Posner Dismisses Apple/Motorola Case, With Prejudice

whisper_jeff writes "Judge Posner has dismissed the patent case between Apple and Motorola, with prejudice (meaning they can't refile), putting an end to this patent dispute between the two companies. Posner wrote, 'Both parties have deep pockets. And neither has acknowledged that damages for the infringement of its patents could not be estimated with tolerable certainty.' I know many on Slashdot will be happy to hear Apple's lawsuit failed; I am happier to hear that Motorola has been prevented from abusing FRAND patents, a situation I feel could set a very bad, very dangerous precedent for the entire industry."

Comments

Re:What the...!?

[reve_etrange]

At least two, anyway.

Re:FRAND is a red herring

[SuricouRaven]

I notice that the F is for 'fair' not 'free.' Noncommercial users, espicially free software, tend to get excluded as they can't afford the royalty. This is why Firefox doesn't support h264 video.

Re:Once again they dance around the issue

[Anonymous Coward]

Umm....try the Oracle v Google case.

Biased summary much?

[arkhan_jg]

Motorola has licenced its FRAND patents to many companies, and the price is their standard one. Many other companies in the mobile phone space have reached agreements on those terms - Nokia, Ericsson, RIM, Samsung, LG, and HTC have all done so, for example. However, those companies also have relevant FRAND patents, so everyone cross-licences their patents to each other, allowing them all to operate. They all bring their patents to the table, share them with each other, and crack on with making phones. Those with small patent pools may end up paying the larger players under FRAND terms - anything up to 5% is standard.

Apple doesn't have such radio patents - they haven't been involved in inventing the essential standards for wireless comms, phones etc. So the normal process would be either to pay the standard patent licence fees which FRAND standards involve to 'buy in', or cross-licence some of their own software patents in exchange.

Apple doesn't want to pay any fees at all, let alone a fairly standard 2.5%. They see FRAND and think 'free'. Nor do they want to cross-licence any software patents, as they want to drive all android phones from the marketplace. Apple sued motorola and sought injunctions to stop them selling phones. Same with samsung.

Apple spent years trying to avoid paying nokia's patent licence fees for FRAND patents, and eventually settled the lawsuit - they ended up paying £700m lump sum plus £7 an iphone in licencing costs last year.

It's doubly ironic that Apple castigates samsung for stealing their unique patents which amounts to a black rounded rectangle shape with icons in a grid on it, yet don't see why they should have to pay up to licence FRAND patents that literally are what makes the phone capable of being a phone.

And FRAND doesn't mean you can't sue. It just means you have to offer the same licencing price to everyone first - if they pay that, they're safe. The licencing fee can't be too high - which isn't defined - but up to 5% is standard in the industry. But if someone refuses to licence, and then sues you first? That's hardly a dangerous precedent to sue right back, and motorola is far from the first to do so.

Remember who declared "I will spend my last dying breath if I need to, and I will spend every penny of Apple's $40 billion in the bank, to right this wrong... I'm going to destroy Android, because it's a stolen product. I'm willing to go thermonuclear war on this."

It wasn't Motorola or Samsung.

Re:Biased summary much?

[chrb]

Apple participates in many patent pools themselves, and they have no issue with paying the same license fees as anyone else.

Actually that isn't true. In the Nokia vs Apple case, Apple refused to accept the standard pricing and Nokia had to request that the court order them to pay: "all Nokia's asked the court to do is set a price, it's clearly willing to simply accept cash and move on"

Re:Biased summary much?

[whisper_jeff]

I'm not going to quote portions of your post and refute them. What I'm simply going to say is that YOU ARE WRONG. Go read Judge Posner's opinion and judgement and learn something. You are wrong. Some of your fundamental beliefs about (F)RAND patents are outright, incredibly, over-the-top wrong.

Seriously - read Judge Posner's opinion and you will learn something.

Why garbage like your post continues to get modded up when it is clearly, incredibly wrong is beyond me.

Re:Biased summary much?

[whisper_jeff]

You know what - I've decided to actually post a more-detailed reply because posts like yours - and the modding it receives - highlight why Slashdot is becoming less and less valuable. How your post gets modded +5 Informative is beyond me when it shows a gross ignorance that is simply astounding.

We'll start with this:

Apple spent years trying to avoid paying nokia's patent licence fees for FRAND patents...

No. They didn't. Apple disputed the amount required to be paid but was always willing to cut a check. They went to court because they felt Nokia was demanding an inappropriate rate, the courts settled things, and Apple cut the check. Apple didn't attempt to avoid paying anything.

Now, more on-topic:

Apple doesn't want to pay any fees at all, let alone a fairly standard 2.5%.

Fairly standard??? I want you to do a math exercise. If there are 100 patents in a standards essential patent portfolio (that number is one picked by Judge Posner in his opinion and order so I'll go with it as well) and each one garners a 2.5% licensing fee, how much would the entire portfolio cost?

I'm going to assume you're able to recognize the immediate problem right there. If not, I'll quote Judge Posner:

"...if Apple had wanted to license any of the patents in Motorolaâ(TM)s standards-essential portfolio, the license fee would have exceeded the product of the percentage of the portfolio represented by the patent and the value of the entire portfolio. ... âoeGoing for brokeâ is the inescapable characterization of Motorolaâ(TM)s damages claim."

You say 2.5% is "fairly standard" yet simple math would highlight that is an impossibility and Judge Posner characterizes such an effort as "going for broke", making it clear that Motorola's demands for 2.25% was well beyond the norm for a FRAND patent.

Your post is incredibly wrong and ill-informed. I do hope people will take a moment to download Posner's opinion and order and read it. _THAT_ is informative and will help clarify the situation.

I find it sad that Slashdot has fallen so far. There was a time that this site informed me of a great many things within the tech/geek world but the egregious misinformation that is spread is making the site next-to-useless now. The fact that "Informative" might, maybe mean "informative" but more than likely means "I hate that company and this post makes that company look bad so I'm going to mod it up" means the value of this site is vanishing...

Re:Biased summary much?

[whisper_jeff]

Did you even read the article to which you, yourself, linked? It says nothing, at all, about Apple refusing to pay. What it does say is that Apple was going to pay cash, not cross-license patents, and it was unclear what the fair and reasonable cash rate should be (Nokia obviously thought it should be higher than what Apple thought it should be), so they went to court to figure it out. Once figured out, Apple cut the check.

Re:Biased summary much?

[arkhan_jg]

I'm not going to quote portions of your post and refute them. What I'm simply going to say is that YOU ARE WRONG. Go read Judge Posner's opinion and judgement and learn something. You are wrong. Some of your fundamental beliefs about (F)RAND patents are outright, incredibly, over-the-top wrong.

I did read the judgment. Feel free to argue why I'm wrong instead of just stating it like you're the font of all knowledge, and being a bit of a tit about it.

Posner dismisses Motorola's request for an injunction; as being a FRAND patent essential to the UTMS standard that would defacto grant too much power to enforce whatever fee they liked. However he doesn't dismiss that Apple are still required to pay for FRAND licences, and could be required by a court to do so. In this case though, Motorola said that they charge 2.25% (typoed 2.5% in GP post) as a percentage of final device price as standard, regardless of the number of FRAND patents, as different cases could involve 75 or 100 FRAND patents. Given that Posner required both sides to reduce their claim to the smallest number of key patents, Motorola then failed to prove the specific value of that one patent they kept in the trial.

From the judgment:

A FRAND royalty would provide all the relief to which Motorola would be entitled if it proved infringement of the ‘898 patent, and thus it is not entitled to an injunction. In fact neither party is entitled to an injunction. Neither has shown that damages would not be an adequate remedy. True, neither has presented sufficient evidence of damages to with-stand summary judgment—but that is not because damages are impossible to calculate with reasonable certainty and are there-fore an inadequate remedy; it’s because the parties have failed to present enough evidence to create a triable issue. They had an adequate legal remedy but failed to make a prima facie case of how much money, by way of such remedy, they are entitled to. That was a simple failure of proof.

He dismissed Apple's injunction because it would cause more harm to Motorola than Apple would gain, and because it was more harm than the patents were worth. He thought that Apple's claims of costs workarounds for their patents were unproven.

So since neither side was entitled to an injunction, and neither side had proven what those specific patents left were worth in either losses to the plaintiff, or benefit to the defendant, he dismissed the lot.

He certainly didn't say that, in general, failure to pay FRAND licence fees could not be corrected through court assessment and order of payment, he said the exact opposite - which was the main thrust of my post.

Re:Biased summary much?

[arkhan_jg]

You know what - I've decided to actually post a more-detailed reply because posts like yours - and the modding it receives - highlight why Slashdot is becoming less and less valuable. How your post gets modded +5 Informative is beyond me when it shows a gross ignorance that is simply astounding.

Well I'm glad you've decided to actually participate instead of just slinging insults. Not least because it demonstrates that you yourself are wrong. I did read the judgment, by the way.

They went to court because they felt Nokia was demanding an inappropriate rate. Which is what I said. They refused to pay nokia's standard rate between 2007 and 2011. That's 4 years. Nokia took them to court to make them pay, and then settled before judgement was reached. Both back payments, and approximately 1.5% of final device cost on every device. Apple could have paid up years earlier, but decided the same rate everyone else paid was too high.

You say 2.5% is "fairly standard" yet simple math would highlight that is an impossibility and Judge Posner characterizes such an effort as "going for broke", making it clear that Motorola's demands for 2.25% was well beyond the norm for a FRAND patent.

Motorola charge 2.25% (typoed 2.5% in GP post) for their entire FRAND patent portfolio as the standard rate - as it can involve 75 or 100 patents. What they failed to do is show the value of this one specific patent that the judge required them to reduce the case to.

From Motorola's evidence:

"One patent is 1 percent of 100 patents and 1 per-cent of $700 million is $7 million. But according to Donohoe’s declaration, the license fee for that single patent, if licensed on its own rather than as part of a package deal that comprised the entire portfolio, would be “up to” 40 to 50 percent of the royalty for the entire portfolio—that is, up to $350 million."

Because motorola don't licence the patents individually, but as part of a large pool; and some of the patents are worth more than others. But in this case, they didn't break down the precise value of the one patent left out in the case as ordered by the judge. (And neither did Apple present usable evidence as to the actual value of their patents)

"How to pick the right non-linear royalty? Donohoe’s declaration does not answer that essential question, and there is no suggestion that any other witness can answer it."

And also from the judgment:

"A FRAND royalty would provide all the relief to which Motorola would be entitled if it proved infringement of the ‘898 patent, and thus it is not entitled to an injunction. In fact neither party is entitled to an injunction. Neither has shown that damages would not be an adequate remedy. True, neither has presented sufficient evidence of damages to with-stand summary judgment—but that is not because damages are impossible to calculate with reasonable certainty and are there-fore an inadequate remedy; it’s because the parties have failed to present enough evidence to create a triable issue. They had an adequate legal remedy but failed to make a prima facie case of how much money, by way of such remedy, they are entitled to. That was a simple failure of proof."

FRAND patents are still worth money. How much money one specific FRAND patent was worth as opposed to the whole pool was not proven in the case, and thus, dismissed. Apple's patents were not properly quantified in value either, so also were dismissed.

I stand entirely by my original post. There's no reason that you can't sue over FRAND patents if a company refuses to pay the same licence fees you charge everyone else - and it's up to the court to decide if that value is fair or not. It doesn't doom the entire industry if a company does so, but it does waste a vast amount of time, money and harm customers when one or two software companies want into the phone business, but don't want to pay the companies that literally invented the hardware chips that made it possible.

Re:Biased summary much?

[Carewolf]

No. Apple's case was that the chip-manufacturer had already paid the license and that Nokia was double dipping. So there was a difference in how much Apple would pay and what Nokia demanded. Nokia demanded something, and Apple offered to pay nothing.

The end settlement is secret, but seeing as Nokia has not been counter-sued by Apple it probably contains a cross-license agreement on top of $x per iPhone.

Biased quoting much?

[Anonymous Coward]

If you're going to quote, quote the reason why.

Of course, lawsuits are usually made to be settled, but Jobs was having none of it. Meeting with then-Google CEO Eric Schmidt, a man who for years sat on Apple's board before Android made that no longer possible, Jobs told Schmidt that money wasn't going to make it right. "I don't want your money. If you offer me $5 billion, I won't want it," Jobs reportedly said. "I've got plenty of money. I want you to stop using our ideas in Android, that's all I want." And with that, the door to any possible settlement was slammed shut.

Misjudged FRAND patents

[mikmach]

I feel that most people don't really understand idea behind FRAND patents. It had two objectives:

1) Prevent war between 'gorillas'. All of them were putting major resources into R&D in hardware and FRAND patents allow them to share knowledge without heavy fighting of negotiations which would only filled lawyers pockets

2) Lower barriers for small players. With FRAND they can license necessary technology without breaking budget and allow to concentrate on product.

Now we have third situation: gorilla enters the fray and want to use FRAND system without paying entry fee (resources put into R&D). It is Apple which abuses FRAND system, not Motorola, Nokia, etc. If it wants to not be treated with contempt it should put their 'design patents' into FRAND pool.

Re:Misjudged FRAND patents

[Anonymous Coward]

One feels that your position of "I'm not going to waste time explaining this to you" is somewhat nullified by the fact that you keep on posting it over and over again. You could probably have explained it by now and spent less time on this - which makes me think that you don't want to for some reason. Oh wait, this is why - you're being disingenuous, because it doesn't state any such thing in Posner's judgement. If you can point out exactly where this appears, feel free.

In essence, Posner is saying nothing other than that neither side can prove damages based off the infringements of these patents because in essence there probably aren't any, so he can't justify an injunction at all, and the court won't tolerate them trying again.

Re:Misjudged FRAND patents

[Macthorpe]

Posner only said that they weren't being clear in what damages they were, not that they were excessive. In fact, he specifically points out that Apple are running the risk of being ordered to pay that amount or more by the court.

Re:Patent portfolio not so great, aktsually...

[value_added]

Apple's foray into legal brigandage

Well done, sir!

For the kids following along at home, here's the etymology according Wikipedia :

The brigand is supposed to derive his name from the Old French brigan, which is a form of the Italian brigante, an irregular or partisan soldier. There can be no doubt as to the origin of the word bandit, which has the same meaning. In Italy, which is not unjustly considered the home of the most accomplished European brigands, a bandito was a man declared outlaw by proclamation, or bando, [3][4] called in Scotland "a decree of horning" because it was delivered by a blast of a horn at the town cross.

The brigand, therefore, is the outlaw who conducts warfare after the manner of an irregular or partisan soldier by skirmishes and surprises, who makes the war support itself by plunder, by extorting blackmail, by capturing prisoners and holding them to ransom, who enforces his demands by violence, and kills the prisoners who cannot pay.