Apple Ruling Means Moto Must Honor FRAND Commitments

| Analysis

Apple vs. Moto
Apple and Motorola Mobility were each awarded summary judgements by a federal judge in their mutual patent infringement battle, but Moto’s victory is largely empty, while Apple’s gives the company added ammunition as the trial continues.

Moto

Judge Barbara B. Crabb of the Western District of Wisconsin granted a summary judgement request from Motorola to dismiss antitrust claims by Apple. The action was based not on the merits of Apple’s claim, but rather on the reality that Apple wasn’t able to prove damages caused by Motorola’s patent-related actions.

On the one hand, this summary judgement is important for Moto because it removes the threat of antitrust claims from the proceedings. On the other hand, such claims could be back on the table in the future if Apple could prove damages. Florian Mueller has more on the issue at FOSS Patents.

Apple

Apple’s victory, on the third hand, is very important on a meta level. Apple has accused Motorola of infringing on its design and user interface patents, while Moto has accused Apple of infringing standards-essential patents (SEPs).

There is little doubt that Apple is infringing those SEPs. These are technologies that make up WiFi and 3G networks, and no smartphones can do the job of being a smartphone without using these patented technologies.

What is at stake is how much Apple should be paying to use these technologies. Because Moto submitted their patents for inclusion in the various standards involved, the company was also committing to licensing them for a fair, reasonable, and non-discriminatory (FRAND) rate.

Motorola had demanded 2.5 percent of the retail price of Apple’s iOS devices to license the SEPs, a rate that Apple has argued is far higher than the rates paid by any other device maker. Apple refused to pay that rate, and the company has effectively asked the courts to force Motorola to honor its FRAND commitments.

The company is now a significant step closer to getting its wish. Judge Crabb’s effectively ruled that Motorola is bound by its FRAND commitments, and that those commitments are more than just empty terms to be cast aside when it’s convenient.

And Therefore?

It seems decreasingly likely that Motorola, or Samsung by extension, will be able to get an injunction on Apple’s infringing devices based on SEPs. U.S. courts have been fairly consistent in resisting such actions.

Instead, Apple and Motorola will most likely be required by the courts to enter into licensing agreements that meet the same FRAND terms granted other licensees. This would be a reasonable action in keeping with both the point of SEP agreements and the normal course of FRAND licensing.

At the same time, Apple for the nonce remains free to pursue patent infringement claims against Motorola (the case against Samsung is being tried even now) for patent infringement on patents not covered by FRAND commitments, claims that could result in an import ban. To get around such a ban, Motorola would be forced to stop infringing on Apple’s patented inventions, which is what Apple has said it wants.

Google

This has ramifications for Google, as well. The search giant bought Motorola Mobility for US$12.5 billion, a purchase that was recently finalized (Google announced mass layoffs at Motorola over the weekend). The purchase was seen largely as a defensive measure to boost Google’s own patent portfolio for the larger Apple iOS vs. Google Android patent battle of which the Motorola fight was always a proxy.

Most of Motorola’s patent portfolio relevant to smartphones involves SEPs, and if Google can’t use those patents to force Apple to a mutually-assured-destruction detente, the value of those patents could lessen considerably.

In the end, if Motorola is found to infringe Apple’s patents but is only able to get FRAND licensing for its own patents, Google could be forced to drop key functionality from all of Android or—heaven forfend—innovate its own solutions.

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13 Comments Leave Your Own

furbies

And cue Bosco….....

(Sorry to everyone else, but I couldn’t resist)

Garion

Nice and concise piece, Bryan. Much appreciated. Thank you.

Bryan Chaffin

Thanks, Garion.

daemon

Doesn’t this just mean Apple should be paying Motorola for infringing upon their patents?

Apple still hasn’t shown how 2.5% is not FRAND, and I can’t wait, especially considering Apple wanted $40 per device sold for their patents…...

RonMacGuy

And cue Bosco?.....

(Sorry to everyone else, but I couldn?t resist)

grin

jfbiii

Doesn?t this just mean Apple should be paying Motorola for infringing upon their patents

Of course. And Apple isn’t arguing that it SHOULDN’T be paying Motorola for using their patents. But they don’t believe that they should be paying a rate that’s higher than what other companies paid, because the patents in question were included in the standards at issue at Motorola’s request and with Motorola’s agreement that they would be made available to all comers at [F]air, [R]easonable, [A]nd [N]on-[D]iscriminatory rates. F-R-A-N-D. FRAND. If other device manufacturers pay 1%, then 2.5% is Discriminatory.

Apple still hasn?t shown how 2.5% is not FRAND, and I can?t wait, especially considering Apple wanted $40 per device sold for their patents?...

Apple’s patents aren’t part of a standard. They aren’t available by prior agreement under FRAND terms. See the difference? Apple’s patents aren’t encumbered by Apple’s prior agreement to make them available under a specific set of conditions in return for making them part of a standard.

Motorola is attempting to leverage patents that are encumbered with an agreement to license under specific terms in order to either collect royalties in excess of those terms AND/OR to force Apple to license IP that it does not wish to license. This is exactly what happened with Nokia when the iPhone was introduced. Nokia came out of that scrap smelling like a rose (IMO) but it still hasn’t helped them. Maybe they didn’t get what they thought they were getting. Maybe they just couldn’t execute.

Either way, to most reasonable people this strategy looks like exactly what it is: desperate and shady.

daemon

Apple?s patents aren?t part of a standard. They aren?t available by prior agreement under FRAND terms. See the difference?

LoL! My, you can’t see the forest for the trees, can you?

jfbiii

No, I guess I’m just too [deleted] stupid.

RonMacGuy

No, I guess I?m just too goddamned stupid.

jfbiii,

Illegitimi non carborundum.

Translation:  Don’t let the trolls get you down.

[deleted]

Bryan Chaffin

Keep it polite and profanity-free.

Bryan Chaffin

Daemon, Apple has shown that other companies are paying something closer to 0.000x% (I forget the specifics, but anything less than 0.1% makes the point that Moto (and Samsung) have been trying to abuse the SEP system).

And, jfbii’s point about Apple’s patents not having FRAND commitments is pertinent. There is a massive difference between a SEP and a non-SEP.  This isn’t a forest/trees issue, it’s the whole point.

RonMacGuy

Sorry Bryan, I was referencing a previous TMO urine-related discussion that daemon and I were having last week.

All in good pee pee fun!!

jfbiii

Not all of us believe in god. smile

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