Google eyeing 2.25% of iPhone per-unit royalties

Google eyeing 2.25% of iPhone per-unit royaltiesEarlier this week, in a letter to the European Telecommunications Standards Institute, Google asserted its intention to play fair with Motorola’s many patents when the billions-of-dollars deal is finally sealed.

However, somewhat contrary to that promise, Google says it’ll pursue Motorola’s existing claim for 2.25% of per-unit iPhone royalties, a figure most folk reckon is a tad excessive. Indeed, Samsung is being investigated for patent abuse after demanding 2.4%.

In a letter to the IEEE, Google writes: “Following Google’s acquisition of MMI [Motorola Mobility Holdings, Inc.], Google will honor MMI’s existing commitments to license the acquired MMI Essential Patent Claims on RAND [reasonable terms and conditions demonstrable free of any unfair discrimination] terms, as required by IEEE rules and consistent with MMI’s longstanding practice.

“This letter is irrevocable. Google understand that, pursuant to IEEE rules, MMI is prepared to grant licenses for Essential Patent Claims with a maximum per-unit royalty of 2.25-percent of the net selling price for the relevant end product on a go-forward basis, subject to offsets for the value of any cross-licenses or other consideration received from the licensee.”

I realise we need to have boundaries and patents exist for a reason, but this is becoming a bit of a joke. I wish some omnipotent global judge would tell manufacturers to shut the hell up and invest their legal fees (I dread to think how much money is involved) in R&D instead.

Anyway, for an unbelievably thorough dissection of Google’s letter, head over to – where else? – FOSS Patents.

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jmarcelino  Feb. 10, 2012 at 19:23

Not only this... Motorola is involved in more dirt:

"C. Negotiations for Licensing between Apple and Motorola

Apple’s original iPhone went on sale in June 2007. Apple’s original iPhone contained an Infineon baseband chipset, which incorporated technology covered by patents that Motorola has declared as essential. Apple purchased the Infineon baseband chipset through a manufacturing agreement with Chi Mei Corporation, which manufactured the Infineon baseband chipset under a licensing agreement with Motorola. On August 4, 2007, Motorola gave Chi Mei a 60-day suspension notice on its licensing agreement.

D. Motorola’s Termination of the Qualcomm License

On December 16, 2009, Apple and Qualcomm entered into a contract whereby Apple would purchase chipsets from Qualcomm that were compliant with the CDMA2000 standard. The chipsets incorporated technology that Qualcomm licensed from Motorola. On January 11, 2011, on the day Apple announced the Verizon iPhone 4, Motorola notified Qualcomm of its intent to terminate any and all license covenant rights with respect to Qualcomm’s business with Apple, effective February 10, 2011."

Then they sued Apple over them. The 2007 one in particular is even before there were Android phones...

Full court proceedings cached here:

These aren't design patents, they are the serious standard-related patents which Motorola declared to be FRAND. Motorola grants them to chip manufacturers, but then when they find Apple is using the chips they revoke them. I think they're setting themselves up for a long anti-trust investigation if they continue with this sort of behaviour.

Also the 2.25% royalty on sales is ridiculous. Imagine if BMW puts a 3G chip in their cars, Motorola gets 2.25% of the net selling price of the car!

Treab  Feb. 10, 2012 at 19:39

But jm. Motorola wont have done anything wrong. it will turn out that motorola licensed a manufacturing license to these companies which will mean apple was supposed to pay to be able to use the technology...


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