Apple's FRAND lawsuit against Motorola dismissed in US

[FerrariEnzo]

FOSS Patents: Judge cancels trial, tosses Apple's FRAND lawsuit against Google's Motorola Mobility

So apple sues Samsung for billions..
Uses other company patents and doesnt want to pay.. talk about trying to make a huge profit!

[shenmecar]

Apple

[dangonay]

Originally Posted by FerrariEnzo

So apple sues Samsung for billions..
Uses other company patents and doesnt want to pay.. talk about trying to make a huge profit!

Imagine if Microsoft charged Dell $50 for every PC that shipped with Windows 8. Dell sells some PC's to Ford and some to Chevy. Microsoft doesn't like Ford, so they go to Ford and say: "Dell didn't have a right to sell you Windows 8, so you now owe us $150 to continue using your PC." Would anyone think it was OK for Microsoft to charge twice for the same OS? Would anyone think it was OK for Microsoft to tell Dell who they can and can't sell their PC's to?

This is exactly what Motorola is trying to do.


Motorola had licenses with Infineon and Qualcomm to make baseband chips (the chips that allow you to build a cell phone). Infineon and Qualcomm sell these chips to dozens of cell phone companies. Infineon and Qualcomm start selling to Apple. Motorola doesn't like this so they cancelled contracts with both Infineon and Qualcomm. Motorola then went to Apple to get more money from them directly.

Apple sued to prevent Motorola (it was pre-empteive since Motorola was going to sue Apple anyway) from trying to double-dip. That is, collecting royalties from Qualcomm who makes the chips and collecting again from Apple.


This is a minor issue, but as usual, you're trying to grasp onto any bad news about Apple and run with it. Apple still gets to use the patents and Motorola isn't getting paid anything. Apple has stated publicly all along it expects to pay Motorola for a license, but they want it on FRAND terms, not Motorola's outrageous money-grabbing terms.

[GLOW]

trying to keep track all of this is totally give me a

i had to read dangonay's example slowly so i could follow correctly

[dangonay]

Originally Posted by GLOW

trying to keep track all of this is totally give me a

i had to read dangonay's example slowly so i could follow correctly

It's not difficult at all. No more than 2+2=4.

The problem arises because Apple is the one saying 2+2=4, and there are a lot of people who can't stand Apple so they're trying to argue 2+2=5.

Case in point: the large number of people who still don't understand the difference between a FRAND patent and a regular patent, despite it being explained a thousand times times over on pretty much every tech blog that's ever covered the subject.

[dangonay]

HTC and Apple settle all their legal disputes and enter into a licensing deal for the next 10 years. All patent litigation disputes have ended.

Apple Press Release

So Apple has now settled disputes and entered into licensing agreements with HTC, Microsoft and Nokia. Samsung was offered a license deal before their recent court loss to Apple and refused. After Samsung lost to Apple there were rumors Google and Apple held meetings over licensing issues related to Android,but nothing has been finalized yet.

So much for all the people who say Apple refuses to license.

[Graeme S]

I think the biggest problem with FRAND is the FR. Do we look at it as Fair and Reasonable in terms of "equality", or do we look at it as Fair and Reasonable in terms of "equity", or do we look at Fair and Reasonable in terms of "what can be paid"?


Apple makes the biggest margins in the industry, it's fairly common knowledge. Some would say that asking a successful and profitable company to pay more is unreasonable--"why should successful people pay more?".

This same argument is used often by people who are in higher income brackets to justify why they shouldn't pay additional taxes.


I'm not at all saying that I can read the Judge's mind, or what the case history is, or anything else. What I am saying is that I don't think it's unreasonable for a company--ANY company--to ask for more money from one that has what are nearly 100% profit margins over cost on their devices and a market cap that dwarfs the next ten listed companies combined than one that is regularly making an operating loss in order to try and break into the market.

In this case the two examples? Apple and LG.



I am not a lawyer. I'm not a patent expert. I think that systems--many systems--are broken. I'm not trying to judge by the word of the law here. I think it's really more important to listen to the spirit of the law. The law that seeks Fair and Reasonable access.

Not Equal. Fair and Reasonable.

[dangonay]

^ What about the "AND" part of FRAND? "and non-discriminatory"

I would say asking more from a successful company would be "discriminatory". So would asking more from a competitor. These aren't taxes, they are fees to use a patent. A patent is a commodity, and charging one company more to buy the same commodity is not "fair". Should Best Buy have three price tags on all their products for people who are poor, middle class and wealthy?

[Graeme S]

While I acknowledge your points, I think the underlying comparisons are somewhat faulty.

Being the end user of a device after purchasing it, and licensing something in order to make a profit are two slightly different things. In the end, it comes down to what the court defines "discriminatory" to be. As everyone has pointed out, It's standard procedure for almost everyone to negotiate for the amount of money paid to a patent holder. I'm not sure about case law, but I would find it mildly surprising if any company set a single straight-up price for any type of licensing agreement.

If discrimination means "treating anyone differently at all for any reason", then you may be right. If discrimination means "saying no for no reason/just because you don't like them" then you may not.


As far as your best buy analogy, I can understand how you would draw the parallel. That having been said, I think a better analogy for the situation in my mind is taxation. People who make more can afford more. If the system is built towards paying based on amounts of profit, it will encourage companies to do more licensing--the more profits each company makes, the more it will make from licensing out its technologies.

[dangonay]

^ Why do you equate a patent to a tax? As I stated a patent is a commodity and should be treated as such. You're also missing a few key points in all this:

Motorola donated their patents to become part of a standard. Nobody came along and forced them to do so, and Motorola was fully aware of the pros and cons of having their patents become part of a standard.

The standard practice in licensing patents is a per unit royalty fee, with a sliding scale based on volume. That is, the more units you sell the lower the per unit price goes. This is just common sense - everyone knows if you buy bulk you get a better price. Many companies (like Microsoft, for example) also use the cap system. Once you hit the cap you don't pay any more even if your sales triple. Motorola doesn't want to give Apple any volume discounts or use a cap.

Having companies pay more because they're more profitable is asinine (we're talking about commodities, not government taxation). Why punish companies who make devices people want? Or companies that are more efficient or have better engineers? Why give companies with inferior products a break? If you make crappy products you deserve to go under while the companies with good products thrive. That's the same mentality freeloaders use when they say we should tax the wealthy more so they can sit on their asses and collect from social services. I don't think producing sub-standard products should be rewared.

Motorola and Samsung are shooting themselves in the foot in their obsession to go after Apple. Let's say Intel and Motorola both come up with a patent for USB 5 devices and cables. The USB IF (who overseas USB standards) looks at both Motorola's and Intel's specs and must decide whose patents become the standard for USB 5. Both systems are equally good.

Now the USB IF looks at Intels track record with FRAND patents. They read Intels official company policy on FRAND which states they will not sue to seek injunctions based on FRAND patents. They then look at Motorola and see how they were abusing FRAND patents in their cases against Apple and Microsoft. Who do you think the USB IF is going to pick when they have two equally good patent pools, but one company has a history of abusing FRAND patents?

Samsung and Motorola have been repeatedly shot down in courts all around the world where they tried to use FRAND patents against Apple. All they've got to show for it are antitrust investigations (Samsung in the EU and Korea, Motorola/Google also in the EU and the US).

I'm wondering why you think their practices are OK when Korean, US and European regulators are all launching investigations (and the FTC looks set to actually file a lawsuit against Google/Motorola any day now). Are they all in Apple's pockets? Did they all get iPads for Christmas? Are they all stupid?

[Graeme S]

As I've said before, I don't have a full grasp on all the legal mechanics--I am far from an expert and indeed very much a layman in these situations. The points you bring up are are extremely reasonable and fair. I don't have an answer for all your questions, nor do I think anyone but a patent lawyer could.

My comments are coming from the sidelines, and I find it interesting and odd the way the chips are falling the way they do. Each side wins cases I think it should lose, and loses I think the other should win--not because of preference, but because of the way that people such as yourself have laid out the case.

If it is as you say, and if they are and have been violating their standards-essential FRAND patents, then by all means they should be punished. But it seems by the way the judgements are falling that either they haven't, or the evidence suggests something else, or that the companies are essentially complaining to mom and dad that the other guy is making too much or doing too much and the Justice system (that's mom and dad) are getting sick and tired of officiating.


As far as investigations, I think there are a lot of investigations both that need to get made and that are getting made and that are in process right now; but an investigation is not proof of wrongdoing.


Ah, and as far as the patent/tax mentality, I didn't mean it as a direct analogue; it simply seems to me that it would be a reasonable analogy. Company B comes to Company A and wants to license their patent. A asks how much they want to pay, and B gives an offer. A says that's too low, suggests a counteroffer and so forth and so on. The company that makes more money can afford to pay more for a patent license, and as such the more successful companies pay more and/or are more likely to acquire patent licenses in general. I get the bulk discount, and I have no doubt that it would apply in this case as well, but that (in my mind, at least) doesn't negate the mentality of "the guy who has more [can/does] pay more". Not a tax, per se, but a sliding scale based on the amount of money at one's disposal.