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

What the...!?

[Anonymous Coward]

...we have a judge that DOESN'T have his head up his ass?

Re:What the...!?

[reve_etrange]

At least two, anyway.

FRAND is a red herring

[rtfa-troll]

FRAND is just another patent cartel and we have no reason to care about it. FRAND standards organisations should be seen as a form of illegal cartel.

Even funnier is that Apple and Microsoft, who have completely failed to get licenses for these FRAND patents go around attempting to mug people with knives and start crying like babies when companies like Motorola that have actually done some serious research in their lives pull out a combat shotgun. "Want to make my day?".

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:FRAND is a red herring

[martin-boundary]

And that's a good thing. The Free Software community shouldn't get suckered into using proprietary formats. We're here for the long haul, not to line some turtleneck sporting CEO's pockets.

Re:FRAND is a red herring

[khipu]

For all their faults and inability to create decent software, Microsoft actually spends a lot of money on research. Apple, however, doesn't; Apple just "steals" other people's ideas and inventions (according to Steve Jobs himself).

Re:FRAND is a red herring

[iserlohn]

I'm guessing not all of the money in the software development budget so to the software developers salaries - you have the overhead of hiring the employees, including desk space, HR, etc. You have expenses related to software development including test infrastructure, external testing, etc. Furthermore, you would also have parts of it going to any contractors that would not be counted in the headcount.

For me, I use Firefox a lot and I'm glad that they are financially healthy. Mozilla is tiny compared to the behemoths and it's nice to know that it's not going away soon because of mismanaged finances.

Re:FRAND is a red herring

[whisper_jeff]

This is up AGAIN???

Screw it - I'm going to copy-paste a blog post I wrote back when this was making the rounds before.

-----

"Good artists copy; great artists steal."

Now, obviously, this quote is thrown about in an effort to make Apple and/or Steve look bad and imply that they ripped off ideas from others. Well, the problem is the quote is actually a misquote which thus clouds the point, which is rare for someone of Steve's speaking elegance. Most people who know it's a misquote believe he's misquoting Picasso but the truth is he's misquoted TS Elliot. The actual quote is:

"One of the surest tests [of the superiority or inferiority of a poet] is the way in which a poet borrows. Immature poets imitate; mature poets steal; bad poets deface what they take, and good poets make it into something better, or at least something different. The good poet welds his theft into a whole of feeling which is unique, utterly different than that from which it is torn; the bad poet throws it into something which has no cohesion. A good poet will usually borrow from authors remote in time, or alien in language, or diverse in interest."

Now, when you compare Steve's misquote and TS Elliot's actual quote, you see they actually say basically the same thing but TS Elliot's full quote obviously puts the whole thing into context so the point is understood.

And I agree with it.

I have long believed that there are no more original ideas, just interesting takes on old ideas.

Now, as with Steve's misquote, when expressed that simply, my point can get lost and often has led to people disagreeing with me, strongly. But my point is this - as we grow up, we are exposed to extensive amounts of information that becomes the background noise of our creative processes. As we write, paint, sculpt, compose, and otherwise create, we are influenced, in one way or another, by everything we've seen and heard up until that point. Sometimes the inspiration is heavy and obvious and other times it's subtle and we aren't even aware of it. But we're always influenced by what we've seen up until that point of creation. And good creators put an interesting spin or twist on their inspirations and come up with something that seems and feels new and original. But, at the end of the day, there are no more original ideas, only interesting takes on old ideas.

While many toss around Steve's misquote in the hopes of painting him and Apple in a bad light, they fail to realize that, though he over-simplified a complex issue, he's right. As was TS Elliot before him. Great creators are inspired by what has come before them; they transform and mold and adapt their creation until its something new and wonderful while other creators simply copy without any of the finesse, simply regurgitating what came before.

And, when viewed in the context of Apple, it is clearly relevant. Apple is often touted as being innovative and original by some while others quickly point out that they're just doing what others have done before them. And you know what, both sides are right, which shows that Apple is a "good poet" - they take something and make it into something better, or at least different. They weld the theft into a whole of feeling which is unique. Apple wasn't the first to market with a graphic UI, but they transformed the computer market with Mac OS; Apple wasn't the first to market with an MP3 music player, but they transformed the market with the iPod; Apple wasn't the first to market with a smartphone, but they transformed the market with the iPhone; Apple wasn't the first to market with an ultralight laptop, but they've transformed the market with the Macbook Air; Apple wasn't the first to market with a tablet PC, but they've transformed the market with the iPad. The list goes on and on - they may not be the first, but they transform a market when the enter it.

You don't have to like Apple, but you'd be foolish to ignore that TS Elliot's quote is an accurate portrayal of the company's overall approach. And that'

Re:FRAND is a red herring

[stewbacca]

I think your piece is even more relevant now than it was the first time you posted it. In the context of TS Elliot's quote, just look at all the "bad artist" imitators Apple has caused since the original iPod. Most anti-Apple folks will say Apple copied this or that, but if you stop and look back to the start of the iPod/OS X era, you find many more people copying Apple and very few examples of Apple copying the competition. The only area where Apple has dropped the ball in that regard is with iOS 4 to iOS 5. There were a LOT of features in iOS 5 that Android had had for well over a year. But, as you have eloquently suggested, there are a finite amount of implementations, and when "the best" implementation is discovered, you should implement some version of it. Microsoft, for example, sees other's implementations and decide to try to be different, instead of just being good. They have become the "different for different's sake" company and they are failing. People don't want different, they want good.

Re:FRAND is a red herring

[Cow Jones]

What people object to is not that Apple is taking good ideas and improving on them, but that they then turn around and try to prevent others from doing the same. "No, these are MY rounded corners. You can't have them. Even if our design was inspired by German industrial designers from the 60s." That's not just silly, it's dishonest and cowardly.

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?

[Anonymous Coward]

Apple doesn't want to pay any fees at all, let alone a fairly standard 2.5%. They see FRAND and think 'free'.

That's a goddamned lie.

Apple participates in many patent pools themselves, and they have no issue with paying the same license fees as anyone else. Motorola didn't want to license the radio patents to Apple like they do to everyone else, because they want to use them to get Apple to give up all of the iPhone UI patents.

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?

[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.

Re:Biased quoting much?

[Anonymous Coward]

Excellent.

So, when is apple going to stop using everyone elses technology?
For example,all these radio technology patents?

And really people, why do idiots seem to think apple has a stronger case with 'slide to unlock', roundtangles, and touch-to-launch than massivly complex radio standards that took decades of indepth research in to wireless systems to develop?

APPLE are starting to play desperate here, as was inevitable when they decided they were going to 'own' an area of technology they had no positioning in..

Re:Biased quoting much?

[Rich0]

Slide to Unlock - It's not apples fault it was patented, they're using the system that that's there to be used. It's a crap system, but it's the one their is and that isn't apples fault.

The thing is, none of the other major vendors has been doing that with phones. I don't see vendors suing each other over having green call and red disconnect buttons, and so on. I'm sure one of the vendors had that first.

Just because a system allows you to be a sociopath doesn't mean I can't call you one when you abuse it.

There's some guy living in a home down the street. I have never met him and have no idea if he is a nice guy or not. I can probably ruin his day by filing a lawsuit against him right now for some creatively-devised offense. It probably costs me all of $50 to do it if I'm willing to put in the time, and it will cost him thousands of dollars to fight off. Oh, I doubt I'll get anything for it, but I can certainly ruin his day, and there isn't a thing in the world he can do about it, and it is perfectly legal.

So why don't I do it, even if the guy cuts me off on the road? Simple, I'm not a sociopath. If I were to start acting like one then I'd expect those around me to call me out on it (well, if I really were a sociopath I might not expect them to, but they'd be just as right to do it).

What is legal has nothing to do with what is right. Being evil is a choice.

Patent portfolio not so great, aktsually...

[Areyoukiddingme]

Isn't this bad news for all of those companies who think they've built a huge defensive portfolio of patents to use in countersuits? Even fairly legitimate patents at that. The disinterested observer doesn't have to work very hard to conclude that Motorola's patents are fundamental to cellular phones and are therefore very valuable, while Apple's software patents are worthless duplicates of other people's ideas that shouldn't even be eligible for patent protection in the first place. Despite this enormous disparity, Motorola's countersuit, intended to defend themselves against Apple's foray into legal brigandage, is also dismissed with prejudice. So the fundamental hardware patents they own are useless to them as a defensive mechanism.

Motorola has to be very unhappy right now. Even if their fundamental hardware patents are legitimate and valuable, one of the world's largest smartphone manufacturers has successfully avoided paying royalties for them, forever.

So giant patent portfolios are worth... what, exactly?

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.

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

[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:Misjudged FRAND patents

[DeadCatX2]

Yeah, and if I were to buy Half-Life 2, Half-Life 2: Episode One, Portal, Half-Life 2: Episode Two, and Team Fortress 2 on Steam, it would also be more expensive than buying the Orange Box.

Price of Individual Games: $35.96
Price of Bundle: $19.99

Imagine that. The sum cost of the games exceeds the cost of the bundle. It's almost as if there's a discount on buying the whole package, and buying just an individual game would therefore be more expensive.

In fact, JUST HL2 is $9.99. This one game represents about 50% of the cost of the bundle of 5 games, which "exceeds the product of the percentage of the" bundle "and the value of the entire" bundle.

Hmmm....what did I just find in the Judge's ruling? From page 16 of the ruling...

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.