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So, this wasn't a trial about Apple using patents against Motorola. It was Apple filing suit against Motorola's use of patents against it. Basically, when a s

by mdasen 14y ago

So, this wasn't a trial about Apple using patents against Motorola. It was Apple filing suit against Motorola's use of patents against it. Basically, when a standard is created the standard will likely use patented technology. Think about H.264. It isn't free. However, it is open (anyone is allowed to create hardware and software using the standard, so long as they pay the fee). Also, that fee is the same for everyone. These terms are FRAND (fair, reasonable, and non-discriminatory). It's essential for standards to ensure competition. Then there are things that aren't standards. I'm not saying that you should agree with patents or anything like that, but they do exist and this distinction is made. If you hate patents (and I'm not saying you shouldn't), then they're all bad and we should get rid of them all. Disclaimer aside, let's say that you patented having 3 buttons on a phone (home, back, menu) ala some Android phones. There are many other ways to implement that functionality. Maybe that's the best combination of buttons and users love it. However, even in the Android world, we see phones with on-screen keys and no buttons, ones with 4 buttons, etc. You could even do something cool like a touch area with swipe left for back, touch for home, and swipe right for menu. Nothing there would kill your ability to create a device worthy of people spending money on. Taking a real-world example, let's look at Apple's bounce-back function for over-scrolling. Android 4 now does a highlight on over-scroll rather than the bounce-back. While a user might say, "the bounce-back looks better", it doesn't prevent a party from creating a device worthy of users' money. Now, if you can't send signals using the technology that cell sites use, that does prevent one from making a device worthy of users' money. Those patents are standards essential. Now, when groups set standards, they will work around the patents of any company that doesn't want to license their patents under FRAND terms. However, companies want standards to use their technology because while they might not be able to extort money, they're guaranteed that everyone will use it. There's a big distinction between things you have to license and things you can implement differently with a little creativity and, as such, we treat them differently. In the Apple/Motorola case here, Motorola (along with others like Nokia, Ericsson, Siemens, others) helped develop the wireless standards. They have to license their patents under FRAND terms. However, many of them want Apple to pay more per device than competitors. Part of this is that Apple has sucked up most of the profit in the industry and they want it back. Before Apple, Nokia was doing pretty well. Now? Motorola had been sliding for a bit, but Apple certainly helped that along by creating much better devices than pre-Android Motorolas. Basically, there are patents that you're required to use and since you're required to use them (you can't build a phone without them), they have to be licensed under fair, reasonable, and non-discriminatory terms. The FTC looks like they will recommend that the government file suit against Google/Motorola over what the FTC sees as Motorola abusing these standards essential patents against Apple and Microsoft (http://www.bloomberg.com/news/2012-11-01/ftc-staff-said-to-formally-recommend-google-patent-suit.html http://www.bloomberg.com/news/2012-11-01/ftc-staff-said-to-f...). So, this isn't a suit about Apple pushing UI patents against Motorola that got tossed here. This was Apple trying to get Motorola to license their technology under FRAND terms. It seems that the disagreement is over the percentage model that Motorola wants. Motorola wants 2.25% of the full retail price of the device. So, if you make a dumbphone for $35, you pay 79cents. If you make a 16GB iPhone 5, you pay $14.63. Somewhat ridiculously, if you make a 64GB iPhone 5, you'd pay $19.13. Apple seems to be arguing that FRAND means that you can't discriminate like that. Motorola, still losing money, wants a large portion of those profits while still being able to profit off of cheaper devices. One can make the argument that the percentage model is non-discriminatory, but it doesn't fly well by me. Non-discriminatory isn't with respect to the price of the device or the money you're making off of it.

revelation 14y ago
Doesn't the non-discriminatory part just mean you have to license these patents to everyone who is willing to pay the fair and reasonable price? I don't see why that term would have any connection to individual products, and setting a different price for each product is reasonable accounting for the volume you expect to be sold of the product and the importance of the patented functionality to the product. Frankly, it's a cell phone, so you could argue that the technology being licensed here is the core of the product.
caf 14y ago
FRAND doesn't mean that the fee is the same for everyone. FRAND royalty deals are negotiated on a case-by-case basis - such deals will often include a cross-license for some of the other party's patents, and this will tend to reduce the royalty paid.
- matwood 14y ago
  such deals will often include a cross-license for some of the other party's patents I seem to remember reading this was the main sticking point. Apple didn't want to do any cross licensing while still paying a low royalty.
czhiddy 14y ago
Aren't these FRAND patent fees handled through the actual baseband chipset manufacturer? From a logistics point of view, it seems like it would much simpler for Qualcomm to charge each of the licensees a fee for using the licensed tech present in their chip. Otherwise, it's all x FRAND committee members going out and looking for fees from all y manufacturers that use the patents in question.
- wmf 14y ago
  It probably should be handled that way, but that would mean much less money for Motorola. 2% of a $20 baseband isn't much.
naner 14y ago
First of all, I think it might be good if the FTC sue Motorola to explicitly nail down how FRAND patents can be used. Secondly, I'm happy to see Motorola (Google) going after Apple and Microsoft with these patents. They are the two greatest perpetrators of unreasonable software patent abuse and they also both helped shape the system as it currently exists. To be clear: If Motorola were going after other companies, I would have a problem with that type of behavior. Apple and Microsoft, however, deserve every kind of patent abuse they are getting (and then some).

by mdasen 14y ago

revelation 14y ago

Doesn't the non-discriminatory part just mean you have to license these patents to everyone who is willing to pay the fair and reasonable price? I don't see why that term would have any connection to individual products, and setting a different price for each product is reasonable accounting for the volume you expect to be sold of the product and the importance of the patented functionality to the product. Frankly, it's a cell phone, so you could argue that the technology being licensed here is the core of the product.

caf 14y ago

FRAND doesn't mean that the fee is the same for everyone. FRAND royalty deals are negotiated on a case-by-case basis - such deals will often include a cross-license for some of the other party's patents, and this will tend to reduce the royalty paid.

matwood 14y ago
such deals will often include a cross-license for some of the other party's patents I seem to remember reading this was the main sticking point. Apple didn't want to do any cross licensing while still paying a low royalty.

czhiddy 14y ago

Aren't these FRAND patent fees handled through the actual baseband chipset manufacturer? From a logistics point of view, it seems like it would much simpler for Qualcomm to charge each of the licensees a fee for using the licensed tech present in their chip. Otherwise, it's all x FRAND committee members going out and looking for fees from all y manufacturers that use the patents in question.

wmf 14y ago
It probably should be handled that way, but that would mean much less money for Motorola. 2% of a $20 baseband isn't much.

naner 14y ago

First of all, I think it might be good if the FTC sue Motorola to explicitly nail down how FRAND patents can be used. Secondly, I'm happy to see Motorola (Google) going after Apple and Microsoft with these patents. They are the two greatest perpetrators of unreasonable software patent abuse and they also both helped shape the system as it currently exists. To be clear: If Motorola were going after other companies, I would have a problem with that type of behavior. Apple and Microsoft, however, deserve every kind of patent abuse they are getting (and then some).