What would IDCC be worth if they could charge 2.25% or to Apple if they bought IDCC and charged the same?
FEB 4, 2012
Motorola wants 2.25% of Apple's sales in return for license to standard-essential wireless patents
In my previous post (on Motorola's lawsuits against the German Apple Stores), I said that a statement by Apple's counsel at yesterday's Mannheim trial made me aware of a discovery request that Apple filed in the United States in order to strenghten its defenses against Motorola in Germany. Just like Apple's lawyers previously obtained the patent cross-license agreement between Qualcomm and Samsung, which helped (among other things) avoid preliminary injunctions against the iPhone 4S in France and Italy, Apple also wanted to be able to show Motorola's patent cross-license agreement with Qualcomm to German courts, given that Apple may be licensed by extension, based on the concept of patent exhaustion.
Apple brought the related motion on January 18, 2012, in the Southern District of California, where Qualcomm is headquartered. The court granted Apple's motion on January 25, but MMI brought a motion to quash two days later. Apple opposed that one on January 30; MMI defended it on February 1; and on February 2, the court denied MMI's motion. That denial of MMI's motion to quash was referenced by Apple's lead counsel in that particular litigation, Johannes Heselberger of the renowned Bardehle Pagenberg firm.
The Qualcomm-Motorola agreement was discussed at the hearing, but only behind closed doors. Even an Apple inhouse lawyer had to leave the room. That agreement may very well help Apple keep its more recent products, the iPhone 4S and iPad 2, on sale in Germany despite Motorola's legal attacks in Mannheim and Düsseldorf.
Apple's January 30, 2012 brief opposing MMI's motion to quash contains some information that a lot of people are wondering about these days when they see what's going on between Apple and Motorola over FRAND patents: the royalty rate that Motorola demanded when Apple asked for a FRAND offer.
The answer is: 2.25%. I assume this relates to Apple's sales and to all of MMI's standard-essential patents, though the context is only one patent (the one over which Motorola has already forced Apple, temporarily, to remove certain products from its German online store. Assuming in Motorola's favor that this was a license to all standard-essential wireless patents, the amount still appears excessive to me given how many companies hold patents on such standards and what royalty rate this would lead to in the aggregate.
Let me show you the relevant excerpt of the document that revealed it. The document is a letter that was sent by the Bardehle Pagenberg firm (on Mr. Heselberger's stationery and bearing his colleague Dr. Christof Karl's signature), to Dr. Marcus Grosch of Quinn Emanuel, Motorola's remarkably-successful German lead counsel, on October 17, 2011, ahead of a trial that took place four days later. Here's the part that discloses Motorola's royalty demand (click on the image to enlarge):
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