Motorola wants 2.25% of Apple's sales in return for license to wireless

[still1]

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 D?sseldorf.

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):

http://fosspatents.b...s-sales-in.html

http://www.engadget....-sales-germany/

[alexalex]

2.25% or $15-$19 per device. 93M iPhones sold in 2011 = $1,767,000,000

[still1]

2.25% or $15-$19 per device. 93M iPhones sold in 2011 = $1,767,000,000

yup, that's right.... but remember this patent is about 3G so Ipad 3g counts too.

so it comes close to 2.1 bn

[cybertimber2008]

Yea what's the $/per android device that Microsoft is collecting? Isn't it $15-20?

[still1]

Yea what's the $/per android device that Microsoft is collecting? Isn't it $15-20?

Nope. that number is not yet revealed. $15-20 is the licensing fee for using WP7

[techbeck]

Nope. that number is not yet revealed. $15-20 is the licensing fee for using WP7

Its estimated they get $3-$6 per device.

[cybertimber2008]

Nope. that number is not yet revealed. $15-20 is the licensing fee for using WP7

Ok, now that I am home from work I was able to look it up. Found from: http://www.winrumors...s-and-strategy/

It is Barnes & Noble?s understanding that these licensing fees that Microsoft demands for the use of the Android are the same, or higher, than the licensing fees that Microsoft charges for its own Windows Phone 7

According to Forbes: http://www.forbes.co...ice-fees-to-27/

Microsoft has already signed multiple patent licensing deals with Android manufacturers like HTC, General Dynamics, Wistron and Onkyo which net it around $5?$15 for every Android device sold by them. It is also pursuing an agreement with Samsung where it wants $15 for every Android device sold by Samsung.

[still1]

Ok, now that I am home from work I was able to look it up. Found from: http://www.winrumors...s-and-strategy/

where does it mention $10-15 in the article? I couldn't find it. I could only see people speculating in the comment section.

[alexalex]

Its estimated they get $3-$6 per device.

No. HTC is paying $15 per Android device.

where does it mention $10-15 in the article? I couldn't find it. I could only see people speculating in the comment section.

It is mentioned in other articles.

[FloatingFatMan]

If 2.25% is what they get in licensing fees from other OEM's, then it's entirely a fair amount. If it's far more, then it's surely a case of blatant gouging. I'm no friend of Apple, but you can't just decide to charge them far more than everyone else just because they're arrogant a-holes who get off on suing the universe. That just makes you as bad as they are.

[techbeck]

No. HTC is paying $15 per Android device.

It is mentioned in other articles.

Then please provide sources to backup what you say instead of saying "its mentioned in other articles". From what I read, they are getting 3-6 bucks per device. And that includes HTC.

http://articles.busi...-android-device

http://www.appsplit....scal-year-2012/

http://9to5google.co...-and-chrome-os/

http://www.bgr.com/2...dman-estimates/

Most of what I read says HTC is paying MS $5 per device.

https://www.google.c...lient=firefox-a

Samsung was estimated, key word ESTIMATED, to be demanded to pay $15 per device but it was believed Samsung was able to get the price lowered.

But regardless of what is said, its all speculation, rumor, and estimates at this time. Nothing I have seen has been anything released from MS or and of the Android manufacturers. Just companies guesses when they use "reportable" and "believed" in their statements. They have no proof to backup their guesses. Unless I have missed something and if so, I will concede. And each company has different licensing agreements with MS.

[techbeck]

Nope. that number is not yet revealed. $15-20 is the licensing fee for using WP7

I have read that to. I also have seen that it is somewhere between $23-$30 per Windows phone a well.

[FMH]

Wow, Google's purchase is doing great. That would be a lot of money, if this decision is passed.

[nekkidtruth]

Watching the way these patent wars unfold, it's a wonder any of them ever get resolved. Each side makes ridiculous demands. Judge's need to start hand-slapping these companies until they can be reasonable. That being said....

Apple totally brought this upon themselves. They should have been happy with the huge market share they hold and the amount of money they rake in off the iSheep. Instead, they decide to wave their epeen all over the place and now it's coming back to bite them in the iBehind.

[alexalex]

Then please provide sources to backup what you say instead of saying "its mentioned in other articles". From what I read, they are getting 3-6 bucks per device. And that includes HTC.

http://articles.busi...-android-device

http://www.appsplit....scal-year-2012/

http://9to5google.co...-and-chrome-os/

http://www.bgr.com/2...dman-estimates/

Most of what I read says HTC is paying MS $5 per device.

https://www.google.c...lient=firefox-a

Samsung was estimated, key word ESTIMATED, to be demanded to pay $15 per device but it was believed Samsung was able to get the price lowered.

But regardless of what is said, its all speculation, rumor, and estimates at this time. Nothing I have seen has been anything released from MS or and of the Android manufacturers. Just companies guesses when they use "reportable" and "believed" in their statements. They have no proof to backup their guesses. Unless I have missed something and if so, I will concede. And each company has different licensing agreements with MS.

Samsung, HTC, General Dynamics Itronix, Casio and several other companies are paying Microsoft some amount per Android unit. The terms of these agreements are always confidential, but reports have given a range between $5 and $15 ? and possibly more.

In May, All Things Digital reported a Citi estimate that HTC pays Microsoft $5 per unit under their April 2010 licensing deal. Citi analyst Walter Pritchard also said Microsoft was seeking $7.50 to $12.50 from other Android vendors,according to Horace Dediu at Asymco.

Barnes & Noble, in its courtroom fight against Microsoft over the Nook e-reader?s use of Android, has said Microsoft was demanding more money to license Android than it was to license its own Windows Phone 7 operating system. Estimates have put Windows Phone licenses around $15.

In July, Reuters picked up a South Korean news report that Microsoft demanded $15 per unit from Samsung, and that Samsung was trying to negotiate that down to $10. On Wednesday, Microsoft and Samsung announced an Android licensing deal. The terms were not disclosed.

Also on Wednesday, Morgan Stanley?s Adam Holt wrote that Microsoft will likely collect $3 to $10 per Samsung Android phone, according to Barron?s. Assuming the $10 price Samsung reportedly wanted, Samsung sales alone would net Microsoft about $960 million in the next fiscal year, Holt wrote....

http://blog.seattlepi.com/microsoft/2011/09/29/is-microsoft-making-1-billion-from-mobile/

http://blog.seattlepi.com/microsoft/2011/09/29/is-microsoft-making-1-billion-from-mobile/

[techbeck]

Samsung, HTC, General Dynamics Itronix, Casio and several other companies are paying Microsoft some amount per Android unit. The terms of these agreements are always confidential, but reports have given a range between $5 and $15 ? and possibly more.

In May, All Things Digital reported a Citi estimate that HTC pays Microsoft $5 per unit under their April 2010 licensing deal. Citi analyst Walter Pritchard also said Microsoft was seeking $7.50 to $12.50 from other Android vendors,according to Horace Dediu at Asymco.

Barnes & Noble, in its courtroom fight against Microsoft over the Nook e-reader?s use of Android, has said Microsoft was demanding more money to license Android than it was to license its own Windows Phone 7 operating system. Estimates have put Windows Phone licenses around $15.

In July, Reuters picked up a South Korean news report that Microsoft demanded $15 per unit from Samsung, and that Samsung was trying to negotiate that down to $10. On Wednesday, Microsoft and Samsung announced an Android licensing deal. The terms were not disclosed.

Also on Wednesday, Morgan Stanley?s Adam Holt wrote that Microsoft will likely collect $3 to $10 per Samsung Android phone, according to Barron?s. Assuming the $10 price Samsung reportedly wanted, Samsung sales alone would net Microsoft about $960 million in the next fiscal year, Holt wrote....

http://blog.seattlep...on-from-mobile/

http://blog.seattlep...on-from-mobile/

All those say reports, reported, assumed, seeking...like I said in my post, there is no concrete evidence that any of this is fact. Its purely speculation right now and guesses. Thats it, nothing more. Unless its a proven source from MS or any of the manufacturers, nothing is fact. More often than not, these guesses are claiming its 3-6 bucks per device sometimes up to 10. But again, just estimates.

And from the links in your post, says HTC is getting $5 per device. So I fail to see where you claim it was $15. The only time I saw $15 was the licensing fees for Windows phone.

[evo_spook]

Watching the way these patent wars unfold, it's a wonder any of them ever get resolved. Each side makes ridiculous demands. Judge's need to start hand-slapping these companies until they can be reasonable. That being said....

Apple totally brought this upon themselves. They should have been happy with the huge market share they hold and the amount of money they rake in off the iSheep. Instead, they decide to wave their epeen all over the place and now it's coming back to bite them in the iBehind.

You do realise Motorolla sued Apple first which kinda invalidates your moranic post.

[still1]

It is mentioned in other articles.

mentioned in other article?? wow that was a good reply /sarcasm

Samsung, HTC, General Dynamics Itronix, Casio and several other companies are paying Microsoft some amount per Android unit. The terms of these agreements are always confidential, but reports have given a range between $5 and $15 ? and possibly more.

In May, All Things Digital reported a Citi estimate that HTC pays Microsoft $5 per unit under their April 2010 licensing deal. Citi analyst Walter Pritchard also said Microsoft was seeking $7.50 to $12.50 from other Android vendors,according to Horace Dediu at Asymco.

Barnes & Noble, in its courtroom fight against Microsoft over the Nook e-reader?s use of Android, has said Microsoft was demanding more money to license Android than it was to license its own Windows Phone 7 operating system. Estimates have put Windows Phone licenses around $15.

In July, Reuters picked up a South Korean news report that Microsoft demanded $15 per unit from Samsung, and that Samsung was trying to negotiate that down to $10. On Wednesday, Microsoft and Samsung announced an Android licensing deal. The terms were not disclosed.

Also on Wednesday, Morgan Stanley?s Adam Holt wrote that Microsoft will likely collect $3 to $10 per Samsung Android phone, according to Barron?s. Assuming the $10 price Samsung reportedly wanted, Samsung sales alone would net Microsoft about $960 million in the next fiscal year, Holt wrote....

http://blog.seattlep...on-from-mobile/

http://blog.seattlep...on-from-mobile/

if you look at my post chain you replied, I said the official numbers is not revealed and it was mentioned that's not the case(with some article links) but now you point to an article which is again an estimate and not the actual number??? yeah!!! thats what i meant official number are not revealed yet.

[nekkidtruth]

You do realise Motorolla sued Apple first which kinda invalidates your moranic post.

I'm pretty sure you mean "moronic". Now that we've established your comprehension skills are probably just as "moranic" as your writing skills, I'm well aware of who sued who first. However, Apple's behavior as of late has been atrocious with regards to patents. Karma is a bitch.