I understand the need to protect intellectual property but this is bordering on lunacy. The cost of all this litigation, damages and royalties is coming out of your and my wallets. In the end, no matter who "wins" all of these various patent cases, we as consumers are the ones losing.
In this case, Apple has the choice of giving in to the patent bully, or countersuing. This case will either fail, in which case it has no effect, or Apple wins, in which case Apple avoids paying damages and royalties. So as a consumer, you can only win. Motorola wants 2.25% of the sale price of every iPhone, so who do you think gets hurt if they succeed?
Finally, should Moto prevail, then they will be vulnerable to similar tactics, once Apple can use their FRAND patents to sue Moto.
Motorola wants a percentage of the purchase price, Apple wants a fixed rate. Apple has lots of LTE related patents. So Apple will probably say "Motorola wanted us to pay $16 per iPhone, so we ask for a fixed rate of $16 per Motorola phone".
Legalities aside (we do not really know enough details to understand the situation), consider the following. The end product that Motorola's patents enable is a mobile phone. As I understand, [F]RAND licenses typically cost about 2%. So, lets say this fee is charged on a $500 phone. That's $10 bucks per phone. Now, if Qualcomm put patented tech inside a chip that costs $50. All of a sudden Motorola's cut drops to $1. I suspect that the chips in question actually cost $5, which means that Motorola gets 10 cents per phone. Perhaps this makes sense for Apple but certainly not to Motorola and it makes mockery of the whole FRAND concept. Could Motorola charge $10 per chip? Maybe nut I am not sure that this would work for Qualcomm. So, this might be a new issue that arose because of the dramatic changes in the mobile industry. Perhaps the old ways (FRAND or the definition of "F" in it) don't make any sense anymore. I am sure they'll figure that out though
In the mean time we all can enjoy the progress that the industry is experiencing.
The iPhone is a complete iPod Touch, plus a decent camera, plus some other things, plus a phone. Motorola wants their 2.25% of the iPod Touch, the 2.25% of the camera, the 2.25% of other things, plus 2.25% of the phone part. Why should Apple, and in turn the consumer, pay 2.25% of lots and lots and lots of things that have nothing to do with Motorola's patent? And in turn, if the camera in the iPhone uses some patents, why should the owner of these camera patents get any money from the phone part? Why should Apple pay more for the iPhone then they would pay if they sold an iPod Touch, a camera, and a phone, all separately, for the same total amount?
Now if Qualcomm makes a chip for $5.00, and 90% of the chip function is implementing one Motorola patent, then yes, 2.25% would seem low. But if Qualcomm made a different chip for $10.00, and 45% of the chip function is implementing one Motorola patent, and another 45% of the chip is implementing say a Samsung patent, should Qualcomm pay twice the money to Motorola? Because they added totally different functionality? The fixed percentage just doesn't make sense.
