Google Catches Break In Apple Case, Still Faces FTC
Judge cans Apple's patent-related complaint, but Google's far from out of the woods. It will next face the U.S. government on the same issue.
Google caught a break Monday when federal Judge Barbara B. Crabb in the Western District of Wisconsin dismissed Apple's lawsuit against the Android-maker with prejudice. Apple believes Google's Motorola subsidiary is abusing its standard essential patents and not licensing them at fair terms. The judge didn't see the need for a trial and canned the whole thing.
Motorola and Apple have been at odds over smartphone licensing terms for some time. Motorola thinks its smartphone patents are worth 2.25% of the retail price of each smartphone sold. When you consider the full retail price of devices such as the iPhone, Apple is looking at $15 to $17 in licensing fees per iPhone, paid to Motorola. Apple suggested that it might pay to license Motorola's patents for less than $1 per device.
Obviously, that's quite a gulf between the two sides of the bargaining table.
"Motorola has long offered licensing to our extensive patent portfolio at a reasonable and non-discriminatory rate in line with industry standards," Google said in a statement. "We remain interested in reaching an agreement with Apple."
Patents deemed standard-essential must be licensed at fair, reasonable and non-discriminatory (FRAND) rates. After receiving numerous complaints from Motorola's competitors, both the FTC and EC are preparing cases against Motorola and its parent company, Google.
Looking down the barrel of a gun held by the federal government, Google might want to settle quickly. If it is convicted of violating FRAND licensing practices, things could get costly in a hurry. The federal government has taken a more active role in overseeing the wireless industry in the last two years, as evidenced by its rejection of the AT&T/T-Mobile merger and establishment of Net neutrality rules.
Judges across the country overseeing the various patent lawsuits among smartphone companies have demonstrated impatience with the complaints. Earlier this year, a different lawsuit between Apple and Motorola was tossed completely when the judge decided that neither party could prove damages and it wasn't worth taxpayers' money to move forward with a trial.
Google is already facing antitrust allegations in other countries over its various business units. Google would do well to avoid adding another to the list.
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