Apple Vs Motorola Mobility: U.S. Judge Dismisses Apple Patent Licensing Lawsuit

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A judge in a U.S court has dismissed a case brought by Apple against Google-owned Motorola Mobility. Apple had complained Motorola was seeking excessive royalties for standards-essential patents. It’s another small blow for Apple in its legal war against Android. The patents in question are among the 17,000 acquired by Google when it bought Motorola Mobility last year – to bolster Android against legal attacks.

According to the BBC, Motorola sought 2.25 percent of the price of Apple products that use some of its patents — but Apple was only prepared to pay $1 per device.

Being standards-essential, the patents in question must be licensed by Motorola under FRAND (fair and non-discriminatory) terms, however determining a fair price to license a patent can be difficult. The BBC quotes Frost & Sullivan analyst Andrew Milroy noting: “It is very tough to determine what a fair price is of any patent held by a firm. There are complex financial models that are used to evaluate it — but there is a lot of subjectivity and assumption that goes into those. It can hardly be described as a science.”

Detailing why the case was dismissed, Reuters reports that late last week the Judge at the federal court in Madison, Wisconsin, Judge Barbara Crabb, questioned whether she had the legal authority to hear Apple’s claims, and late yesterday dismissed the case with prejudice. Apple filed a legal brief after Crabb’s ruling, arguing that the judge does have the authority to hear its claims — in the hopes of persuading Crabb to reconsider the ruling. If this fails, Apple’s options are limited – FOSS Patents notes it can appeal the ruling but can’t refile the case in another U.S. district court.

The reason for the judge’s dismissal of the case appears to be Apple taking up a position last week that it would not consider itself bound by her FRAND rate if it exceeded $1 per product. Reuters reports that, given Apple’s position, Crabb “questioned whether she had the power to issue merely an advisory opinion” — quoting a statement from the judge last week in which she wrote: “It has become clear that Apple’s interest in a license is qualified.”

FOSS Patents’ Florian Mueller adds

I think Apple missed an opportunity to make important headway against Motorola Mobility. I don’t know Judge Crabb and I didn’t attend any of the hearings, but I read her orders and I really thought she was very solution-oriented. In fact, I thought she would have been a great judge to preside over a FRAND rate-setting trial — a judge that I think an implementer of FRAND standards could really have trusted to arrive at a fair decision. As long as she considered Apple to be genuinely interested in a solution, as opposed to protracted litigation, she was definitely willing to help put an end to Motorola’s wireless SEP assertions against Apple. But when she started to doubt Apple’s intentions, the case fell apart.

After the dismissal, Motorola said it is still open to negotiations with Apple, providing the following statement to news outlets: “Motorola has long offered licensing to our extensive patent portfolio at a reasonable and non-discriminatory rate in line with industry standards.”

Lea Shaver, an intellectual property professor at Indiana University School of Law, is also quoted commenting on the case: “This puts Apple back into the position it was before.”