
Federal judge tosses Apple patent lawsuit against Motorola - lnguyen
http://news.cnet.com/8301-13579_3-57545283-37/federal-judge-tosses-apple-patent-lawsuit-against-motorola/
======
mrich
For reference: Apple is willing to pay a maximum of $1 for patents that make
their device a functioning phone. Two years ago, they offered Samsung to
license some of their less important patents for $30 per phone and $40 per
tablet.

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

~~~
mcantelon
A phone without something like multi-touch is more useful than one without
3G/WiFi (or am I missing something in what you're saying)?

------
foxylad
I was wondering the same thing a couple of days ago. The iPhone5 hasn't got
the buzz previous releases had, and the iPad mini seems to be less and later
than comparable android 7" tablets. Apple is also putting increasing energy
into patent lawsuits, which is another sign of a company resting on it's
laurels. And of course they've lost Jobs.

Having said that, although I think it likely that Apple has peaked, I wouldn't
short it just yet. I had the same opinion about Microsoft ten years ago during
the years bewtween XP and Vista. Linux was surging ahead, Windows was going
nowhere, lawsuits started flying and Bill Gates stepped down. Actually, now I
commit this to text, the comparison is spookily similar!

But my point is that it took about 8 years before there was any effect on
their share price. My experience is that what seems obvious to us now takes
years to filter through to market sentiment. So if you're going to short
Apple, do it 10 years out (if that's possible).

~~~
Tyrannosaurs
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).

~~~
brudgers
Agreed.

Cook is not the second largest shareholder of Apple stock and does not have a
thirty year working relationship with the largest shareholder.

Thus, unlike Ballmer, Cook serves at the pleasure of Wall Street.

~~~
Tyrannosaurs
While being beholden to Wall Street is a double edged sword, you need to be a
special sort of person to really work without being answerable to anyone in
the way Jobs and Gates did.

I think Ballmer shows that for lesser mortals, some responsibility is a good
thing.

~~~
brudgers
The suggestion that Jobs was not answerable to Wall Street is false.
Successful share price growth kept Wall Street from asking a lot of questions
for a long time. Had there been less success, history might have repeated
itself.

Even had he lived, Wall Street would have gotten the dividends they demanded.
This in no way makes his success less impressive, but it is perhaps foolish to
mythologize it.

------
debacle
Is it time to short AAPL? They've lost some value recently, and the growth
proposition doesn't seem to be where it has been. I could see them stay where
they are, even with an earnings miss or two, however they are very much a
stock traded on public perception.

~~~
ryanhuff
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.

~~~
revelation
Or it indicates that they are a hardware company, which is to say their
ability to grow (or sustain) their business depends on any number of factors,
not the least being political stability and conditions in China. Factors over
which they can exert very little control.

------
mtgx
So where does this leave FTC who have been looking to accuse Google of the
same thing? Do they need to start looking for other "crimes" to accuse Google
of anti-trust now?

~~~
taligent
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.

~~~
DannyBee
Google was never "do no evil", only "don't be evil" which is very different.

------
mdasen
So, this wasn't a trial about Apple using patents against Motorola. It was
Apple filing suit against Motorola's use of patents against it.

Basically, when a standard is created the standard will likely use patented
technology. Think about H.264. It isn't free. However, it is open (anyone is
allowed to create hardware and software using the standard, so long as they
pay the fee). Also, that fee is the same for everyone. These terms are FRAND
(fair, reasonable, and non-discriminatory). It's essential for standards to
ensure competition.

Then there are things that aren't standards. I'm not saying that you should
agree with patents or anything like that, but they do exist and this
distinction is made. If you hate patents (and I'm not saying you shouldn't),
then they're all bad and we should get rid of them all. Disclaimer aside,
let's say that you patented having 3 buttons on a phone (home, back, menu) ala
some Android phones. There are many other ways to implement that
functionality. Maybe that's the best combination of buttons and users love it.
However, even in the Android world, we see phones with on-screen keys and no
buttons, ones with 4 buttons, etc. You could even do something cool like a
touch area with swipe left for back, touch for home, and swipe right for menu.
Nothing there would kill your ability to create a device worthy of people
spending money on. Taking a real-world example, let's look at Apple's bounce-
back function for over-scrolling. Android 4 now does a highlight on over-
scroll rather than the bounce-back. While a user might say, "the bounce-back
looks better", it doesn't prevent a party from creating a device worthy of
users' money.

Now, if you can't send signals using the technology that cell sites use, that
does prevent one from making a device worthy of users' money. Those patents
are standards essential. Now, when groups set standards, they will work around
the patents of any company that doesn't want to license their patents under
FRAND terms. However, companies want standards to use their technology because
while they might not be able to extort money, they're guaranteed that everyone
will use it. There's a big distinction between things you have to license and
things you can implement differently with a little creativity and, as such, we
treat them differently.

In the Apple/Motorola case here, Motorola (along with others like Nokia,
Ericsson, Siemens, others) helped develop the wireless standards. They have to
license their patents under FRAND terms. 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. Before Apple, Nokia
was doing pretty well. Now? Motorola had been sliding for a bit, but Apple
certainly helped that along by creating much better devices than pre-Android
Motorolas.

Basically, there are patents that you're required to use and since you're
required to use them (you can't build a phone without them), they have to be
licensed under fair, reasonable, and non-discriminatory terms. The FTC looks
like they will recommend that the government file suit against Google/Motorola
over what the FTC sees as Motorola abusing these standards essential patents
against Apple and Microsoft ([http://www.bloomberg.com/news/2012-11-01/ftc-
staff-said-to-f...](http://www.bloomberg.com/news/2012-11-01/ftc-staff-said-
to-formally-recommend-google-patent-suit.html)).

So, this isn't a suit about Apple pushing UI patents against Motorola that got
tossed here. This was Apple trying to get Motorola to license their technology
under FRAND terms.

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. Apple seems to be arguing that FRAND means that you can't discriminate
like that. Motorola, still losing money, wants a large portion of those
profits while still being able to profit off of cheaper devices. One can make
the argument that the percentage model is non-discriminatory, but it doesn't
fly well by me. Non-discriminatory isn't with respect to the price of the
device or the money you're making off of it.

~~~
naner
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).

~~~
rayiner
> 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).

This isn't patent abuse at all. The patents in question involve sophisticated,
complex technologies (Wi-Fi and video compression). It's not the type of thing
you accidentally stumble upon--these were technologies created by a
consortium, including Motorola, at substantial cost. Licensing the underlying
patents, and litigating if those patents are infringed, is how the members of
the consortium recoup those costs. The situation presents the classical case
of applicability for patents--you want the technology to be openly
disseminated, so it can be used as a standard, but don't want people to be
able to use it without paying.

As much as people kvetch about standards patents, they're an example of the
patent system working well. You have an industry consortium (of specialists in
a specific area) which develops complicated technology then standardizes it
for everyone to use. Companies who want to be compatible with the standard
then license the patents underlying the technology. The patents are just the
legal glue that facilitate that transaction. Patent litigation is the
mechanism by which the terms of that transaction are enforced--just like
litigation is always the mechanism by which the terms of transactions are
enforced.

~~~
jivatmanx
I agree with this - A similar example of patents working in a reasonable
manner is the pharmaceutical industry, where the time and money investment of
developing a new drug is astronomical, and it can be reasonably argued that
this justifies the 20-year monopoly that a patent entails.

The above cannot be said for design patents. Because there are essentially no
barriers to entry in getting a design patent, yet they last the same 20 years
as the development of a new drug, it's easy to see this getting stupid and
destructive for the tech industry.

------
malandrew
Can we just agree to always link to the FOSS Patents blog for all these
stories in the future? Florian Mueller is always the very first one to report
on these and does a much better job at analysis. Here on HN, we should
actively replace upvoted articles with the primary source when it is clearly
the better source of information.

<http://news.ycombinator.com/item?id=4745820>

~~~
georgemcbay
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.

~~~
malandrew
I never claimed he was unbiased just like no one would claim that Gruber is
unbiased. But having posts from source like CNET that just water down the
original source make it to the front page adds absolutely nothing of value.

Imagine if every John Gruber article worthy of making it to the front-page
only ever made it to the front page after being laundered by a site like CNET?
I think everyone can agree that we would be worse off without the original
voices.

One of the biggest losses of not having original voices, even from the most
biased of biased bloggers, is that it also dilutes the counter-arguments of
those on HN that provide the balance to biased articles. For example, a direct
link to Florian Meuller's article may elicit a response from a contributor
like yourself where you point out where Florian's analysis may be wrong and
shouldn't be trusted. Without Florian's post to rebut, it's more likely that
people like yourself would remain silent on the issue.

~~~
blrgeek
Perhaps we should just agree to link to Groklaw instead of a paid shill? [Who
doesn't always admit his backers?]

~~~
malandrew
I definitely like groklaw above the rest. Did he post on this issue as well?

~~~
blrgeek
She, Pamela Jones [aka PJ], has posted far more reasoned, and unbiased [by
money] posts on Motorola Vs Apple.

<http://www.groklaw.net/article.php?story=20121105153442192> and
<http://www.groklaw.net/article.php?story=2012110322254380>

are just the latest on throwing this FRAND case out.

------
leeoniya
for every one of these lawsuits i wish there were 10 more. we seriously need
to get the patent courts so backed up that it should take 17 years to get your
case in front of a judge and the same amount of time to secure a patent on an
idea.

