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Posner Dismisses Apple/Motorola Case, With Prejudice 146

Posted by Soulskill
from the get-out-and-stay-out dept.
whisper_jeff writes "Judge Posner has dismissed the patent case between Apple and Motorola, with prejudice (meaning they can't refile), putting an end to this patent dispute between the two companies. Posner wrote, 'Both parties have deep pockets. And neither has acknowledged that damages for the infringement of its patents could not be estimated with tolerable certainty.' I know many on Slashdot will be happy to hear Apple's lawsuit failed; I am happier to hear that Motorola has been prevented from abusing FRAND patents, a situation I feel could set a very bad, very dangerous precedent for the entire industry."
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Posner Dismisses Apple/Motorola Case, With Prejudice

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  • by Anonymous Coward on Saturday June 23, 2012 @01:14AM (#40419203)

    ...we have a judge that DOESN'T have his head up his ass?

  • by rtfa-troll (1340807) on Saturday June 23, 2012 @01:20AM (#40419221)

    FRAND is just another patent cartel and we have no reason to care about it. FRAND standards organisations should be seen as a form of illegal cartel.

    Even funnier is that Apple and Microsoft, who have completely failed to get licenses for these FRAND patents go around attempting to mug people with knives and start crying like babies when companies like Motorola that have actually done some serious research in their lives pull out a combat shotgun. "Want to make my day?".

    • by SuricouRaven (1897204) on Saturday June 23, 2012 @01:37AM (#40419263)
      I notice that the F is for 'fair' not 'free.' Noncommercial users, espicially free software, tend to get excluded as they can't afford the royalty. This is why Firefox doesn't support h264 video.
      • by martin-boundary (547041) on Saturday June 23, 2012 @02:26AM (#40419393)
        And that's a good thing. The Free Software community shouldn't get suckered into using proprietary formats. We're here for the long haul, not to line some turtleneck sporting CEO's pockets.
        • Re: (Score:2, Insightful)

          by khipu (2511498)

          It wouldn't be "proprietary" if it actually were required to be freely licensed.

        • Re: (Score:3, Interesting)

          Really? Tell me how Mozilla justifies paying on average $60Million for software development ($88Million in general salaries), bearing in mind that if all their 250 or so employees are only costed against software development, then that gives them an average salary of $245,000. Of course, rough numbers all based off the 2010 financials, and I low balled the calculations deliberately because not all those 250 or so employees are costed against software development...

          Mozilla, long the poster child for open so

          • by iserlohn (49556) on Saturday June 23, 2012 @04:50AM (#40419765) Homepage

            I'm guessing not all of the money in the software development budget so to the software developers salaries - you have the overhead of hiring the employees, including desk space, HR, etc. You have expenses related to software development including test infrastructure, external testing, etc. Furthermore, you would also have parts of it going to any contractors that would not be counted in the headcount.

            For me, I use Firefox a lot and I'm glad that they are financially healthy. Mozilla is tiny compared to the behemoths and it's nice to know that it's not going away soon because of mismanaged finances.

          • by BronsCon (927697)
            free != Open Source
            free != Free
            Free != Open Source

            Just because you can see the source for some piece of software doesn't mean no money changed hands in its creation. Likewise, just because some piece of software is given away at no cost does not mean you can do whatever you want with it. More to the point, just because you can see the source to some piece of software does not mean you can do whatever you want with it.

            free == no cost
            Free == do whatever you want with it
            Open Source == you can see the
            • Thank you for re-defining English grammar. What happens if I need to use the word "free" at the beginning of a sentence?
              • by BronsCon (927697)
                Ambiguity. We already have to deal with it in many other cases, why not learn to deal with it here?
      • "Fair" is newspeak for "cartel".

    • by khipu (2511498) on Saturday June 23, 2012 @03:29AM (#40419543)

      For all their faults and inability to create decent software, Microsoft actually spends a lot of money on research. Apple, however, doesn't; Apple just "steals" other people's ideas and inventions (according to Steve Jobs himself).

      • "Spending money on research", should actually read 'spending money on researchers'. Microsoft's research deparment is infamous for buying up the best; locking them away in a guilded cage and making sure they never deliver something to the real world. Now that might seem great; the guys get to do fundamental long term research; but these are not physicists. Microsoft typically picks people, like those that started Haskell, who have had very deep theoretical insights and are very close to delivering thos

        • by khipu (2511498)

          Microsoft's research deparment is infamous for buying up the best; locking them away in a guilded cage and making sure they never deliver something to the real world

          In different words, Microsoft is spending money on research, as opposed to products.

          Microsoft typically picks people, like those that started Haskell, who have had very deep theoretical insights and are very close to delivering those to the real world. Their existing research gets blocked and they go off on a tangent.

          Is that the latest conspirac

    • by sribe (304414)

      Even funnier is that Apple and Microsoft, who have completely failed to get licenses for these FRAND patents go around attempting to mug people with knives and start crying like babies when companies like Motorola that have actually done some serious research in their lives pull out a combat shotgun. "Want to make my day?".

      They have not "completely failed to get licenses". In one case, they have purchased chips from Qualcomm, who licensed the patents for use in those chips. Later Motorola sent Qualcomm a letter purporting to revoke that license for the chips that Qualcomm was selling to Apple. In other cases, companies (Nokia I think?) have demanded from Apple royalties that far exceed what they charge anyone else and are completely out of line for the patents in question--which of course is exactly what the agreed *not* to d

  • by Anonymous Coward

    Has a court case over patents ever not been settled? Seems to me like they're deliberately avoiding judicial scrutiny by bailing just before software patents are determined to be valid or not.

    • Re: (Score:2, Informative)

      by Anonymous Coward

      Umm....try the Oracle v Google case.

    • by tepples (727027)

      Has a court case over patents ever not been settled? Seems to me like they're deliberately avoiding judicial scrutiny by bailing just before software patents are determined to be valid or not.

      There was the Bilski case, for one. That went all the way to the Supreme Court.

  • Biased summary much? (Score:5, Informative)

    by arkhan_jg (618674) on Saturday June 23, 2012 @02:23AM (#40419385)

    Motorola has licenced its FRAND patents to many companies, and the price is their standard one. Many other companies in the mobile phone space have reached agreements on those terms - Nokia, Ericsson, RIM, Samsung, LG, and HTC have all done so, for example. However, those companies also have relevant FRAND patents, so everyone cross-licences their patents to each other, allowing them all to operate. They all bring their patents to the table, share them with each other, and crack on with making phones. Those with small patent pools may end up paying the larger players under FRAND terms - anything up to 5% is standard.

    Apple doesn't have such radio patents - they haven't been involved in inventing the essential standards for wireless comms, phones etc. So the normal process would be either to pay the standard patent licence fees which FRAND standards involve to 'buy in', or cross-licence some of their own software patents in exchange.

    Apple doesn't want to pay any fees at all, let alone a fairly standard 2.5%. They see FRAND and think 'free'. Nor do they want to cross-licence any software patents, as they want to drive all android phones from the marketplace. Apple sued motorola and sought injunctions to stop them selling phones. Same with samsung.

    Apple spent years trying to avoid paying nokia's patent licence fees for FRAND patents, and eventually settled the lawsuit - they ended up paying £700m lump sum plus £7 an iphone in licencing costs last year.

    It's doubly ironic that Apple castigates samsung for stealing their unique patents which amounts to a black rounded rectangle shape with icons in a grid on it, yet don't see why they should have to pay up to licence FRAND patents that literally are what makes the phone capable of being a phone.

    And FRAND doesn't mean you can't sue. It just means you have to offer the same licencing price to everyone first - if they pay that, they're safe. The licencing fee can't be too high - which isn't defined - but up to 5% is standard in the industry. But if someone refuses to licence, and then sues you first? That's hardly a dangerous precedent to sue right back, and motorola is far from the first to do so.

    Remember who declared "I will spend my last dying breath if I need to, and I will spend every penny of Apple's $40 billion in the bank, to right this wrong... I'm going to destroy Android, because it's a stolen product. I'm willing to go thermonuclear war on this."

    It wasn't Motorola or Samsung.

    • Biased quoting much? (Score:5, Informative)

      by Anonymous Coward on Saturday June 23, 2012 @02:52AM (#40419439)

      If you're going to quote, quote the reason why.

      Of course, lawsuits are usually made to be settled, but Jobs was having none of it. Meeting with then-Google CEO Eric Schmidt, a man who for years sat on Apple's board before Android made that no longer possible, Jobs told Schmidt that money wasn't going to make it right. "I don't want your money. If you offer me $5 billion, I won't want it," Jobs reportedly said. "I've got plenty of money. I want you to stop using our ideas in Android, that's all I want." And with that, the door to any possible settlement was slammed shut.

      • by Anonymous Coward on Saturday June 23, 2012 @03:14AM (#40419517)

        Excellent.

        So, when is apple going to stop using everyone elses technology?
        For example,all these radio technology patents?

        And really people, why do idiots seem to think apple has a stronger case with 'slide to unlock', roundtangles, and touch-to-launch than massivly complex radio standards that took decades of indepth research in to wireless systems to develop?

        APPLE are starting to play desperate here, as was inevitable when they decided they were going to 'own' an area of technology they had no positioning in..

        • How on earth does anybody justify a 2.5% (or any other percentage for that matter) royalty on an entire computer system based on a patent on some minor (or even major) feature of that system?

          You could argue that GSM patents are inherent to the functionality of a mobile phone, and so justify royalties based on a significant portion of the device price. But even there, the 'making phone calls' part of today's smartphones is not their only (or even, for some people, their most important) feature. And besides

        • by jo_ham (604554)

          Excellent.

          So, when is apple going to stop using everyone elses technology?
          For example,all these radio technology patents?

          And really people, why do idiots seem to think apple has a stronger case with 'slide to unlock', roundtangles, and touch-to-launch than massivly complex radio standards that took decades of indepth research in to wireless systems to develop?

          APPLE are starting to play desperate here, as was inevitable when they decided they were going to 'own' an area of technology they had no positioning in..

          They're not, because they paid to use it. They have licensed the radio technology they use in the iPhone, just like every other phone manufacturer.

          There's a difference between that and ripping off ideas wholesale and not licensing them. Whether you agree or not if Google did that with Android (personally, I don't really think so) does not mean you can call Apple hypocritical for claiming it while they themselves used other technology they have actually licensed.

      • Spoken by a man who stole many an ideas over his time (and note, that I liked jobs)
        • by toriver (11308)

          You CANNOT steal ideas, only take part in their sharing. If I have an idea, and I tell it to you, and you do something with the idea, I still have the idea too.

    • by Anonymous Coward

      Remember who declared "I will spend my last dying breath if I need to, and I will spend every penny of Apple's $40 billion in the bank, to right this wrong... I'm going to destroy Android, because it's a stolen product. I'm willing to go thermonuclear war on this."

      I've gotta believe that Tim Cook is enough of a professional businessman to bury this particular hatchet. It's damaging to both the corporations in question and society as a whole if the Fortune 500 is used as a battleground for personal pissing

    • Re: (Score:3, Interesting)

      by Anonymous Coward

      Apple doesn't want to pay any fees at all, let alone a fairly standard 2.5%. They see FRAND and think 'free'.

      That's a goddamned lie.

      Apple participates in many patent pools themselves, and they have no issue with paying the same license fees as anyone else. Motorola didn't want to license the radio patents to Apple like they do to everyone else, because they want to use them to get Apple to give up all of the iPhone UI patents.

      • by chrb (1083577) on Saturday June 23, 2012 @04:13AM (#40419649)

        Apple participates in many patent pools themselves, and they have no issue with paying the same license fees as anyone else.

        Actually that isn't true. In the Nokia vs Apple case, Apple refused to accept the standard pricing and Nokia had to request that the court order them to pay: "all Nokia's asked the court to do is set a price, it's clearly willing to simply accept cash and move on" [engadget.com]

        • Re: (Score:3, Informative)

          by whisper_jeff (680366)

          Did you even read the article to which you, yourself, linked? It says nothing, at all, about Apple refusing to pay. What it does say is that Apple was going to pay cash, not cross-license patents, and it was unclear what the fair and reasonable cash rate should be (Nokia obviously thought it should be higher than what Apple thought it should be), so they went to court to figure it out. Once figured out, Apple cut the check.

          • by Carewolf (581105) on Saturday June 23, 2012 @09:39AM (#40420805) Homepage

            No. Apple's case was that the chip-manufacturer had already paid the license and that Nokia was double dipping. So there was a difference in how much Apple would pay and what Nokia demanded. Nokia demanded something, and Apple offered to pay nothing.

            The end settlement is secret, but seeing as Nokia has not been counter-sued by Apple it probably contains a cross-license agreement on top of $x per iPhone.

            • I believe you are confusing the Samsung v Apple case with the Nokia case. Samsung is attempting to double-dip and get paid by Quallcomm for the chips and from Apple for using those chips.

          • by chrb (1083577)

            Apple refused to accept the standard pricing

            Did you even read the article to which you, yourself, linked? It says nothing, at all, about Apple refusing to pay.

            I didn't say that Apple refused to pay *anything at all* - I said that they refused to pay the standard license fees of Nokia:

            And finally, Apple can just pay. We spoke to several experts in the field during the course of our research into this piece, and almost all of them were surprised that Apple hadn't already coughed up the green. Again, we don't know the royalty rates Nokia's demanding, but it's a little strange that Apple isn't using its enormous cash reserves to just make this disappear. The main issue we can see is that whatever rate gets set in this case will be the basis of all future license negotiations, and Apple's got to be careful with that -- unlike almost every other company in the space, it's become a major player in the phone market virtually overnight, and setting this precedent properly is an important step. That said, Nokia's got to feel pretty good about the rates they've offered Apple here -- filing a lawsuit means Nokia's license agreements with other companies will eventually be examined, so it'll be obvious right away if Espoo's not offering similar terms to Cupertino. Let's just say this: it's not going to happen anytime soon, but we wouldn't be surprised if Steve ends up writing a check somewhere down the line.

            So we don't know exactly what the requested license rate was, but we can infer from the fact that Nokia were the ones filing the case and requesting a cash settlement that they were confident their fee offer to Apple was comparable to those of other licensees.

      • by X.25 (255792)

        That's a goddamned lie.

        Apple participates in many patent pools themselves, and they have no issue with paying the same license fees as anyone else. Motorola didn't want to license the radio patents to Apple like they do to everyone else, because they want to use them to get Apple to give up all of the iPhone UI patents.

        You should be modded VERY FUNNY.

    • Re: (Score:2, Informative)

      by whisper_jeff (680366)

      I'm not going to quote portions of your post and refute them. What I'm simply going to say is that YOU ARE WRONG. Go read Judge Posner's opinion and judgement and learn something. You are wrong. Some of your fundamental beliefs about (F)RAND patents are outright, incredibly, over-the-top wrong.

      Seriously - read Judge Posner's opinion and you will learn something.

      Why garbage like your post continues to get modded up when it is clearly, incredibly wrong is beyond me.

      • by arkhan_jg (618674) on Saturday June 23, 2012 @06:28AM (#40420059)

        I'm not going to quote portions of your post and refute them. What I'm simply going to say is that YOU ARE WRONG. Go read Judge Posner's opinion and judgement and learn something. You are wrong. Some of your fundamental beliefs about (F)RAND patents are outright, incredibly, over-the-top wrong.

        I did read the judgment. Feel free to argue why I'm wrong instead of just stating it like you're the font of all knowledge, and being a bit of a tit about it.

        Posner dismisses Motorola's request for an injunction; as being a FRAND patent essential to the UTMS standard that would defacto grant too much power to enforce whatever fee they liked. However he doesn't dismiss that Apple are still required to pay for FRAND licences, and could be required by a court to do so. In this case though, Motorola said that they charge 2.25% (typoed 2.5% in GP post) as a percentage of final device price as standard, regardless of the number of FRAND patents, as different cases could involve 75 or 100 FRAND patents. Given that Posner required both sides to reduce their claim to the smallest number of key patents, Motorola then failed to prove the specific value of that one patent they kept in the trial.

        From the judgment:

        A FRAND royalty would provide all the relief to which Motorola would be entitled if it proved infringement of the ‘898 patent, and thus it is not entitled to an injunction. In fact neither party is entitled to an injunction. Neither has shown that damages would not be an adequate remedy. True, neither has presented sufficient evidence of damages to with-stand summary judgment—but that is not because damages are impossible to calculate with reasonable certainty and are there-fore an inadequate remedy; it’s because the parties have failed to present enough evidence to create a triable issue. They had an adequate legal remedy but failed to make a prima facie case of how much money, by way of such remedy, they are entitled to. That was a simple failure of proof.

        He dismissed Apple's injunction because it would cause more harm to Motorola than Apple would gain, and because it was more harm than the patents were worth. He thought that Apple's claims of costs workarounds for their patents were unproven.

        So since neither side was entitled to an injunction, and neither side had proven what those specific patents left were worth in either losses to the plaintiff, or benefit to the defendant, he dismissed the lot.

        He certainly didn't say that, in general, failure to pay FRAND licence fees could not be corrected through court assessment and order of payment, he said the exact opposite - which was the main thrust of my post.

        • Re: (Score:3, Insightful)

          by whisper_jeff (680366)

          Fine - you read it. I'll apologize for being (as you say) a tit about it. But, your claim that 2.25% (correcting for the typo) is "fairly standard" is absolutely wrong and Posner makes a pretty clear point of demonstrating that Motorola's requested royalty rates were excessive.

          I strongly suspect that, had Motorola requested fair and reasonable rates for their patents, Apple would have cut them the check. 2.25% is unreasonable by any logical measure. And, to me, this is a point that I am shocked more people

          • by drinkypoo (153816)

            Fine - you read it. I'll apologize for being (as you say) a tit about it. But, your claim that 2.25% (correcting for the typo) is "fairly standard" is absolutely wrong

            [citation needed]

            The closest I have come is allegations that Microsoft asserted in court once that a reasonable price was 0.02%, not 2.25%. But I can find no citations for this statement, probably because the blogosphere is filled with dumbshits all parroting the same unfounded article, sans citations. I found the root article they're all quoting and it has no citations either. Unless you can provide one, you're just speculating. Normally people pay NOTHING to use a FRAND patent, because they're part of the

    • Re: (Score:1, Informative)

      by whisper_jeff (680366)

      You know what - I've decided to actually post a more-detailed reply because posts like yours - and the modding it receives - highlight why Slashdot is becoming less and less valuable. How your post gets modded +5 Informative is beyond me when it shows a gross ignorance that is simply astounding.

      We'll start with this:

      Apple spent years trying to avoid paying nokia's patent licence fees for FRAND patents...

      No. They didn't. Apple disputed the amount required to be paid but was always willing to cut a check. They went to court because they felt Nokia was demanding an inappropriate rate, the courts s

      • by arkhan_jg (618674) on Saturday June 23, 2012 @07:03AM (#40420139)

        You know what - I've decided to actually post a more-detailed reply because posts like yours - and the modding it receives - highlight why Slashdot is becoming less and less valuable. How your post gets modded +5 Informative is beyond me when it shows a gross ignorance that is simply astounding.

        Well I'm glad you've decided to actually participate instead of just slinging insults. Not least because it demonstrates that you yourself are wrong. I did read the judgment, by the way.

        They went to court because they felt Nokia was demanding an inappropriate rate. Which is what I said. They refused to pay nokia's standard rate between 2007 and 2011. That's 4 years. Nokia took them to court to make them pay, and then settled before judgement was reached. Both back payments, and approximately 1.5% of final device cost on every device. Apple could have paid up years earlier, but decided the same rate everyone else paid was too high.

        You say 2.5% is "fairly standard" yet simple math would highlight that is an impossibility and Judge Posner characterizes such an effort as "going for broke", making it clear that Motorola's demands for 2.25% was well beyond the norm for a FRAND patent.

        Motorola charge 2.25% (typoed 2.5% in GP post) for their entire FRAND patent portfolio as the standard rate - as it can involve 75 or 100 patents. What they failed to do is show the value of this one specific patent that the judge required them to reduce the case to.

        From Motorola's evidence:

        "One patent is 1 percent of 100 patents and 1 per-cent of $700 million is $7 million. But according to Donohoe’s declaration, the license fee for that single patent, if licensed on its own rather than as part of a package deal that comprised the entire portfolio, would be “up to” 40 to 50 percent of the royalty for the entire portfolio—that is, up to $350 million."

        Because motorola don't licence the patents individually, but as part of a large pool; and some of the patents are worth more than others. But in this case, they didn't break down the precise value of the one patent left out in the case as ordered by the judge. (And neither did Apple present usable evidence as to the actual value of their patents)

        "How to pick the right non-linear royalty? Donohoe’s declaration does not answer that essential question, and there is no suggestion that any other witness can answer it."

        And also from the judgment:

        "A FRAND royalty would provide all the relief to which Motorola would be entitled if it proved infringement of the ‘898 patent, and thus it is not entitled to an injunction. In fact neither party is entitled to an injunction. Neither has shown that damages would not be an adequate remedy. True, neither has presented sufficient evidence of damages to with-stand summary judgment—but that is not because damages are impossible to calculate with reasonable certainty and are there-fore an inadequate remedy; it’s because the parties have failed to present enough evidence to create a triable issue. They had an adequate legal remedy but failed to make a prima facie case of how much money, by way of such remedy, they are entitled to. That was a simple failure of proof."

        FRAND patents are still worth money. How much money one specific FRAND patent was worth as opposed to the whole pool was not proven in the case, and thus, dismissed. Apple's patents were not properly quantified in value either, so also were dismissed.

        I stand entirely by my original post. There's no reason that you can't sue over FRAND patents if a company refuses to pay the same licence fees you charge everyone else - and it's up to the court to decide if that value is fair or not. It doesn't doom the entire industry if a company does so, but it does waste a vast amount of time, money and harm customers when one or two software companies want into the phone business, but don't want to pay the companies that literally invented the hardware chips that made it possible.

      • by chrb (1083577)

        Apple disputed the amount required to be paid but was always willing to cut a check.

        If you dispute the amount to be paid, then you aren't willing to pay that amount. It is disingenuous and contradictory to suggest that Apple were willing to pay but only at a lower rate. I'm willing to pay $1 for a Ferrari - does this mean that Ferrari have to sell me one at that price? No.

        If there are 100 patents in a standards essential patent portfolio ... and each one garners a 2.5% licensing fee, how much would the entire portfolio cost?

        The license fee is for the whole portfolio, not per-patent. That's $18.75 per device for every iPhone. Compared to Microsoft's patent fee of $15 for every Samsung Android phone [theregister.co.uk] it looks like a reasonable deal - Samsung An

        • by DeadCatX2 (950953)

          GP was even more disingenuous than you think.

          Moto was asking for 40%-50% of the portfolio royalty rate for licensing just one patent from the portfolio. So instead of $18.75, it would be more like $9.37.

    • by drinkypoo (153816)

      FRAND doesn't mean you can't sue. It just means you have to offer the same licencing price to everyone first - if they pay that, they're safe. The licencing fee can't be too high - which isn't defined - but up to 5% is standard in the industry. But if someone refuses to licence, and then sues you first? That's hardly a dangerous precedent to sue right back, and motorola is far from the first to do so.

      This is exactly what I wanted to say when I read the summary. The whole idea of a FRAND pool is that you can sue people who don't join it!

      • by jo_ham (604554)

        FRAND doesn't mean you can't sue. It just means you have to offer the same licencing price to everyone first - if they pay that, they're safe. The licencing fee can't be too high - which isn't defined - but up to 5% is standard in the industry. But if someone refuses to licence, and then sues you first? That's hardly a dangerous precedent to sue right back, and motorola is far from the first to do so.

        This is exactly what I wanted to say when I read the summary. The whole idea of a FRAND pool is that you can sue people who don't join it!

        No, it really isn't. The whole idea is to enable a global standard (like, say 3G) to exist that requires patented technology to work effectively while simultaneously preventing market abuse by those who control those patents. They pool them and agree to abide by the specific FRAND terms involved in exchange for their particular patent being included (and thus assuring a return on investment through royalty payments).

        The idea is set up precisely so that someone with no patents in the pool (for example, Apple

    • by jo_ham (604554)

      +5 informative for the parent comment?

      *shakes head sadly in despair and looks for the "I don't want to live on this planet any more" meme*

      I take it you get all of your news from slashdot comments exclusively?

    • Apple *tried* to pay FRAND fees. Motorola would not sell to Apple at the agreed FRAND levels, instead Motorola jacked up the fees (10x or more I believe).

      That was totally against the whole idea of FRAND, that someones patent would be used in a standard because in turn it was understood everyone would pay the same low fee for access. If Motorola announced up-front that they would be jacking around prices on a whine, they would not have been included in the standard.

      What you are all missing is how badly thi

  • by Areyoukiddingme (1289470) on Saturday June 23, 2012 @03:35AM (#40419555)
    Isn't this bad news for all of those companies who think they've built a huge defensive portfolio of patents to use in countersuits? Even fairly legitimate patents at that. The disinterested observer doesn't have to work very hard to conclude that Motorola's patents are fundamental to cellular phones and are therefore very valuable, while Apple's software patents are worthless duplicates of other people's ideas that shouldn't even be eligible for patent protection in the first place. Despite this enormous disparity, Motorola's countersuit, intended to defend themselves against Apple's foray into legal brigandage, is also dismissed with prejudice. So the fundamental hardware patents they own are useless to them as a defensive mechanism.

    Motorola has to be very unhappy right now. Even if their fundamental hardware patents are legitimate and valuable, one of the world's largest smartphone manufacturers has successfully avoided paying royalties for them, forever.

    So giant patent portfolios are worth... what, exactly?
    • Motorola came out much better than Apple. They only had one patent in contest, and couldn't come up with a rational figure for damages that would warrant an injunction of Apple's product line.

      It was less about Motorola's hardware patent (again, they only had one left to assert in this particular case) being worthless and more about the requested remedy not fitting the scale of infringement they could reasonably prove.

    • by value_added (719364) on Saturday June 23, 2012 @06:14AM (#40420003)

      Apple's foray into legal brigandage

      Well done, sir!

      For the kids following along at home, here's the etymology according Wikipedia [wikipedia.org] :

      The brigand is supposed to derive his name from the Old French brigan, which is a form of the Italian brigante, an irregular or partisan soldier. There can be no doubt as to the origin of the word bandit, which has the same meaning. In Italy, which is not unjustly considered the home of the most accomplished European brigands, a bandito was a man declared outlaw by proclamation, or bando, [3][4] called in Scotland "a decree of horning" because it was delivered by a blast of a horn at the town cross.

      The brigand, therefore, is the outlaw who conducts warfare after the manner of an irregular or partisan soldier by skirmishes and surprises, who makes the war support itself by plunder, by extorting blackmail, by capturing prisoners and holding them to ransom, who enforces his demands by violence, and kills the prisoners who cannot pay.

  • by mikmach (305150) on Saturday June 23, 2012 @03:53AM (#40419605)
    I feel that most people don't really understand idea behind FRAND patents. It had two objectives:

    1) Prevent war between 'gorillas'. All of them were putting major resources into R&D in hardware and FRAND patents allow them to share knowledge without heavy fighting of negotiations which would only filled lawyers pockets

    2) Lower barriers for small players. With FRAND they can license necessary technology without breaking budget and allow to concentrate on product.

    Now we have third situation: gorilla enters the fray and want to use FRAND system without paying entry fee (resources put into R&D). It is Apple which abuses FRAND system, not Motorola, Nokia, etc. If it wants to not be treated with contempt it should put their 'design patents' into FRAND pool.

    • Re: (Score:2, Insightful)

      by whisper_jeff (680366)

      It is Apple which abuses FRAND system, not Motorola, Nokia, etc.

      Seriously, I don't care what you think about Apple - hate them all you want - but they are not abusing FRAND patents. They are refusing to pay excessive licensing fees on FRAND patents, which is entirely reasonable given that excessive licensing fees do not adhere to the requirements of FRAND patents. Motorola (and Samsung) are abusing FRAND patents by demanding excessive rates from one specific company, which is directly in opposition of the intent of FRAND patent requirements.

      Seriously, please don't take

      • Re: (Score:2, Informative)

        by Anonymous Coward

        One feels that your position of "I'm not going to waste time explaining this to you" is somewhat nullified by the fact that you keep on posting it over and over again. You could probably have explained it by now and spent less time on this - which makes me think that you don't want to for some reason. Oh wait, this is why - you're being disingenuous, because it doesn't state any such thing in Posner's judgement. If you can point out exactly where this appears, feel free.

        In essence, Posner is saying nothing

      • by DeadCatX2 (950953)

        Can you point me to the page number in the written opinion where the Judge says that Motorola's requested licensing rate was excessive?

        For that matter, what licensing rate was Motorola asking for?

        What's the min, max, mean, median, and standard deviation of licensing rates for a FRAND patent to a company which is not cross-licensing any of its own patents?

        • Motorola wasn't entirely clear about the rate they were requesting though the number 2.25% was thrown about. Start reading at the bottom of page 15 and the next few pages will make it clear that Posner felt that Motorola's requested rates were a) wishy-washy and b) excessive.

          • by Macthorpe (960048) on Saturday June 23, 2012 @06:16AM (#40420013) Journal

            Posner only said that they weren't being clear in what damages they were, not that they were excessive. In fact, he specifically points out that Apple are running the risk of being ordered to pay that amount or more by the court.

            • ...if Apple had wanted to license any of the patents in Motorolaâ(TM)s standards-essential portfolio, the license fee would have exceeded the product of the percentage of the portfolio represented by the patent and the value of the entire portfolio.

              • by DeadCatX2 (950953) on Saturday June 23, 2012 @06:33AM (#40420065) Journal

                Yeah, and if I were to buy Half-Life 2, Half-Life 2: Episode One, Portal, Half-Life 2: Episode Two, and Team Fortress 2 on Steam, it would also be more expensive than buying the Orange Box.

                Price of Individual Games: $35.96
                Price of Bundle: $19.99

                Imagine that. The sum cost of the games exceeds the cost of the bundle. It's almost as if there's a discount on buying the whole package, and buying just an individual game would therefore be more expensive.

                In fact, JUST HL2 is $9.99. This one game represents about 50% of the cost of the bundle of 5 games, which "exceeds the product of the percentage of the" bundle "and the value of the entire" bundle.

                Hmmm....what did I just find in the Judge's ruling? From page 16 of the ruling...

                But according to Donohoe’s declaration, the license fee for that single patent, if licensed on its own rather than as part of a package deal that comprised the entire portfolio, would be “up to” 40 to 50 percent of the royalty for the entire portfolio—that is, up to $350 million.

              • by Macthorpe (960048)

                Yes. He's saying that providing an estimate of the license fee for one patent in and of itself does not prove the amount of damages Motorola requires, essentially because of the ambiguity between the price of a single patent and the price of the collective patents aren't exactly the same. FRAND makes no rule nor mention of how much individual patents should cost when licensed outside of the pool, which is essential as the other patents were dismissed from the case.

                He made no value judgement as to whether he

            • by DeadCatX2 (950953)

              This seems to be my reading of the ruling, as well. Motorola was unable to show the Judge why *any* rate was reasonable. So now the Judge has gone and said that Motorola is not entitled to any rate at all.

              In a way this is actually quite troublesome. Motorola is entitled to SOMETHING for the R&D and time and effort that went into developing those patents. That's part of what FRAND means - "free" is not "fair". Now that the case has been dismissed with prejudice, it appears that Apple will have free

          • by DeadCatX2 (950953)

            Motorola wasn't entirely clear about the rate they were requesting though the number 2.25% was thrown about.

            From the Judge's opinion, page 17.

            Though it’s the only patent in the portfolio that remains in this suit, Motorola claims to be entitled to damages equal to (or “up to,” or “at least”—it seems not to have made up its mind) 40 to 50 percent of 2.25 percent, which would be 0.9 to 1.125 percent of sales of Apple devices that infringe the ‘898.

    • by jo_ham (604554)

      I feel that most people don't really understand idea behind FRAND patents. It had two objectives:

      1) Prevent war between 'gorillas'. All of them were putting major resources into R&D in hardware and FRAND patents allow them to share knowledge without heavy fighting of negotiations which would only filled lawyers pockets

      2) Lower barriers for small players. With FRAND they can license necessary technology without breaking budget and allow to concentrate on product.

      Now we have third situation: gorilla enters the fray and want to use FRAND system without paying entry fee (resources put into R&D). It is Apple which abuses FRAND system, not Motorola, Nokia, etc. If it wants to not be treated with contempt it should put their 'design patents' into FRAND pool.

      All correct, except the part about Apple not wanting to pay. Apple is covered under point 2, except they are not a "small player" just one that has no patents in the pool. They have always maintained that they will pay the FRAND rates for the pools in question (and have done so), just not by cross licensing any patents of their own. They are not obligated to cross licence, merely to pay the FRAND rate. It's unusual to pay in cash, since most companies don't have large cash reserves, and it's often better to

  • Let's say I have a product that sells at retail for $600. I have an idea to improve the product by adding a $5 chip and a bit of clever software. The chip is covered by a patent available under an FRAND license. How much will the price rise if I do this?

    If I raise the price to $630 (increase of $30 for end user), the retail chain probably takes something like 30 percent, that's $9. The "reasonable" 2.25 percent is $14.17, the chip is $5, total $28.17, leaving $1.83 for me. Well, that's great. Do you thin

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