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
124 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
124 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
124 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
124 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
123 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
123 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)

Top Stories

General Apps Messages

All Three Major U.S. Carriers and Google Adopt Rich Communication Services, But No Sign of Apple Interest

Tuesday July 20, 2021 1:15 pm PDT by
For the last several years, Google has been pushing a new communications protocol called Rich Communication Services, or RCS. RCS is designed to replace SMS, the current text message standard, and it offers support for higher resolution photos and videos, audio messages, bigger file sizes, better encryption, improved group chat, and more. Verizon today announced that it is planning to adopt...
AirPods Pro Beta Firmware

AirPods Pro Beta Firmware Now Available

Wednesday July 21, 2021 6:50 am PDT by
Upcoming AirPods Pro firmware updates are now available to Apple Developer Program members as beta versions. AirPods Pro firmware beta one features FaceTime Spatial Audio and Ambient Noise Reduction. Custom Transparency mode, including Conversation Boost, was initially expected to be included in the beta but appears to have been delayed for a later version. Apple made the announcement...
maxresdefault

Apple Music to Livestream Premiere of Kanye West's New Album 'Donda' on Thursday

Wednesday July 21, 2021 1:49 am PDT by
Apple Music on Thursday will host a global livestream for the premiere of Kanye West's tenth studio album, titled "Donda." The sold-out event will take place at the Mercedes-Benz Stadium in Atlanta, Georgia, and Apple Music's livestream will start at 8:00 p.m. Eastern Time. The livestream was revealed in a Beats Studio Buds ad that aired during the NBA Finals. The ad features U.S. track...
ios wifi settings

Apple Confirms iOS 14.7 Fixes WiFi Bug and Many Other Vulnerabilities

Wednesday July 21, 2021 11:38 am PDT by
Following the release of iPadOS 14.7 this morning, Apple has shared details on the security updates that are included in iOS 14.7, iPadOS 14.7, macOS Big Sur 11.5, watchOS 7.6, and tvOS 14.7, all of which came out this week. Notably, Apple's documentation confirms that the iOS 14.7 and iPadOS 14.7 updates address a WiFi-related vulnerability that could impact iOS devices when joining a...
16 inch macbook pro m2 render

Gurman: Redesigned MacBook Pros to Launch Between September and November

Sunday July 18, 2021 7:39 am PDT by
Apple can be expected to release its redesigned 14-inch and 16-inch MacBook Pros sometime between September and November, as part of another packed fall season for new product launches, according to Bloomberg journalist Mark Gurman. In the latest edition of his Power On newsletter, Gurman says that the new MacBook Pros will go into production in the third quarter and can be expected to be...
macOS Malware Feature

Common Windows Malware Can Now Infect Macs

Wednesday July 21, 2021 8:13 am PDT by
A common form of malware on Windows systems has been modified into a new strain called "XLoader" that can also target macOS (via Bleeping Computer). Derived from the Formbook info-stealer for Windows, XLoader is a form of cross-platform malware advertised as a botnet with no dependencies. It is used to steal login credentials, capture screenshots, log keystrokes, and execute malicious files. ...
magsafe battery pack solo

Hands-On With Apple's MagSafe Battery Pack

Tuesday July 20, 2021 11:14 am PDT by
The new MagSafe Battery Pack that Apple debuted this week is arriving to customers starting today and it's also now available for in-store pickup in many Apple retail locations around the world. We snagged one this morning and thought we'd take a look at it to let MacRumors readers know if it's worth the $99 asking price. Subscribe to the MacRumors YouTube channel for more videos. As the name ...
macOS Big Sur Feature Orange

Apple Releases macOS Big Sur 11.5 With Podcast App Updates and Bug Fixes

Wednesday July 21, 2021 10:15 am PDT by
Apple today released macOS Big Sur 11.5, the fifth major update to the macOS Big Sur operating system that launched in November 2020. macOS Big Sur 11.5 comes two months after the release of macOS Big Sur 11.4. The new ‌‌‌‌‌macOS Big Sur‌‌‌‌ 11.5 update can be downloaded for free on all eligible Macs using the Software Update section of System Preferences. macOS Big Sur...
apple tv 4k design green

Apple Releases tvOS 14.7 for Apple TV HD and Apple TV 4K

Monday July 19, 2021 10:04 am PDT by
Apple today released tvOS 14.7, the seventh update to the tvOS 14 operating system that initially debuted in September 2020. tvOS 14.7 comes two months after the launch of the tvOS 14.6 update. tvOS 14.7, which is a free update, can be downloaded over the air through the Settings app on the Apple TV by going to System > Software Update. ‌‌Apple TV‌‌ owners who have automatic software ...
ipad pro m1 feature

Apple Releases iPadOS 14.7 With Apple Card Merging Option, Fix for 3.5mm Headphone Jack to USB-C Adapter Bug

Wednesday July 21, 2021 10:18 am PDT by
Apple today released iPadOS 14.7, marking the seventh major update to the iPadOS operating system that came out in September 2020. Apple already released iOS 14.7 on July 19, but for some reason, delayed the iPadOS 14.7 debut until today. The iPadOS 14.7 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 ...