Featured: Motorola Has Suddenly Pulled Their ITC Lawsuit With Apple Over Seven Patents

Apple Will Pay Motorola No More than a $1 Per Device for Patents

October 31, 2012 - Written By Michael Roberts

Apple’s and Motorola Mobility’s case is nearly upon us. The two tech companies will gather in a court in the Western District of Wisconsin to hash out a license fee for patents that Motorola Mobility owns.

In Apple’s recent statement, the company said it would be willing to pay immediately if the judge set the FRAND rate at equal to or less than a dollar per device. If the judge chooses a higher price, then Apple will fight it every step of the way, and the company will appeal the decision.

Both Apple and Microsoft are in legal battles with Motorola Mobility over the licensing rates for some standard-essential patents (SEPs). Both companies want the court to intervene to set a new means of patent licensing, but Apple is giving a hard dollar amount. Microsoft is more vague in its demands.

Apple wrote about its position regarding the case:

Apple is willing to pay the FRAND rate this Court sets going forward if that rate is less than or equal to $1 per unit for its worldwide sales of covered products, as further discussed below in Section II.D. This is the rate that Apple believes is appropriate in these circumstances, a rate that flows from Apple’s articulated FRAND framework, and the only rate that can be supported by experts at this trial. To the extent the Court sets the rate higher than $1 per unit, Apple reserves the right to exhaust all appeals and also reserves the right available to any party offered a license: the right to refuse and proceed to further infringement litigation. The Court has stated that it intends to set the “current fair license rate for purposes of specific performance.” Dkt. No. 424 at 18. With regard to Motorola’s request for an order requiring Apple to pay Motorola for the past (which is also beyond the scope of the specific performance remedy requested), Apple is confident that parties can negotiate a resolution once the Court sets a FRAND rate going forward.

Who Can Help?

Motorola has bigger problems that Apple just filing a paper about the way the company would like the case to resolve. Motorola’s expert, Dr. Leonard, “cannot testify about a particular rate at trial” since he “did not offer any opinion about what particular rate or range or rates would constitute a FRAND royalty”.

And, even if Motorola Mobility is able to get the case to go its way at all, Apple is willing to keep the case alive for as long as possible.

The maker of the iPhone and the iPad said that it would even be willing to avoid working with Motorola on the standard essentials patents altogether since Apple pays less for much more significant standards-essential patents on its mobile devices.

One more, here’s Apple opinion on the matter.

“Motorola cannot offer evidence at this trial that the rate should be higher than $1 per phone, but to the extent the Court sets the rate higher than $1 per unit, Apple reserves the right to exhaust all appeals and needs also to reserve the right available to any party offered a license: the right to refuse and proceed to further infringement litigation. Make no mistake, that is not an outcome Apple desires. The parties have spent an exhausting two years litigating against each other around the world. But if the Court were to set, for example, the rate Motorola is seeking (2.25% of Apple’s covered product revenue), that would amount to billions of dollars per year. That is orders of magnitude more than Apple is paying for even substantially larger standards-essential patent portfolios. Indeed, over several years such a figure would eclipse the recent entire cost of acquisition of Motorola. In such circumstances, Apple may need Motorola to demonstrate that its declared essential patents are in fact essential patents and worth that amount of money, a hurdle Motorola has thus far been unable to clear with what are presumably its best patents.”

Motorola Mobility will be fighting up for this patent suit.

Source: Foss Patents