to help)... IANAL but there is clearly a damage to the other players as Apple may not have been able to enter the market like he did should he have paid for the licences from the start... At that time, it was far from "some little money out of a big warchest"...
Source.
Frand-type patents involve technologies that are deemed to be part of an industry standard. In this case Motorola's innovation is deemed crucial to the GPRS data transmission standard used by GSM cellular networks across the world.
Companies must offer Frand-type patents for a reasonable fee to anyone willing to pay.
Apple had previously said it would be willing to pay the fee going forward, but the two firms dispute how much Apple should pay for failing to license the technology up until now. Missed payments are not covered by the "reasonable" rule, and Motorola is able to demand a more expensive price.
"It does not do to leave a live dragon out of your calculations, if you live near him." - Tolkien
Except that with the other manufacturers, it probably has been a patent cross licensing, something that Apple has refused to do from the start.
Apple does cross license their FRAND patents which are included in the standards. They don't cross license their other patents such as UI and proprietary hardware. That's the whole point, Motorola seems to be trying to use their FRAND patents (which were included in standards only because of their promises) to leverage against Apple to get licensing to patents that aren't part of any standard. It is exactly why there are rules in the first place about how you can use patents once you agree they are to be used in a standard.
As mentioned above, the 'reasonable' part doesn't apply if you don't pay when you should.
Source for the second (and hopefully last) time :)
"It does not do to leave a live dragon out of your calculations, if you live near him." - Tolkien
If every company with a FRAND-related patent charged 2.25% nobody would be able to create a product. That you think it's not a ton of money shows how short-sighted you are being and how you're failing to look at the bigger picture.
Not to mention that FRAND stands for "Fair, Reasonable, and Non-Discriminatory" and 2.25% is most certainly _NOT_ Fair nor Reasonable.
I'll take some number from my butt (definitions of my butt may vary, but in this context it is random site on internet).
1.186 billion mobile broadband subscribers.
Let's say that half of these are on a 3G chip that somehow requires the Motorola 3G license: 593 million.
If these devices sell for an average of $20 we would have 11,86 billion in sales for these devices.
If Motorola wants 2.25% of the sales of these devices that would mean $297 million, a very significant number considering it is a single patent of a large portfolio of 1729 patents (yes, one thousand seven hundred and twenty nine).
Imagine if each of these patents would warrant an average licensing cost of 0.1% rather than the 2.25% that Motorola wants, then we would look at a licensing cost of more than the sales price to license 3G technology for the device. 2.25% does not smell FRAND to me, but I am no patent lawyer, I only pretend I know stuff on the internet.
As mentioned above, the 'reasonable' part doesn't apply if you don't pay when you should.
Source for the second (and hopefully last) time :)
Well... It's sometimes hard to pay what one should when:
[...] Motorola repeatedly refuses to license this patent to Apple [...]
source
exactly
like wise, the opposite is impossible, since it would be illegal to SELL a chip without paying for a licence.
So if you buy a chip, its assumed, its already paid for.
Else... the chip maker is breaking the law and must pay the licence as they are selling it first point of call.
Its not like apple sells hardware to retail chains patents unpaid, and the retail chain has to pay patents.
Liberty freedom are no1, not dicks in suits.
for initial negotiated fees i agree.. but for fees applied to a product made by a company that knowingly attempted to doge the fee..it isn't.
i'm not taking any side on this.. as i don't know the details.. but it only makes since that the fee applied after you are caught doing wrong be high enough to prevent you from doing it again. if it was the same cost as just licensing it to begin with then there would be zero incentive to license it ahead of time but rather you would produce and hope you didn't get caught an did then it's a know cost that you had already accounted for.
'...if only "Jumping to a Conclusion" was an event in the Olympics.'
for initial negotiated fees i agree.. but for fees applied to a product made by a company that knowingly attempted to doge the fee..it isn't.
Me neither, but this link (found in other comments on this article) claims Motorola repeatedly declined payment from Apple.
well that was because apple was willing to only pay the fee as if they had done it from the start.. and completely ignore the fact that hey had not licensed it prior to selling products using it.
'...if only "Jumping to a Conclusion" was an event in the Olympics.'
apple didn't want a biolerplate frand agreement. They wanted their own agreement (which covered previous unlicensed use), and thats what allowed Motorola to dictate whatever terms they want. There is big money involved because if Motorola is correct apple has been infringing on their patent for multiple product generations. The money isn't just licensing for next year, but licensing/damages for the patent being used unlicensed for years and producing big profit.
The other way round, actually. What Apple wanted is a license under FRAND terms: You give me the license, I pay you cash. Now many companies in that business don't want these terms, they prefer: You give me a license to your patents, I'll give you a license to mine, because it is cheaper. And that's the kind of license that Motorola wanted to offer and that Apple didn't want.
And there can't be damages for any time where Motorola didn't offer a license under FRAND terms, otherwise the requirement for FRAND terms would be a joke. If I have a patent that I'm required to license to you for X dollars, I could just ask for 10 X dollars, delay an agreement for as long as possible, and then ask for X dollars in license fees and 3X dollars in damages for the time of the delay. (Obviously asking for X dollars for that time is fine).
You mean like paying when you buy the chips from Qualcomm who had already paid a licensing fee to Motorola for the patents in question?
Yeah.
Motorola is attempting to double-dip. They want money from Qualcomm _and_ Apple for the same chip.
Actually, that last part isn't true - what Motorola actually wants is access to Apple's non-FRAND patents and they're attempting to leverage their own FRAND patents against them in the hopes of forcing a cross-licensing agreement (*). For chips made by Qualcomm who already paid to license the patents. So the double-dipping part is true...
* And I remain baffled that the Slashdot crowd considers this business practice to be acceptable, regardless of who does it or against whom it is done. It goes against the very heart of everything that FRAND stands for and, if successful, will have chilling effects on, well, pretty much any and every industry that makes use of FRAND patents to establish industry standards. In my opinion, _ANY_ company that abuses a FRAND patent should be viewed in a negative light. Then again, I must be new here...
The patents are in the 3G standard, therefore Apple didn't infringe them "on purpose" - by implementing 3G they were obliged to use the patent, whether they wanted to or not.
Where it gets sticky is that the patents are RAND covered, so Moto must charge everyone the same. Of course, everyone cross licences, and makes other payment deals etc, but ultimately everyone pays the same. It gets more tricky when you have to decide what your cross licenced patents are worth, or how much a certain percentage of sales will be if you have forecast numbers etc.
They've (Apple and Moto) have been butting heads on this for a long time - much like the Nokia vs Apple suit. Neither side can agree on payment. Given that the patent in question is in the 3G standard, it has never been about one side *not* wanting to pay - paying the correct value is what this is about.
As that very article points out, Motorola has declined various settlement offers from Apple for PAST infringement of Motorola's patents. Motorola has licensed these very patents to Apple on FRAND terms for use in newly developed products which is why the iPhone 4S was not affected by the sales injunction, only the older models.
Since Apple did not license the patent on FRAND terms before pushing out the older iPhones, Motorola does not have any obligation to be fair, reasonable or non-discriminatory in negotiating the deal for those products now.
The company didn't knowingly try to dodge the fee – they tried to license the patent, and when FRAND terms weren't offered said "fuck you, we'll fight it out in court when the device is out".