Apple's German win was really our victory, honest, says Motorola

'Years of fruitless negotiation' ending?

By Rik Myslewski in San Francisco, 28th February 2012

Motorola Mobility (MMI) says it has been 'vindicated' in Monday's ruling by a German appeals court, which permitted Apple to continue selling the iPhone and iPad in that country during Cupertino's appeal of a December legal victory in an Apple-MMI patent tussle.

"We believe that inventors should be paid for their innovations, and the Appellate Court in Karlsruhe, Germany has agreed," reads a statement provided to The Reg by an MMI spokeswoman.

As might be expected, MMI casts itself as the wronged party in the patent dispute, which centers on royalties due from Apple for patented wireless technology so central to the operation of 2G, 3G and Wi-Fi communication that the patents involved have been given the legal definition of "standard essential patents", meaning that MMI must make them available under FRAND (Fair, Reasonable and Non-Discriminatory) licensing or face antitrust charges.

"After years of fruitless negotiation with Apple," MMI wrote to The Reg, "Motorola Mobility was compelled to bring patent infringement proceedings and enforce a resulting injunction because Apple refused to negotiate a license agreement." MMI has been seeking FRAND royalties from Apple for over four years, we were told.

While yesterday's ruling has been regarded by some observers as a big win for Apple, Motorola Mobility sees the silver lining. "MMI's determination to collect fair compensation for Apple's use of MMI's patented technology has now been vindicated by the Appellate Court's decision," they write, "which clarified and confirmed that Apple's licensing offer to MMI in January is a contractually binding commitment to pay royalties to MMI on all of Apple's cellular devices."

MMI informs us that Apple has escrowed royalties of 2.5 per cent of German sales of its iPhones and iPads, and has offered to pay what MMI characterizes as a "reasonable royalty rate" for those devices, including the iPhone 4S, which became available in Germany and other countries on October 14 of last year.

The Karlsruhe court, MMI says, ruled that MMI is entitled to "a portion" of the royalties immediately, and if Apple and MMI remain unable to agree upon a final royalty rate, that the escrowing would continue until the courts settle the matter. We were unable to independently verify this claim.

A royalty deal will likely be forthcoming, and with it an agreement – approved by the court – that if Apple challenges the validity of any of the patents involved, MMI can cancel the deal, at which point the whole cycle can start up again.

MMI also reminded us – and we, you – that the Karlsruhe decision in no way affects the other MMI-Apple patent dust-up, which has led to Apple being forced to shut down iCloud and MobileMe push email in Germany. ®

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