German Court rules Apple iOS devices infringe Motorola FRAND patents

Mon, Dec 12, 2011

Legal, News

After getting off to a promising start, Apple’s recent efforts to legally dismantle and throttle the momentum of Android are proving unsuccessful.

Hot on the heels of a US Judge denying Apple’s motion for a preliminary injunction against Samsung, Apple suffered a setback in Germany where a Court ruled there that Apple’s 3G capable iOS products infringe upon two patent related to general packet radio service (GPRS) standard.

In addition to an injunction, Apple will have to provide Motorola with sales information as to help formulate how much in damages Apple owes.

For its part, Apple argued that the patents asserted by Motorola could not be used offensively because they’re part of a technological standard. As such, these patents, Apple argued, must be licensed out to all interested parties on fair, reasonable and non-discriminatory terms, otherwise known as FRAND terms.

But thanks to a wrinkle in German law, Apple’s pleas fell short because they failed to adequately make a FRAND offer to Motorola for the patents in question.

FOSS Patents writes:

Essentially, they can’t just hold a FRAND defense against a patent holder who’s suing them. Instead, they have to proactively make efforts to procure a license on FRAND terms by making an irrevocable, binding offer to the patent holder and by posting a bond for ongoing royalties.

Only if the FRAND patent holder denies a license despite having such an offer on the table, the defendant can claim that an injunction would result in a violation of competition law and, as a result, should not be granted.

Interestingly enough, Apple did make a FRAND offer to Motorola but the offer was found to be insufficient because “Apple reserved the right to contest the validity of the patent-in-suit” in the eventuality that Motorola would ever seek to recoup royalties for past infringement.

Put simply, Apple wanted their FRAND deal with Motorola to apply to all future iOS sales while simultaneously trying to prevent Motorola for going after royalty payments stemming form iPhone and iPad sales going all the way back to the original iPhone.

Apple for its part has said it plans to appeal the ruling, and in the interim Motorola has been ordered to post a $134 million bond to be used in a scenario where they enforce the injunction against Apple’s iOS products and it’s subsequently overturned by a higher court. You might remember that Apple initially requested that Motorola post a bond in the $2.7 billion range, a figure which the court deemed to be too high.junction be overturned on appeal. Apple will obviously be appealing the ruling, and will also be requesting a stay to prevent the injunction from being enforced while the appeals process takes place.

Note that Apple products will continue to be available for German customers and that Apple will be requesting a stay to prevent the injunction while the appeals process is underway.

As for Apple’s options, engineering around the patents seem unlikely as they’re related to technological standards.

Addressing the ruling, Motorola issued the following press release:

We are pleased with the court’s ruling. Today’s decision validates Motorola Mobility’s efforts to enforce its patents against Apple’s infringement,” said Scott Offer, senior vice president and general counsel of Motorola Mobility. “Motorola Mobility has worked hard over the years to build an industry-leading intellectual property portfolio that is respected by the telecommunications industry, and we are proud to leverage this portfolio to create differentiated innovations that enhance the user experience. We will continue to take all necessary steps to protect our intellectual property, as the Company’s patent portfolio and licensing agreements with companies both in the U.S. and around the world are critical to our business. We have been negotiating with Apple and offering them reasonable licensing terms and conditions since 2007, and will continue our efforts to resolve our global patent dispute as soon as practicable.

via FOSS Patents


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