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Judge shuts down Motorola-Apple case before it starts

Apple's attempt to set a limit on RAND royalties backfires


Published: 7 November, 2012

READ MORE: North America | Apple | Motorola | Patents/IPR

We always wondered how a judge could side with Apple over actually limiting Motorola patent royalties, which are supposed to be RAND (reasonable and non-discriminatory). History shows that those words can mean very different things to different people and companies like Qualcomm have charged more than double the rates that Motorola has been asking of Apple, and been upheld in court.

To confirm Apple's case that Motorola was asking too much would have been to overturn the last 15 years of technology patent cases. So we weren't too surprised when a federal Judge in Madison, Wisconsin earlier this week threw out the Apple suit a day before a case was due to begin. Apple had claimed unreasonably high license fees for the use of essential wireless patents. The case was dismiss with prejudice, meaning only the Appeal court can look at this again, not another district court.

This is just one of many suits between the two to be judged on US soil, and may have some direct bearing on any appeals in multiple Apple vs Samsung cases, where Apple managed to get essential wireless patents valued at zero in court and by the ITC. Those decisions may well get overturned at appeal.

Motorola wants to have 2.25% of the price of an Apple device in royalty, which uses its patents, and if Apple had been successful here it would have led to a position where patents which are "essential" to make a phone, were worth far less than some which are incidental software approaches which add features to the phone, which make up many of Apple's counter claims. There are many inventions, including some in Wireless, where a total patent portfolio commands over 5% of a device's value and multiple patent portfolios account for 20%.

The Judge, Barbara Crabb at the district court for the Western District of Wisconsin has not yet given a reason for dismissing the suit. Motorola says that it is happy with the decision and wants to reach an agreement with Apple, but without this decision, which could still be appealed, Motorola's entire patent holdings, and the main reason that Google bought the company, might have been valueless in preventing further suits from Apple.

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