updated 02:02 pm EDT, Tue August 28, 2012
Google subsidiary backs off blatant FRAND abuse
Google subsidiary Motorola may be feeling some pressure to negotiate in better faith following the Apple vs. Samsung case, a court filing has revealed. Apple and Motorola are fighting a case in Germany revolving around Motorola's charges that Apple infringed on some Motorola patents, with Apple arguing that Motorola's patents are FRAND-eligible and the company wouldn't licence at a reasonable rate. The amended paperwork shows Motorola finally agreeing to a FRAND license.
In exchange for accepting Apple's "fair, reasonable and non-discriminatory" offer on licenses, the iPad maker admits to having used the technology and will pay for "past damages," i.e. the length of time it has been using the Motorola standards-essential patents -- an offer it has made repeatedly before and during the court proceedings. Though Apple will have to pay the license fee retroactively and going forward, the change is seen as a victory for Apple, which has made FRAND license offers to Motorola that the company wouldn't accept, demanding a much higher royalty rate of 2.25 percent of revenue.
The actual price of the license -- and how much Apple owes -- will be determined by a German court, but the agreement represents a breakthrough in the case and removes the likelihood of any Apple products having to be modified or even banned in Germany. Motorola was ordered by the Higher Regional Court of Karlsruhe to accept a legitimate FRAND offer from Apple or be in violation of German law. The ruling echoes a similar finding in the US, where a Wisconsin judge found Motorola to be operating in bad faith by refusing to license patents found to be FRAND-eligible.
Apple sued Motorola in Wisconsin as a response to the German court action, claiming that Apple owns "scores" of standards-essential patents but has never refused a FRAND offer or required access to others' non-standards patents in exchange for a FRAND license. It also said it had never asserted a standards-essential patent in litigation and "unlike some in the technology industry" has never used a FRAND patent as a weapon to deny market access to a rival.
The FRAND just accepted by Motorola in the German case is separate of another Apple-Moto fight where Motorola won a ban of push email on Apple's devices in Germany. In that case, Motorola was claiming infringement of a non-standards patent, with Apple seeking to have the patent declared invalid.
The agreement over the FRAND licensing, however, marks the beginning of Motorola backing down on using such patents as leverage to force higher royalty rates, a strategy that has not seen any success to date in various court cases. The German court had previously suspended any enforcement of an injunction of Apple products based on the now-ruled standards-essential patents, and said that Motorola's refusal to accept Apple's offer could be an antitrust violation.
According to patent case analyst Florian Mueller, another factor in the settlement may be the ongoing European Commission investigation of Motorola over abuse of standards-essential patents with regard to licenses for Apple and Microsoft. The full extent of the license has yet to be revealed, and may only cover wireless transmission rather than all of Motorola's claimed patents (such as the H.264 video codec), but the acceptance of Apple's offer without demanding a license to any of Apple's non-FRAND patents represents a change in policy -- and, if Motorola will now begin to adhere to its FRAND license obligations, potentially a larger victory for Apple and other companies. [via Florian Mueller]