Comment by raganesh | Hacker News Reader

Comment by raganesh | Hacker News Reader

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Let's talk about that in context.

Motorola contributed some patents to a mobile telecom standard; they made a commitment to license these standard essential patents in Fair, Reasonable And Non-Discriminatory terms to everyone who wants to build a "portable hand-held telephone device".

Motorola wants 2.25% of the sale price of each Apple device in which the standard is used.

Now, if each patent contributor to the standard demands the same rate as Motorola, the outgo will be above 100%.

Essentially, only those who have contributed to the patent pool can build a mobile phone. No one else can enter the market. How is that Fair, Reasonable or Non-Discriminatory?

That is why there is talk about EU & FTC in US investigating Google/Motorola for anti-competitive behavior.

Also, there is another interesting point here - all these patents are implemented in the baseband chip built by Qualcomm and used by Apple in its devices. Qualcomm has already paid the royalty for using Google/Motorola's patents. Now Motorola wants royalty from Apple also, for the same patents. Double-dipping anyone?

Let's see here... Motorola together with telecom companies such as Nokia, Ericsson, Siemens etc worked for decades in establishing standards and infrastructure for digital mobile phones. In this they were truly succesful, and this would not have been possible unless they had shared patents with each other that were involved in common standards. Then, much later, enters Apple and brings nothing to the table with regards to telecom technology. Why should they not pay?

Apple should pay. No questions about that.

But how much should they pay? In this special case of patents, Motorola is expected to charge Apple the same rates as other licensees. In fact, they have committed to do so.

But now, they are going back on that commitment and also trying to double dip.

FRAND (Fair, Reasonable And Non-Discriminatory) patent commitment is an essential part of standard setting process. If companies are allowed to abuse FRAND committed patents like this, there will be chaos. We'll go back to the digital dark ages when there were no standards or interoperability.

I don't think Apple should pay. And I question whether anyone else should, either.

These "standards-essential" patents are under RAND terms because to do otherwise devalues the patent and provides incentive for the standard to "work around" the patent. If Motorola wants revenue from that patent, they must license it under RAND terms.

But now that there is significant investment in the infrastructure that uses these standards, what right does anyone have in threatening anyone else over their use of this patented technology? Judge Posner, presiding over Apple v. Motorola, which he has dismissed with prejudice, seems to feel the same way: That since Motorola has licensed their standards-essential patent under FRAND terms, they essentially lose their right to demand an injunction against Apple. (At least, that's my reading of his decision.) I.e., they are to negotiate reasonable terms or get no royalties at all.

The question in my mind is at what point these patents should be expired early due to their status as standards-essential; for without them, the standard must be redesigned, and with them, every participant must pay royalties to one incumbent. At no point is this fair, reasonable, or non-discriminatory.

Personally, I don't see the point of this run-around: These patents are not a reward for invention; they're cudgels with which to steal your competitor's lunch money. They should be invalidated or expired for that reason alone.

Rather than having this ambiguous FRAND principle, standards bodies should require that companies that want their patents included in a standard hand over these patents to a patent pool in return for a shareholding in that pool.

I'm dubious of patent pools. What benefit do they provide beside the protection of other members of the pool?

> would not have been possible unless they had shared patents with each other that were involved in common standards

How generous of them to establish open standards like that eyeroll.

Seriously. The whole point here seems to be that people should pay a tax because other people are doing obvious fucking shit. Fuck patents.

> Why should they not pay?

A patent owner can accept FRAND conditions and the patent becomes part of the standard. They then earn a steady stream of licensing money off the ensuing trillion dollar industry.

A patent owner can reject FRAND and their technology does not get included in the standard.

There is no third option.

You can't decide after the trillion dollar industry establishes, to renege on FRAND, because your patent was only made part of the standard -- and therefore only has value -- because of that promise.

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