Late last year, Motorola Mobility requested Apple pay a potential royalty of 2.25% on its iPhone sales in recently unsealed litigation from last year. The royalty would amount to more than $1 billion in 2011 alone, though there is no indication which specific iPhone models would be covered by the license nor if it would be retroactive to the initial launch of the iPhone in 2007.

motorola mobility logo wordmark 500x64 1
The patents appear to be covered under the FRAND standard, which requires patents to be licensed for "fair, reasonable and nondiscriminatory terms". The 2.25% request that Motorola offered was in response to a demand for a FRAND pricing offer from Apple.

Florian Mueller, writing about the issue, offers some additional insight:

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.

A quote in the Wall Street Journal from the chief executive of the Epicenter IP group, which helps companies license patents, noted that "there is no debate that Motorola was the inventor of the mobile phone" and its patents could be broad and necessary for a phone maker.

This is only one more step in the long and drawn-out patent battle between the two companies, but the licensing rate for patents is typically a closely held competitive secret. The 2.25% rate would be a significant amount of money, given the tremendous sales Apple is generating from its iPhone business.

Top Rated Comments

HiRez Avatar
130 months ago
The 2.25% rate would be a significant amount of money, given the tremendous sales Apple is generating from its iPhone business.
The amount of money generated should be irrelevant. The question is, how fair is 2.25%? What % are other similar FRAND patents typically licensed at? Are there guidelines or limits placed on these?
Score: 14 Votes (Like | Disagree)
kdarling Avatar
130 months ago
A few information tidbits for the thread:


* Re: Motorola's 2.25%. Samsung had asked Apple for 2.4% for their patents.


* It's probable that one reason other companies aren't making as much profit on their phones as Apple, is that they're paying far more in license fees, some of which Apple has been avoiding as long as possible.


* Motorola first asked Apple for royalties a month after the iPhone went on sale in 2007. Reportedly Apple stalled four years to respond with a counter-offer. (Similar to what they did with Nokia.)


* Over 150 companies belong to the GSM FRAND alliance. Unknown how many get license fees.


* Fee example: in 2007, Broadcom won an ITC import injunction on certain Qualcomm chips. Verizon ended up themselves paying the $6 patent fee per CDMA phone to Broadcom for a while, just to be able to import phones into the US and not run out of stock.


* FRAND does NOT mean that everyone, big or small, new or old, must get the same terms. Quantity, length of contract, cross licensing of patents, all these and more are factors.


Score: 5 Votes (Like | Disagree)
Andronicus Avatar
130 months ago
Motorola almost went out of business a few years ago. They make junk and now they want to steal from Apple, wow! All that CPU business they lost from Apple has to really hurt when all your other products suck, specially all the consumer junk they make.

-Mike

Obviously you're an apple......enthusiast, but Motorola has been making phones a lot longer than apple and it's not surprising that they have patents that apple is using and if so then apple should pay.
Score: 5 Votes (Like | Disagree)
Kevlar Avatar
130 months ago
Motorola almost went out of business a few years ago. They make junk and now they want to steal from Apple, wow! All that CPU business they lost from Apple has to really hurt when all your other products suck, specially all the consumer junk they make.

-Mike

Well Apple is stealing from Moto. Moto developed a lot of technology back in the early days and has patents on it. They deserve to make money back on it (based on the current patent system).

Now how much money is the question. And since they are patents considered to be FRAND patents, we will have to wait and see what the judge says when he see's what Moto gets from other companies that have licences the patents.
Score: 5 Votes (Like | Disagree)
samcraig Avatar
130 months ago
Maybe they could use some of them to make products that don't suck.

Never mind, I have a better idea. They could give them to Apple and have *them* do it.

Patents are paper. But they need to make money somehow, right?

They don't have to do anything with them. They can sit pretty and just keep suing Apple if they want. Just because you don't like it doesn't matter. Just like Apple doesn't have to give to charity or care about anyone else but themselves. Motorola is a business - and if they can make money suing for violations of their patents - good for them. You should be happy, LTD - they are doing exactly what you think companies should do. Taking care of their own best interests...
Score: 4 Votes (Like | Disagree)
Steve121178 Avatar
130 months ago
This isn't the Motorola of 30 years ago, nor is it 30 years ago. Time to move on.

Nor do I particularly care at this point that Moto invented the mobile phone technology or whatever the hell they did. That isn't helping them NOW, nor do consumers give a sweet damn about it. What Moto did in the caveman days of consumer mobile tech is irrelevant. Barely anyone remembers. And why should they? Moto is just another dinosaur that deals more in patents than great products.

There real tragedy here is that Sanjay Jha is still CEO *and* Chairman. Not that it really matters at this point.

Dress it up how you want, Apple still stole their IP & must pay.
Score: 4 Votes (Like | Disagree)

Popular Stories

AirPods Pro Gen 3 Mock Feature Red

AirPods Pro 2 Could Start a New Accessory Ecosystem

Friday January 14, 2022 2:34 am PST by
Apple's second-generation AirPods Pro could arrive alongside a new series of accessories, recent leaked images suggest. Alleged leaked photos of the next-generation AirPods Pro obtained by MacRumors showed a charging case with a metal loop on the side for attaching a strap. Apple has not used this design for any of its other AirPod models and it is unclear why it would be added in this...
netflix2

Netflix Again Raises Prices for All Plans, 4K Streaming Now $20 Per Month

Friday January 14, 2022 12:46 pm PST by
Netflix today updated the prices for its streaming plans, and all of its offerings are now more expensive. The Basic plan is now priced at $9.99 per month, the Standard plan is priced at $15.49 per month, and the Premium plan is priced at $19.99 per month. The Basic plan is $1 more expensive, up from $8.99 per month. This plan allows users to watch on just one screen at a time, and it limits ...
iPhone 14 Mock pill and hole 16x9 120hz

Analyst: All iPhone 14 Models to Feature 120Hz Displays, 6GB of RAM, and More

Friday January 14, 2022 7:02 am PST by
Apple is rumored to announce four new iPhone 14 models in September, and ahead of time, analyst Jeff Pu has outlined his expectations for the devices. In a research note with Haitong International Securities, obtained by MacRumors, Pu claimed that all iPhone 14 models will feature ProMotion displays, compared to only Pro models currently. ProMotion enables a variable refresh rate up to 120Hz ...
ios 15

Apple Releases Minor iOS 15.2.1 and iPadOS 15.2.1 Updates

Wednesday January 12, 2022 10:05 am PST by
Apple today released minor 15.2.1 updates for iPhone and iPad users, and the software comes one month after Apple launched iOS 15.2 and iPadOS 15.2 with a slew of improvements. The iOS 15.2.1 and iPadOS 15.2.1 update can be downloaded for free and the software is available on all eligible devices over-the-air in the Settings app. To access the new software, go to Settings > General >...
maxresdefault

Hands-On With LG's 32-Inch UltraFine OLED Pro Display

Wednesday January 12, 2022 1:12 pm PST by
LG in December announced the launch of its new 2022 32-inch UltraFine OLED Pro display, and in our latest YouTube video, we went hands-on with it to see how it compares to Apple's Pro Display XDR and whether it might be worth picking up depending on the price point. Subscribe to the MacRumors YouTube channel for more videos. Officially named the "32BP95E," the display features a resolution of ...
iPad Pro Big Ol Logo Orange

Next iPad Pro Might Feature Large Glass Apple Logo to Allow Wireless Charging

Friday January 14, 2022 10:44 am PST by
Bloomberg's Mark Gurman and Debby Wu last year reported that Apple had tested a new iPad Pro with a glass back for wireless charging capabilities. In a recent edition of his newsletter, Gurman said he expects the new iPad Pro to be released in 2022. While the new iPad Pro is still on track to feature wireless charging, 9to5Mac's Filipe Espósito today reported that Apple may have ultimately...
iPhone 14 Mock pill and hole

iPhone 14 Pro Now Rumored to Feature Both Pill-Shaped and Circular Cutouts

Wednesday January 12, 2022 9:26 am PST by
Apple is widely expected to remove the notch on iPhone 14 Pro models, but there have been conflicting rumors about the new design. Early rumors suggested that Apple would adopt a hole-punch design with Face ID somehow moved completely under the display, and later it was rumored that there would be a pill-shaped cutout instead. Now, display industry consultant Ross Young has claimed that...
fortnite apple logo geforce feature

Fortnite Coming Back to iOS Soon Thanks to Nvidia's GeForce NOW Service

Thursday January 13, 2022 11:19 am PST by
With the Apple vs. Epic Games lawsuit continuing on, there are no signs that Apple has any intention of allowing popular battle royale game Fortnite to return to the App Store on iPhone and iPad. Epic Games has found a workaround though, by partnering up with Nvidia. GeForce NOW, Nvidia's streaming gaming service, will soon add Fortnite support, allowing Fortnite to be played through a...
iMac 27 inch 2020 sale

Deals: Apple's 21.5-Inch iMac Hits Record Low Price of $599.99 ($499 Off) [Update: Out of Stock]

Thursday January 13, 2022 4:05 am PST by
Amazon today has a great deal on the 2017 Intel 21.5-inch iMac (2.3GHz, 8GB RAM, 256GB SSD), priced at $599.99, down from $1,099.00. This is the best price we've ever tracked on this model, and it's only available at Amazon. The sale price will be reflected after an automatic coupon is applied at checkout. Note: MacRumors is an affiliate partner with some of these vendors. When you click a...