| > Apple's legal argument was always that Qualcomm's per-device (ie, final product) royalty basis licensing offer was not FRAND. Apple believes that the royalty should be based on the cost of Qualcomm's chips instead. But, of course, there is no legal basis or industry practice to support Apple's unfounded claim and, consequently, LOST EVERY lawsuit based on this claim for past 10+ years. Qualcomm demanded a percentage of the retail selling price of phones using it's modems. Similarly, Google bought Motorola for it's patent portfolio and famously lost a lawsuit against Microsoft after demanding a 2.5% cut of the retail cost of Microsoft hardware (estimated to be about 4 Billion dollars a year) using it's standards essential patents. > Motorola sent a letter to Microsoft asking it to pay as much as $4 billion per year to license patents relating to the 802.11 standard that underpins Wi-Fi and the H.264 video encoding standard. https://www.computerworld.com/article/2955773/microsoft-best... Google lost the case and the appeal, and the courts imposed a flat 3 million dollar per year licensing fee instead of the ~4 Billion a year that Google demanded. https://www.vox.com/2015/7/30/11615248/google-loses-bid-to-o... So, this is hardly an unfounded claim. |
No, that's not how it works. Apple does NOT have licensing agreement with Qualcomm. Apple's contract manufacturer, or CM's -- such as Foxconn -- are the primary licensees of Qualcomm's wireless portfolio. Apple's royalty -- or indirect payment to Qualcomm via CM's -- likewise is based on Foxconn's pre-existing licensing agreement with Qualcomm (which even predates Apple's first iPhone) and on Foxconn's manufacturing/wholesale price, which is typically 1/3 or 1/4 of Apple's retail price (often under $400 -- not surprisingly Qualcomm's licensing fee maxes out at $400).
>> Similarly, ... ( using it's standards essential patents. ... So, this is hardly an unfounded claim.
The Motorola case does not support Apple's royalty-basis theory at all, First, Judge Robart does not invalidate end-user device as royalty-basis, or favors SSPPU promoted by Apple. Second, his decision was based on two critical considerations: merits/value contribution/significance of the patents asserted against Microsoft. And, in order to determine an appropriate price/range, if there existed any comparable RAND licensing practice adapted by other patent holders in the industry. In Motorola's case, their patents were relatively frivolous and insignificant in value/merit contributed, and their royalty rates were simply out of whack -- certainly 1000x out of common industry practice in the video encoding/802.11 wireless business.
Qualcomm is an industry pioneer with numerous seminal contribution under their belt. Their licensing practice also conforms with long-held de facto industry practices; though there are some aspects of their licensing business that are bit quite anticompetitive -- royalty-basis is not among them however.