Apple Willing to Pay $1 Per iPhone for Motorola Patent

Less than a week before the wireless patent suit between Apple and Motorola (owned by Google) is to go to trial, Apple has made an offer to the court—We’ll pay a $1 per unit, but no more. If the court rules for more, we’ll exhaust  all appeals to fight it. Harsh words, but turns out Apple might have the upper hand

After reading through (most) of the post (it gets pretty detailed about patent law), it’s clear that Apple would like this problem to go away (who wouldn’t). Here is the introduction from the FOSS Patents post which sets the tone for the whole article:

Five days ahead of a FRAND contract trial in the Western District of Wisconsin, Apple has formally declared to the court its willingness to pay Motorola Mobility for a license to its standard-essential wireless patents (“wireless” meaning cellular and WiFi standards in this context), but it will only write an immediate check to the wholly-owned Google subsidiary if the per-unit royalty does not exceed $1. If the court sets a FRAND rate at or below $1, Apple will take a license and start to pay right away. Otherwise Apple will appeal the decision and exhaust all of its legal options before Google gets anything.
Via: FOSS Patents: Apple: Motorola’s essential wireless patents are at best worth $1 per iPhone

Okay, I think that sounds fair…we think it’s only worth this, if you don’t agree well, we’ve got billions of dollars in the bank… Continuing through the post it becomes clear that while Microsoft is also battling Moto in the courts, Apple wants to make sure whatever happens in that case doesn’t affect them. Also, Apple seems to have the upper hand since to request a larger license fee, Moto has to prove the value, but turns out the only expert can’t testify:

Apple made this conditional commitment from a position of strength. Its filing notes that Judge Barbara Crabb has laid out her plan, which may very well culminate in a court order requiring Google’s Motorola to make Apple a licensing proposal on court-determined FRAND terms. Apple also recalls that Motorola is going to face a major problem at the upcoming trial because its only expert, Dr. Leonard, “cannot testify about a particular rate at trial” because the court held that he “did not offer any opinion about what particular rate or range or rates would constitute a FRAND royalty”. Indeed, the court’s pretrial decisions largely favor Apple, as I said yesterday.

At next week’s trial, Apple intends to support its no-more-than-$1 position not only with expert testimony but also with “copious real-world evidence–including Motorola’s contemporaneous licenses–that establishes a ceiling for the FRAND rate Motorola could charge Apple for Motorola’s worldwide portfolio”.
Via: FOSS Patents: Apple: Motorola’s essential wireless patents are at best worth $1 per iPhone

If memory serves, part of the juicy bits of Google buying up all the patents (and Motorola) was the potential cash cow the patents would be, did they guess wrong? Is a dollar per unit fair (that’s several million bucks a quarter, right)? This all hits the courts next week, so we’ll have to see won’t me.

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Gavel from Flickr by Brian Turner.

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Categories: Apple News, Apple Patents

  • Hmmm?

    Wait, did they ever pay the licensing fees and wouldn’t the patents cover just about most iOS devices? Also, is Apple still claiming unfair practices by Motorola? Not sure if Apple has the upper hand hear as there can’t be just one expert who knows the value of the patents.

    • Tris Hussey

      Those are good questions. That post didn’t delve into that…though making sure whatever MSFT does in court doesn’t influence things was discussed.

  • Marin

    I love how biased this post is. Apple doesn’t have the upper hand in anything. If it did it wouldn’t be making any sort of offerings before the trial. Apple knows its in trouble, with it’s stock already dropping , the last thing apple wants is to lose in court. Why would apple claim it doesn’t want the microsoft case to affect its trial if it has the upper hand. Iphonehacks, let’s try to be a little more honest next time.