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Motorola has been causing some trouble for Apple in Germany recently, with the company winning and injunction on iCloud and enforcing a previous ruling that required the Cupertino giant to pull some iPhone models from stores in that country. The sales ban only lasted a few hours as Apple managed to win a suspension later in the day. Now, some new details have surfaced regarding the ongoing battle.
According to recently uncovered court documents from Motorola Mobility's legal complaints against Apple, the handset maker is seeking 2.25% of Apple's sales of wireless devices in exchange for a patent license covering its intellectual property. Should the company win its case, it stands to receive nearly $2.1 billion in retroactive fees from iPhone revenues since 2007, which amount to just under $93 billion. That's before factoring in 3G enabled iPads.
At issue in this particular case is a 3G/UMTS patent owned by Motorola that has previously been declared essential in implementing open industry standards and thus the company must license it under FRAND (“fair, reasonable and non-discriminatory) terms to any competitor that requires it.
Apple contends that the 2.25% fee is excessive -- something that Florian Mueller of FOSS Patents agrees with -- and has filed motions to obtain information from several other handset vendors, including Nokia, HTC, LG, and Sony Ericsson, presumably to find out how much they're paying in royalty fees to Motorola.
If Apple can prove Motorola has abusively wielded its FRAND patents then it could not only escape the sales injunction in Germany, but throw Motorola in the middle of an an antitrust investigation with the European Commission. The EC is already investigating Samsung over potential antitrust behavior for the same thing.
On the other hand if the courts decide that Motorola's licensing proposal is reasonable, Apple would have to decide between letting its cost structure take the hit or possibly having to negotiate a cross-licensing deal that could grant Motorola -- and by extension Google -- access to some of its own patented innovations.
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