Motorola's FRAND Licensing Demands: 2.25% of Apple's Sales

[Phillip Swanson]

Our coverage of Motorola’s brief injunction against the sale of 3G iDevices in Germany yesterday questioned whether Motorola or Apple was being unreasonable in the licensing negotiations. Evidence is pointing to Motorola's demands wandering into the unreasonable.

Information released by FOSS patents suggest Motorola’s 3G technologies FRAND licensing offer to Apple that would end the current legal dispute involves Apple handing over a 2.25% share of Apple’s sales. It is unclear if this percentage is of all Apple revenues or a percentage of Apple’s 3G devices sales (seeing as the dispute is over 3G technology).

Florian Mueller of FOSS patents described Motorola's 2.25% request as “excessive,” especially concerning Apple’s latest quarterly earnings report. In fact if the court forces Apple to pay the 2.25% they’ll owe Motorola just over $2.1 billion out of the $93 billion in iPhone revenue since 2007. Apple successfully suspended the ban claiming that Motorola’s “deal” was anti-competitive and is currently gathering information from other handset makers concerning their FRAND agreements with Motorola.

The major player not mentioned yesterday in this whole FRAND mess is Google. If Google’s acquisition of Motorola is finalized, and Apple eventually has to pay 2.25% of something to Motorola, all of that money will go right into Google’s coffers. All outcomes point to Apple paying Motorola something, the only variables are how much and if Google will eventually benefit.

Source: FOSS Patents [via TUAW]

[Mrteacup]

seriously? thats so much money i mean apple deserves this (they got bad *** karma) but a percentage is a bit much why not like 1 billion thats a lot but w/e karma's a b!tch

[domenicp]

Sounds unreasonable, but I guess once Motorola's agreements with other manufacturers is discovered it will be clear whether or not this is fair.

Not sure how many technologies smartphone manufacturers are required to license, but at 2.25% per technology, I imagine that leaves little room for profit.

[TooSlo]

FRAND licensing is in place and presidents have already been set.

Sounds like Apple needs to pay to play. I hope Nokia wins some GSM suits they have been going after Apple about as well.

[King_O_Hill]

Did we send our president also? I didn't realize that Obama was involved in this too.

Ohhhhhh, maybe you meant precedence.

[unison999]

seriously? thats so much money i mean apple deserves this (they got bad *** karma) but a percentage is a bit much why not like 1 billion thats a lot but w/e karma's a b!tch

This is 3G technology Apple stole (using without permission) simply because Apple says they are charging too much.
Seems like Apple always give this excuse when they "borrow" someone else patent, another case being Nokia's GSM patent... Yet they have problem when others uses BS patent of square tablet with curved edge patent they hold.

Considering without 3G technology there would not be an iPhone/iPad.
2.25% is small percentage of profit Motorola wants a share of. Sure with the amount sold Apple have to pay $1 billion, but that is based on percentage payout. What if Apple only made $10,000 and Motorola can only get $225, can Motorola complain how little they are being paid?

[domenicp]

This is 3G technology Apple stole (using without permission) simply because Apple says they are charging too much.

Interesting take on the definition of stolen...

Not sure any of these manufacturers can take the moral high ground. They all try to screw one another over... its been that way long before apple ever produced any mobile device...

if apple wants to play, it better play.

[srchino]

Did we send our president also? I didn't realize that Obama was involved in this too.

Ohhhhhh, maybe you meant precedence.

set not send smart *****

[unison999]

Not sure any of these manufacturers can take the moral high ground. They all try to screw one another over... its been that way long before apple ever produced any mobile device...

True but at least there are some invention and significant R&D involved with Motorola and Nokia's patents, compare that to Apple's BS square with rounded corner got Samsung banned in Germany and Australia is just not right.

[NakedFaerie]

2% and they are whining? its only 2%.
I hope it goes further and they have to pay more. Should've shut up and paid that 2%.

[one1]

failing companies do desperate things.


.......... but still fail.

[leopodie]

TBH its not cheap to get these patents, alot of R&D doesnt even pay off. Apple themselves don't even invest in these kind of techniques, but they still think its their liberty to use 'm freely if someone else pays for them?
Its only excessive if samsung HTC % co arent paying that mutch

[TooSlo]

Did we send our president also? I didn't realize that Obama was involved in this too.

Ohhhhhh, maybe you meant precedence.

Yay ****** autocorrect...

failing companies do desperate things.


.......... but still fail.

Google is failing? You do know that they own Motorola Mobility, right?

[KraXik]

Google is failing? You do know that they own Motorola Mobility, right?

So....? Moto is still failing. If Google buys Kodak would that automatically make it successful?

Google only wants Moto for its patents anyway. Who's to say they don't strip the company and just keep the intel?

[jOnGarrett]

seriously? thats so much money i mean apple deserves this (they got bad *** karma) but a percentage is a bit much why not like 1 billion thats a lot but w/e karma's a b!tch

There are 2 reasons why I think Moto is asking for 2.25%.

1. Because they reasonably believe that's how much is owed to them based on the numbers they've crunched.

2. They know its excessive and is NOT the real number they're after--they are playing their hand, they're asking for 2 dollars knowing full well that 1 dollar is what they really expect.

[sziklassy]

So....? Moto is still failing. If Google buys Kodak would that automatically make it successful?

Google only wants Moto for its patents anyway. Who's to say they don't strip the company and just keep the intel?

Moto is failing based on what, exactly?

[KraXik]

Moto is failing based on what, exactly?

Try looking down like 4 articles.

Apple Banks 75% of Mobile Phone Profits With 9% of Units Sold

That was difficult.

[iLoveWindows&iPhone]

Did we send our president also? I didn't realize that Obama was involved in this too.

Ohhhhhh, maybe you meant precedence.

Typical arrogant Patriots fan.

[PorthosPirate]

Moto is failing based on what, exactly?

Umm.. their 2011Q4 Loss and flat sales?

Motorola Reports Slight Loss on Flat Revenue As Phone Sales Dip | News & Opinion | PCMag.com

Motorola Mobility's Poor Forecast Throws A Wrench Into Google's Plans - Seeking Alpha

[hollow704]

^ i concur.