Apple puts a price tag on Motorola’s wireless patents: $1 per iPhone

By , Oct 31, 2012

In a response to Motorola’s motion from yesterday seeking clarification on essential wireless patents (which include both cellular and WiFi standards), Apple has formally acknowledged its willingness to accept a license at a court-determined rate of up to $1 per iPhone through a license agreement on fair, reasonable and non-discriminatory (FRAND) terms.

The figure entails worldwide sales of covered products, the iPhone maker said. Apple’s position on FRAND licensing is that the industry should set FRAND rates in order to prevent companies asserting wireless standards-essential patents against its rivals by jacking up prices.

Motorola, which is now a wholly-owned Google subsidiary, wrote in the filing that Microsoft’s FRAND contract case had explicitly committed to the conclusion of a license agreement on court-ordered terms. Is there finally an end in sight to this patent mess?

Paten expert Florian Müeller called the development “the biggest smartphone patent news on Halloween 2012″, writing in a post over at his FOSS Patents blog:

Apple 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.

Apple calls itself in the filing “an outspoken leader in the industry on FRAND”, noting it has “repeatedly urged that a rational and consistent framework for determining FRAND rates for wireless standards-essential portfolios must be set”.

The filing reads:

Apple’s actions in both licensing and litigation have matched its words in public. Because of that, Apple is willing to pay the FRAND rate this Court sets going forward if that rate is less than or equal to $1 per unit for its worldwide sales of covered products.

This is the rate that Apple believes is appropriate in these circumstances, a rate that flows from Apple’s articulated FRAND framework, and the only rate that can be supported by experts at this trial.

Should the court set a higher rate, Apple reserves the right to exhaust all appeals and even proceed to further infringement litigation.

The FRAND contract trial is scheduled to kick off in five days in the Western District of Wisconsin. If anything, Apple’s offer to Motorola certainly beats its previous proposal to Samsung of half a cent per unit.

What do you think, will Apple end up paying one dollar to Google each time it sells an iOS device?

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  • http://twitter.com/WillyLMFAO Wilder A.

    Yay, Apple is playing nice…..R.I.P Innovation

    • Lordthree

      Stupid post is stupid. The ammount they pay doesn’t effect the rate at which they innovate. Go away troll

    • kgelner

      RIP mobile phone market if essential patent holders can charge different rates to different mobile phone manufacturers.

    • goofygreek

      oh, apple is not playing nice, hense the reason why they think they shouldnt have to pay more than a dollar per device. It shouldnt be up to apple, it should only be up to the people that set the frand prices. Thats the whole point of that organization. And, please explain how thats killing innovation?

  • http://twitter.com/decio_crytek Décio Costa Arruda

    Don’t say RIP innovation just because the company you like is going down because it was caught red handed copying and stealing Apple’s patents, that’s just stupid, RIP innovation? Yes, I said that when touch wiz came out and when Android started adding everything ios had. They didn’t innovate at all, they just took it…

    Innovation means: when you make something existent better. And that isn’t what android did..

    • goofygreek

      you may need to re-read this article. its about apple having to pay up, not the other way around.