Federal judge tosses Apple patent lawsuit against Motorola

It's not obvious that "essential" patents are more important. 3G and Wi-Fi are commodity technologies while iOS is less so.

For reference: Apple's patents were for multi-touch/bounce back scrolling which their research showed was worth $30/$40 to consumers. Samsung's patents are one of the many FRAND patents for core 3G/WiFi.

Tim Cook may be no Steve Jobs but he's no Steve Ballmer either...

(Though on the other hand as cash cows go the iPhone and iPad are no Windows and Office).

That said I think the whole Jobs thing is overstated at this point. It's not as if they didn't misstep with Jobs at the helm, and it's not as if they've been turning out bad products since he went (not to mention that everything "post-Jobs" they've done so far was in the pipeline while he was still in charge and would have had his blessing).

MSFT is a software company. AAPL is a hardware company. Does the same mindset apply?

True, but Apple does not have the corporate stronghold that Microsoft did/does although you could argue the App Store point. Also the upgrade cycle in the Apple profit center (iPhone) is only 2 years and is going to get hit hard by the lower ASPs that phones are seeing. I shorted at 674 (http://seekingalpha.com/article/839661-the-iphone-s-growth-r... - I'm dude111), and am going to continue to hold the position for now. I think the holiday quarter is going to be much weaker, in terms of profits, than anticipated.

Apple is killing it with sales of the iPad. 3 million in 3 days is pretty impressive. Combine that with the other refreshes and this Christmas should be another record breaker for Apple.

So not sure where you get this idea that Apple has peaked. If Apple has peaked then so has Google, Samsung, Microsoft etc.

The fifth revision of any product is going to lose some buzz. Remember when new iPods used to generate crazy coverage like the iPhone does today? Now even completely redesigned iPods (like the new Nano) get little mainstream attention. This is not Apple's fault - it is just inevitability, and the only way to fight it it to release completely new product categories (e.g. iPad).

The iPad Mini may be lesser in many ways to the Android 7inchers...but I think this is a smart business decision and in line with how Apple releases products. Apple knows that the first release of any new product will sell well...simply because it is the first of a new Apple product. By leaving out important features (retina, LTE, cameras), it ensures continual upgrade path that will last a few years. At least with the Mini, there is some supply chain justification for leaving out retina displays (which are probably in short demand after being chewed up by all the retina iPads, iPhones and now Macbooks). Leaving out the front camera on the original iPad (despite the obvious need for one) was just extreme cynicism.

The fact is Apple is a smart company that knows how to generate huge amounts of revenue and profits. It uses it's allure and cult-like appeal to sell lesser products at huge margins. Does this make it evil? I don't think so - it just shows it has played the game extraordinarily well.

My perception is that Apple could lose every one of these lawsuits and still make crazy profits, but YMMV.

Looking at this particular case, it seems extremely arrogant for Apple to offer to pay nothing for the ~100M admittedly-infringing products they've already sold.

Their P/E ratio is just 13.26, while Microsoft's is 16.05 and Google is 21.38. While P/E is just one simplistic measure, it does seem to indicate that their stock price already assumes lower future earnings relative to other mature tech companies.

AAPL is not going to have trouble because of lawsuits. It is going to have trouble if/when they lose the magic touch.

At a glance, yes.

I'm not actively trading, but my "system" would have suggested to consider shorting them on 9/20 and again on 10/23.

I think you're right about public perception. For that reason, I think heavily about any signals with a technical base.

I've had some sense of a perception shift since summer when the price was in this area previously. Though, I haven't taken a real position on AAPL since it was going sideways around $380 almost a year ago.

It's possible that Apple and Moto are both being evil here; just because Apple lost doesn't mean Moto's policy is justified.

"In being sued by Apple, Google has obviously become a predatory competitor."

"A judge recently threw out the case citing that Apple knowingly violated the patents and it's clear the lawsuit was part of a hostile negotiation."

"Does that mean we have to return the iPhones and iPads we were given?"

Relax. There are PLENTY of legal problems for Google.

You have the FRAND investigation in US, EU, SK. The countless lawsuits over Google News. The recent finding in Australia of defamation against Google because of their search results. How that plays out in the future will be interesting. The privacy violations over DNT and major concerns/lawsuits over the cross-product privacy policy in EU, Canada and elsewhere.

Then I expect there to be a wave of lawsuits over Google's intelligent search results e.g. flights, tickets, offers, shopping which are very similar to Microsoft's "embrace and extend" approach.

Seems like everyone misses the "do no evil" Google.

Doesn't the non-discriminatory part just mean you have to license these patents to everyone who is willing to pay the fair and reasonable price? I don't see why that term would have any connection to individual products, and setting a different price for each product is reasonable accounting for the volume you expect to be sold of the product and the importance of the patented functionality to the product.

Frankly, it's a cell phone, so you could argue that the technology being licensed here is the core of the product.

FRAND doesn't mean that the fee is the same for everyone. FRAND royalty deals are negotiated on a case-by-case basis - such deals will often include a cross-license for some of the other party's patents, and this will tend to reduce the royalty paid.

Aren't these FRAND patent fees handled through the actual baseband chipset manufacturer? From a logistics point of view, it seems like it would much simpler for Qualcomm to charge each of the licensees a fee for using the licensed tech present in their chip. Otherwise, it's all x FRAND committee members going out and looking for fees from all y manufacturers that use the patents in question.

First of all, I think it might be good if the FTC sue Motorola to explicitly nail down how FRAND patents can be used.

Secondly, I'm happy to see Motorola (Google) going after Apple and Microsoft with these patents. They are the two greatest perpetrators of unreasonable software patent abuse and they also both helped shape the system as it currently exists.

To be clear: If Motorola were going after other companies, I would have a problem with that type of behavior. Apple and Microsoft, however, deserve every kind of patent abuse they are getting (and then some).

The crux of the issue is whether or not Motorola was discriminating against apple. If everyone else that licenses Motorola's patents pays 2.5% why should apple pay less? What gives them that right to special treatment?

While i agree with you on almost everything... Why didn't Apple accept to be bound by the courts (supposed to be fair and reasonable) rate? Something smells here about this, and it's coming from Apple.

Apple and Microsoft both are trying to make FRAND patents become cheap, so they can just tax Android to hell with their utility patents.

"However, many of them want Apple to pay more per device than competitors. Part of this is that Apple has sucked up most of the profit in the industry and they want it back."

Yeah, PART of it is this. Part.

The other part is it that Apple has amassed a war chest of UI patents which it is mobilizing against all of the makers of smart phones. The wireless standard holders are essentially saying "cross-license your stuff OR you pay through the nose for our stuff". And indeed, why should Motorola or Nokia be reasonably with their "intellectual property" if Apple clearly isn't going to be similarly reasonable? Nokia began the patent war, indeed but on the specific basis that Apple wasn't cross licensing its outside-the-standard-but-stilled-needed-for-a-smart-phone-stuff.

It only sounds greedy when you don't give the big picture.

Software patents that are not that easy to side step as mdasen present it to be. the software patent is a patent over an idea, and as ideas goes, 3 button on a phone can mean anything from 3 physical buttons, 2 buttons + touch area, 3 areas on a touch screen marked by a button icon, to 3 vocal commands as "conceptual button".

Maybe bounce-back function for over-scrolling is easier to bypass, maybe its not. Reading the actually patent gives no clues however, as it easy could cover the highlight on over-scroll implementation that android has.

"It seems that the disagreement is over the percentage model that Motorola wants. Motorola wants 2.25% of the full retail price of the device. So, if you make a dumbphone for $35, you pay 79cents. If you make a 16GB iPhone 5, you pay $14.63. Somewhat ridiculously, if you make a 64GB iPhone 5, you'd pay $19.13."

There is a simple solution: Sell iPhones w/ little memory and sell the memory separately. Of course, then other people can also sell that memory, probably at a cheaper price. If you want to charge a premium on memory, then you should let Motorola charge a premium, too.

Correct me if I'm wrong, but I think everyone who licensed with moto initially was given a 2.25% rate, but they cross-licensed patents to bring that down. Apple doesn't want to cross-license hence they're whining about how they think FRAND(non-discriminatory) terms aren't being followed, when in reality Apple's getting the same negotiation everyone else gets, but Apple doesn't want to play ball and cross-license patents like everyone else.

It's a pretty tenuous claim on Apple's part.

That's a good one. I needed a chuckle.

I actually agree on the point about linking to primary sources, but having said that Florian Mueller is a proven shill and his analysis should never be trusted at face value by anyone, particularly when he's analyzing anything to do with Google.