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Apple Sues Motorola Over Licensing of Cellular Technology by Qualcomm
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Where do you get the figure that Qualcomm gets 3.4% of total cost of the phone and not 3.4% of the baseband chips not manufactured by them? Do you have a reference?
If that's really the way it's going to be, Apple should just design the next iphone to contain the puny baseband chip on a tiny fingernail size cartridge, then sell it at cost for like 15 bucks & give motorola their 2 % of that.
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Oh well here is some information. http://www.fool.com/investing/gener...patent-throne-becomes-a-little-less-comf.aspx
.. albeit, from 2009. I think the royalty rates have been declining.
Hmm... here is another link...
http://www.eweek.com/c/a/Mobile-and...or-Motorolas-225-Perunit-Royalty-Rate-325732/
.. I wonder if the problem here has to do with the fact that the 4S has a dual CDMA / GSM basband chip. Qualcomm has its own intellectual property regarding the CDMA portion, but might need Motorola licenses for the GSM capabilities of the chip? Not really sure. Seems odd though that there was some license arrangement between Motorola and Qualcomm, but then this might have been terminated around the same time that Apple became a customer.
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alephnull12 said:
Not around the same time. The very day that Apple announced it was to sell an iPhone on the Verizon network, Motorola decided to write Qualcomm to inform them they could not longer sell chips using Motorola's patents to Apple, and Apple only.
It is quite clear Motorola doesn't want any company that is using its patents to deal with Apple, and they are doing everything they can to give Apple a hard time until their dispute with Apple is settled. Makes sense. If they think they are owed money because of infringement on their patents, they won't play nice until they are paid (whether that is legal, is yet to be determined though). Of course, Apple believes Motorola isn't being fair in how much they are demanding for the use of their patents, so both sides are battling over the issue.
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To advise Qualcomm that it can sell the licensed tech to any company but Apple is clearly anti-competitive. I can't imagine that the EU will tolerate such behavior.
To advise Qualcomm that it can sell the licensed tech to any company but Apple is clearly anti-competitive. I can't imagine that the EU will tolerate such behavior.
For those of us that are NOT lawyers and don't play one on TV.
http://fosspatents.blogspot.com/2012/02/apples-us-antisuit-lawsuit-against.html
http://fosspatents.blogspot.com/2012/02/apples-us-antisuit-lawsuit-against.html
remember anything opinionated from fosspatent is not worth the stuff we flush down the toilet. The guy is a known MS shell and MS is the most afraid of Android so as such will attack it in the opinions.
Yep. Look at the last paragraph in this very recent article.
I like that idea
Note that it's not just Motorola. Qualcomm, Nokia, Ericsson, and everyone else who gets patent fees, all charge per net price of the phone.
Apple could, of course, lower their phone price, but then they wouldn't be making the huge profit margin they are now. I highly suspect that given the choice of lower profits with lower fees, or huge profits with slightly higher fees, they'll choose the latter.
Seems a good guess. The pretrial documents quoted earlier in this thread do refer specifically to the fact that the new chipset has CDMA2000 capability.
That's not correct. Qualcomm could (and obviously did) continue to sell millions of chips to Apple. Motorola just wants to be paid directly by Apple for their part.
Now, this is interesting: until a few minutes ago, I assumed that what Motorola did was to cancel Qualcomm's ability to either sublicense, or to collect Motorola license fees for them.
However, reading the pretrial claims again, I just noticed they state that Motorola severed their patent COVENANT with Qualcomm with respect to sales to Apple. Not license. Covenant.
Oh ho! That's a subtle yet very important difference. (Assuming the court documents are accurate. If not, then please ignore some of the following conclusions.) A patent covenant is not a license with a possible ability to sublicense, but a promise not to sue a patent user.
That makes it sound like Motorola had some kind of patent sharing setup with Qualcomm, not a license fee agent agreement. In other words, perhaps Motorola wasn't being paid very much, if anything at all, for each chip.
In any case, whether it was just a covenant, or a license and covenant, clearly Motorola wanted to negotiate a separate deal with Apple, which is their right under the ETSI FRAND rules.
See above. They didn't stop the chip sales, or Apple couldn't have sold millions more phones. What Motorola canceled was their agreement with Qualcomm, so that now Apple would have to pay patent fees directly to Motorola. Nice or not, if someone upholds Apple's right to protect their patents, then they must also appreciate Motorola's right to profit from theirs.
It'll boil down to how the Moto-Qualcomm agreement was worded, methinks.
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Well people can decide for themselves whether they trust his analysis or not. At least you get an insight into the lawsuit and it's better than most tech blog sites that are either pro-Apple or pro-Google. I remember reading his blog when Samsung first sued Apple using their FRAND patents and he correctly predicted the outcome.
Exaggeration alert! Yes Motorola was one of the pioneers of the cell phone (together with Bell Labs, NTT, etc) but those patents only last 17 years.
All pioneering cell phone patents have truly gone to patent heaven now, along with all others filed before 1995 (1992 in special cases)
Motorola actually has very little patents to take up with Apple, that's why they themselves say only one bullet is enough.
And look at his results of the ones Apple has fired at Android.
He has been wrong on pretty much every single one of them. His predictions are as such that it is always the bad outcome form android.
I see your point... However, I believe that Apple are going to use licences with other companies to show that Moto is demanding unreasonable fees.
Good point!
I should've said "Motorola held 50% of the patents listed as essential FRAND by ETSI in 1993".
I got lazy late last night, and was not as exact as I usually try to be.
Do you have any idea what the percentage currently is? We should do some research on it.
You're no doubt correct as far as phones go. Btw, note that essential patents include carrier equipment as well. It's not just handheld terminal ones. (Most of the LTE patents Apple bought from Nortel were also for network equipment, not for phones.)
Yet Motorola hasn't sat still for the past 20 years. Besides being part of the addition of UMTS-3G in the latter 1990s, they're a recent pioneer with LTE as well.
Edit: Forbes had an LTE analysis that included Motorola: "Four companies basically tied for third place by each claiming 9% of essential LTE patents. They are Motorola Mobility, InterDigital, Nokia and Samsung. The value of both Motorola Mobility’s and InterDigital’s patents has already been well-publicized."
Now we need to look up UMTS and any GSM updates.
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Good article.
It also includes Qualcomm in 2nd place, which - they state - holds a quite substantial 21% of the LTE patent pool.
Also worth mentioning from there that Nortel held 4% of essential LTE patents, now in the hands of the Apple, EMC, Ericsson, Microsoft, RIM and Sony consortium (although the sharing arrangement between them is undisclosed)
I love Apple's products, but I am starting to feel like not buying Apple's products for a while, just so I don't support this kind of ****.
What ****?
This case is all about Apple defending themselves from Motorola's efforts in banning the iPhone (and iCloud service in a separate case), and also demanding an unfair royalty for essential patents.
Would you prefer that Apple did nothing and just let Motorola ban their products?
Apparently you quoted most of the article but didn't actually read it?
That article doesn't state that Apple are paying Qualcomm 3.4% though, it just quotes some percentages they think Qualcomm are charging. I was under the impression Apple just paid Qualcomm per chip and that the price included licenses for all the relevant patents, with Qualcomm paying the patent holders from a built in margin in the chip price.
So who else does Qualcomm sell that chip too? Moto should also be suing all other companies that use that Qualcomm chip if they are really concerned about this.
It's a good question, and the answer adds another twist. From what I've seen, the other biggest user of the mentioned Qualcomm chip (MDM6600) is actually Motorola themselves.
They use it on many Droid lines including the new Droid Razr. Of course they're not going to sue themselves
Yep, I'm sure you're right, as apparently both Qualcomm and Motorola do the same thing: they charge a lot for their patents unless you buy related chips from them. The point was that charging by price of phone for patent use is the norm otherwise.
-- More grist for the mill:
The main patent at question is US 6,359,898 ... a core GPRS one. It was applied for in 1998 and granted in 2002. In late 2011 a Mannheim Court ordered Apple to cease and desist selling products (pre-4S) that it found infringed the EU version of that patent. Apple immediately got a stay of execution, pending the final outcome sometime this April.
Now jump back a year. As far as the 4S and that patent goes, Apple claims that their deal with Qualcomm covers them. Apparently Qualcomm had a non-sue covenant from Motorola for their customers. Here comes the twist:
In the last quarter of 2010, both Apple and Motorola were filing a bunch of lawsuits against each other over patents related to iPhones, iPods, Droids, settop boxes and DVRs.
That's the reason why in Jan 2011, when the CDMA iPhone 4S was announced, Motorola invoked the Defensive Suspension Provision of the Qualcomm contract, which is a common software contract retaliatory clause that basically says "If someone sues me for patent infringement, then they can't use my patents."
So the first question for the courts probably is, did that clause apply? Motorola says yes. Qualcomm and Apple say no.
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However when we rewind back to 2010 it was actually Motorola who sued Apple first over these patents. Apple was not suing Motorola at the time.
https://www.macrumors.com/2010/10/06/motorola-files-suit-against-apple-for-patent-infringement/
How can Motorola claim defensive action if they shot first?
It also doesn't explain the similar issue with Infineon / Chi Mei over earlier iPhones.
Several courts in Europe have recently examined the "Defensive Suspension Provision" - and ruled that it did not permit actions such as Motorola took. It very clearly is in violation of the "Non-Discriminatory" part of FRAND.
In passing, I will remark on a peculiar situation that has arisen here at MR related to this discussion: That of he who must not be named.
The blizzard of patent-infringement lawsuits that has taken place over the past couple of years is extremely significant for the future of the smartphone and computing business in general. It has garnered some attention from the popular press, but aside from the odd NPR story, nobody has taken the time to examine - and explain - the various court cases and legal reasoning behind them nearly as well as, er, a certain blogger in Germany. Certainly the individual in question is a fallible human being, as subject to biases as the rest of us.
But unless, and until, anyone can come up with a source that is as exhaustive and informative as the one I'm referring to - I think its at least worth reading his material. You may not necessarily agree with his opinions on various matters, but its pretty hard to disagree with the facts (ie. court filings, etc.) that are found on his site. He is, I will note, regularly cited by mainstream news providers such as the New York Times, Bloomberg, and the Wall Street Journal.