Originally Posted by TBell
Good points, but the concept of fair, reasonable, and non-discriminatory is based on treating all parties seeking to use SEPs equally. Yet, companies like Motorola and Samsung in their war with companies like Apple and Microsoft have been unwilling to provide examples of similar agreements with other parties. Problems would be eliminated if companies published their rates for SEPs.
Yep, that's why many have published their (starting) rates for LTE.
FRAND doesn't mean everyone pays the same, of course. There can be multiple rate structures, depending on what you're willing to trade, how many licenses you're buying, what your credit is like, and so forth. It just means that everyone should have access to all the same rate structures.
For example, Nokia negotiated cross-licensing with everyone. So instead of paying the max rate of more than 30% for a GSM phone, they only pay about 3% of its price.
Further, Motorola clearly has sought higher payments from Apple and Microsoft then other parties.
Source? Or did you simply mean you heard that they asked for higher rates if there was no cross-licensing?
Interestingly, back in the early days of cell phones when Motorola owned half of the SEPs, Motorola didn't ask for cash. They originally only had two FRAND licensing deals: either you (1) bought chips or other equipment from them, or (2) you cross-licensed everything with them. There was no other way to license their IP.
Moreover, Apple's agreements with Qualcomm have shown that Apple's buying of the chips from Qualcomm covered the patent payments to the various SEP holders.
I don't think Apple claims they don't have to pay Motorola. They're simply claiming that Qualcomm's agreement with Motorola means Motorola cannot sue them or use their IP to block iPhone sales.
On their side, Motorola claims their covenant not to sue Qualcomm's customers, has a clause where it's nullified for any customer that sues them, as Apple did.
The question still to be decided is if such a clause is legal for a SEP.
In my view, that is how it should work. If Apple buys a component from a third party, the third party should have covered the patent licensing.
A chipset also needs broadband software to run it, which is where some of the patents come in.
You also don't want to pay for capabilities you're not using. E.g. you use a CDMA/GSM chip, but only want to license the GSM side.
Edited by KDarling - 1/9/13 at 2:26pm
Even Qualcomm charges Apple that way. Their chip is one price. Licensing Qualcomm IP to use that chip, is another rate. As with most such patents, the rate is based on the wholesale device price. However, some analysts
claim that Apple negotiated the rate to be based on what they pay Foxconn per phone (~ $245) instead of what they charge carriers (~$600).