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Apple threatens UK market exit if court orders 'unacceptable' patent fees
- onion2k 5y agoHow much the fees should be and how Apple react to them are separate issues. Given the fact that Apple Retail UK posted a profit of just £39m in 2020 though, it seems likely that they'll have to exit the market as they won't be able afford even a reasonably low patent fee. Assuming that their reported profit wasn't just a massive lie to avoid tax, obviously.
- tudorw 5y ago"An estimated 19,452 iPhones were sold every day in the UK in 2019", give them a break, obviously struggling to get traction.
- mhandley 5y agoSo that's around 7 million phones per year. Assuming around £700/phone and 30% profit (very rough made up numbers), that should be £1.5B/year profit. If the judgement is for £3B to £5B as the article states, I can see why they might decide to exit the UK market. But that only makes sense if they don't then lose the patent cases in other juristictions, and end up having to pay similar royalties anyway.
- gcthomas 5y agoI'm not sure that leaving the market will absolve Apple of paying the judgement, so staying in the UK market will help them recoup the cost. Leaving would be unlikely to improve their bottom line, so the judge was right - no evidence Apple will leave. This is just posturing, which won't go down well in front of a High Court judge.
- willis936 5y agoWhy would Apple pay the fine?
- tonyedgecombe 5y agoTo avoid their executives going to prison.
- willis936 5y agoTheir executives in the US? Going to trial in the UK, where the company would no longer do business? How does that work, exactly? Has the US ever extradited a white collar criminal?
- tonyedgecombe 5y agoThey have executives in the UK.
- willis936 5y agoWhy would they have executives in a country that they don't do business in?
- tonyedgecombe 5y agoThey do do business in the UK, as you well know.
- willis936 5y agoThey wouldn't if they were fined, as the headline and article clearly state.
- throwawaycities 5y agoExactly, they don’t seem to respect others’ legally enforceable IP, the engage in tax avoidance schemes…why would Apple pay a court ordered judgment for damages? Wait is that not what you meant?
- onion2k 5y agoThe £3-5bn fee is a one-off payment (I think..), so you can't really compare it to a single year's profit. It'd need to be amortized against the lifetime of all the iPhone products that are covered by the patent.
- Zenst 5y agoIn 2020, the UK was still part of the EU and with that Apple could and did move much EU based sales to Ireland for tax purposes. So with that in mind, along with how companies game the tax systems, I take any figure with a pinch of salt. That said Apple postulating this as retaliation to a legal court case pertaining to a valid patent, does seem a bit purile. But the real question I have is - if these are core patents as they seem to be (not read the patents but mention of 3g and 4g connectivity mooted) then I would of thought FRAND would take presedense https://en.wikipedia.org/wiki/Reasonable_and_non-discriminatory_licensing https://en.wikipedia.org/wiki/Reasonable_and_non-discriminat...
- denton-scratch 5y agoApple's profits fetch up in some tax-haven, as far as I'm aware. They have a problem, because they hold so much cash in tax-havens, that they can't repatriate without incurring enormous tax liabilities. So yes, the reported profit was just a massive lie.
- Nasrudith 5y agoBad global precedent can be far more expensive and damaging than a mere $39M.
- Brian_K_White 5y agoThe reported profit is probably a joke, since they devize ways to under-report to pay less tax.
- benjaminjosephw 5y agoThe UK has a relatively strong chance of creating decent competitive challengers to Apple if the UK market opens up with their exit. Even if a few consumers are frustrated in the short term this could lead to a fantastic outcome for a competitive consumer marketplace over the long-term.
- Zenst 5y agoReading https://www.techradar.com/uk/news/apple-app-store-was-a-major-source-of-uk-jobs-and-income-last-year https://www.techradar.com/uk/news/apple-app-store-was-a-majo... I'd say it is not so much the consumers that would be impacted by such a hissy fit that Apple has mooted.
- sdflhasjd 5y agoOf course, that's a claim from Apple in response claims of anticompetitive behaviour. I find it difficult to believe, as a mobile developer myself, that 330,000 jobs are being supported by the App Store in any meaningful way.
- ben_w 5y agoSounds about right to me. Fermi estimate: apps-not-abandoned * average-developers-per-app-this-year ~> 2 million apps * 2 developer-months ~> 333,000 developers
- sdflhasjd 5y agoUK jobs. I know "meaningful" isn't well-defined, but more than 1% of the entire UK workforce is not dependent on the App Store (that couldn't be replaced by any other app marketplace)
- ben_w 5y agoAh, I missed that. That does make a difference, and I could only justify it in the unlikely event of a decent percentage of those apps being for businesses specifically dependent on iOS apps in particular rather than mobile phones and websites in general.
- amelius 5y agoWhen a quasi-monopolist threatens to exit your market ... perhaps the reason why isn't really all that important.
- DocTomoe 5y agoSure. On the other hand, this will create societal backlash, not against Apple, but against the government. Tracy needs her iPhone.
- marak830 5y agoMaybe it's time Tracy grew up. Flippant answer aside, we need governments to learn to stand up more against the superlarge multinational companies that think they can bully their way over what a countries government thinks is good for the population. (I know a whole bunch of hand waving - elected by the people for the people that doesn't always work). We should applaud a government for standing up though.
- fallingknife 5y ago> what a countries government thinks is good for the population Sounds like China
- marak830 5y agoSounds like what is supposeto happen when we elect officials to do our bidding.
- FridayoLeary 5y ago>We should applaud a government for standing up though. Don't get excited, it's just one Supreme Court justice, who has very little to lose either way. No one has even heard of these guys before. I don't believe that Johnson would have the backbone to do such a thing.
- forty 5y agoThat indeed feels like a great opportunity to create something new :) though I'd rather it happening not because of patent trolls :/
- pabs3 5y agoHmm, I wonder what the patents are about.
- chasil 5y agoThe article implied that it was for 3g and 4g radio-related patents.
- bell-cot 5y agoA slightly-critical point, which seems 99.9% ignored here. I found an article - https://www.iphonehacks.com/2021/07/apple-threatens-exit-uk-market-unfair-patent-licensing-fees.html https://www.iphonehacks.com/2021/07/apple-threatens-exit-uk-... - saying "A UK high court judge has ruled that Apple has infringed on two patents of Optis Cellular.". But nothing more. If the 2 patents are "good quality" - really novel, not a bit obvious to actual experts in that niche (at the time), etc. - then the reasonable (morally, not legally) argument would be about what is a fair rate for Apple to pay to use them. If the 2 patents are "the usual patent system abuse crap" - vague walls of buzzwords, prior art but with "using $NameOfNewTechnology" inserted in a bunch of places, or such - then the reasonable argument (again morally) would be about why our wretched legal and patent systems are so badly infested with such toxic swill. But Apple's seeming threat to exit the UK market makes for a lot of drama, and that's mostly what people care about.
- mjburgess 5y agoLet's be clear. This is a patent troll company engaged in anti-innovation rent-seeking behaviour. They're seeking billions in payouts and provide zero innovation, research, development, etc. Just because it's targeting Apple doesn't make it right. Companies of this type should be illegal. A patent is a government-sponsored monopoly which shouldn't be "pooled" by "patent companies" whose only purpose is to use the state to extract money from companies actually producing goods. All people holding patents need to be innovating with them, or otherwise, lose them after a short period.
- Black101 5y ago> All people holding patents need to be innovating with them, or otherwise, lose them after a short period. A patent only last 15 or 20 years... copyright is a much bigger issue (copyright protection lasts for the life of the author plus an additional 70 years).
- tut-urut-utut 5y agoIn this case, I'm glad it's actually targeting Apple. There are a bunch of small innovative companies targeted by patent trolls that don't have means of Apple to fight back and actually change the system to be more level-headed. But I'm afraid Apple will not fight for the reform of the patent system, but will just try to protect itself. In which case I don't care about the outcome, since Apple also uses the same patent trolling tactics elsewhere to suppress its competition, e.g. litigations against Samsung in Germany, to name one such case.
- Tenoke 5y agoThey are literally fighting it with this case, no? Exiting if they fail will also be great as it might become more clear to those who can change the system how much of a detriment it is.
- mjburgess 5y agoIf apple's UK iPhone profits really are in the c. 50mil range, then a (5 to 10)bn fee to remain is commercially non-viable. Note that this is about Apple's ability to sell an iPhone in the UK, and as far as I can see, it wouldnt affect whether the entire company would remain in the UK. If I were apple, I would withdraw a product from a country which supported this kind of racketeering.
- henearkr 5y agoWhen I read "patent company" I can't help but understand it as "patent troll". A company specialized in making money from patents can't be any good...
- ben_w 5y agoThe quote in the article didn’t read like a threat to me. I don’t have the full context, but the quote from Apple’s lawyer is: > I'm not sure that is right. Apple's position is it should indeed be able to reflect on the terms and decide whether commercially it is right to accept them or to leave the UK market. There may be terms that are set by the court which are just commercially unacceptable. Perhaps that’s diplomatic lawyer-speak for “we’re leaving and taking our ball with us” (any lawyers please do comment), but as an outsider I don’t see it.
- MR4D 5y agoIt seems like this is the part that most offends Apple: “* In 2020, the UK Supreme Court ruled a UK court can set the rate for patent payments worldwide, despite the court only being able to consider the infringement of UK patents.*” If every country took that approach that the UK Court seems to be taking, international trade would suffer greatly.
- gcthomas 5y agoThis is not for patent disputes in general, only disputes involving standard essential patents (SEPs), which these are. The court took standards setting organisation powers to decide fair, reasonable, and non‑discriminatory (FRAND) terms for global application. FRAND licences are global by their nature, so we shouldn't be surprised that the Supreme Court asserted this in its decision. This isn't UK over-reach, but an application of international standard approach, afaict.
- ksec 5y agoFor reference the King of all 3G/4G and 5G patents Qualcomm only charge ~$7-$15 per devices depending on how you count the rebate on Modem. >In 2020, the UK Supreme Court ruled a UK court can set the rate for patent payments worldwide, despite the court only being able to consider the infringement of UK patents. A trial in 2022 will determine how much Apple will have to pay. From my limited reading I think and correct me if I am wrong that is why the numbers it so large at $7B. It is basically if a patent that is ruled valid in the UK, the company will have to pay the fees for it worldwide, i.e ~250M unit per year and all the past years of infringement. The only way to not have to pay would be to get out of the UK market so the company will have to have its patent on trial in court in every other country. There is no way that $7B was made solely on the iPhone sold in UK. The numbers just dont add up. >> I'm not sure that is right. Apple's position is it should indeed be able to reflect on the terms and decide whether commercially it is right to accept them or to leave the UK market. There may be terms that are set by the court which are just commercially unacceptable. This is not a threat. But a valid argument, which is so rare from Apple. It is not the first time Apple has threaten to leave the market in numerous other occasions such Australia, Germany, or EU.
- nickpp 5y agoI wish more companies would have the guts to fight all these crazy government requests and regulations. Let the people choose if they want to lose the services they rely on so that some politician has a glory bulletpoint on his CV. Alas, the money is too sweet and hard to say no to...
- tpoacher 5y agoSimilarly I wish more democratic governments would have the guts to fight all these crazy corporate monopolies. Let the people choose if they want to allow unstifled innovation rather than rely on sneakily created monopolies, so that some CEO has another bonus this year. Alas, the lobby money is too sweet and hard to say no to...
- rio_de_mierda 5y agoBrexit really helps the UK’s leverage here. As the dominant economy in Europe, the UK can unilaterally set policies and reasonably expect multinational companies to comply with them. Their threats bear real weight. If I were Tim Apple, I’d be experiencing existential terror right now.
- ginko 5y agoThe dominant economy in Europe is Germany. The UK has more or less the same GDP as France. https://en.wikipedia.org/wiki/List_of_sovereign_states_in_Europe_by_GDP_(nominal) https://en.wikipedia.org/wiki/List_of_sovereign_states_in_Eu...
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- FridayoLeary 5y agoApple aint throwing away a multi billion pound market so cheaply (relatively speaking, of course and "aint" is a real word)
- tpoacher 5y ago> Apple threatens UK market exit if court orders 'unacceptable' patent fees Yes, please.
- cma 5y agoThy should be happy with a charge of 30% of gross sales, it is their industry standard.
- betwixthewires 5y agoI'm not a fan of patent trolls, and I don't generally like intellectual property or how it is implemented, but this is a bad look for Apple. A court does "justice" according to it's own law and a party in the court tries to throw it's weight around to get the country to not enforce it's own law on them. This is a huge company trying to be above the law.
- tsegratis 5y agoI suggest register patents -- so that they become public knowledge Then anybody can implement it; there is no restriction Then there is a preset scale, partly set by the value the inventor gives to the invention, but also set by supply and demand. So the inventor cannot price themselves out of the market, but still has incentive to publish. Possibly a market place where companies make non exclusive bids Patent '''trolls''' are a separate issue Probably the best solution is for litigants who loose; to pay a more realistic evaluation of damages for the court case to those who successfully defend themselves. This would include paying above damages, because presumably those who defended themselves should be paid for the extra work forced on them, etc Alternatively for low to zero value patents, where a few years have elapsed, the onus first falls on the patent holder to demonstrate its worth