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Motorola Wants 2.25% of Microsoft's Surface Revenue 278

Posted by Soulskill
from the just-scratching-the-surface dept.
An anonymous reader writes "On the opening day of a patent trial between Microsoft and Google-owned Motorola Mobility, Motorola filed a brief (PDF) arguing that the WiFi tech central to the case is also critical to Microsoft's new Surface tablet. Motorola says royalties totaling 2.25% of all Surface revenues is a good starting point. They wrote, 'Microsoft's new Surface tablet will use only 802.11, instead of cellular or wired connections, to connect to the internet. Without 802.11 capability, the Surface tablet would be unable to compete in the market, because consumers can readily select tablet devices other than the Surface that have 802.11 capability.' Microsoft, of course, says this figure is outrageous, given 'Motorola's promise to standards bodies to offer access to the "standard essential" patents on fair and reasonable terms.'"
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Motorola Wants 2.25% of Microsoft's Surface Revenue

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  • 2.25% of nothing (Score:3, Insightful)

    by Anonymous Coward on Wednesday November 14, 2012 @09:14AM (#41979291)

    unless someone shows good sales numbers for the surface

    • by symbolset (646467) * on Wednesday November 14, 2012 @09:18AM (#41979321) Journal
      Microsoft is purposefully only selling the Surface in their own sales channels - own stores and online - explicitly so others can't report data about how it's doing. They want to tell us it's "sold out". They knew they had to do this in advance, or you would buy the thing at Target and Target would tell you that it's not selling.
      • I was wondering why I couldn't find it at any retail stores and your explanation makes sense. However, it is this very process that is killing the chances of the Surface having any success - most people want to play with the device before they commit their hard-earned money on it. It's a shame: for once Microsoft puts a lot of thought into the design and usability of a device and then uses a distribution method that guarantees it won't gain any traction.

        The Surface: two and half years late, limited app
        • most people want to play with the device before they commit their hard-earned money on it

          Presumably they can do that by visiting the nearest Microsoft retail store [microsoftstore.com] or by finding a real life friend or relative who has visited a Microsoft store.

          • Too bad both of those are VERY rare.

            • by tepples (727027)
              Perhaps Microsoft is test-marketing Surface in Microsoft retail stores because it wants to avoid shortages like those experienced during the launch of the Xbox 360.
          • by mcgrew (92797) *

            The nearest Microsoft retail store [microsoftstore.com] is a hundred miles away [google.com] and I live in a city of 120,000. Epic fail. Who in their right mind would make a 200 mile round trip to see if a new Microsoft product sucked?

            • by tepples (727027)

              The nearest Microsoft retail store is a hundred miles away and I live in a city of 120,000.

              I live in Fort Wayne, Indiana, a city of over 200,000. The nearest Apple Retail Store is 90 miles away in Mishawaka.

              Who in their right mind would make a 200 mile round trip to see if a new Microsoft product sucked?

              People who already live in the test-market cities, or have friends or relatives who live there and visit them carrying a Surface. And they could easily be visiting for reasons other than just to show off the Surface.

  • by Anonymous Coward on Wednesday November 14, 2012 @09:16AM (#41979305)

    Microsoft, of course, says this figure is outrageous, given 'Motorola's promise to standards bodies to offer access to the "standard essential" patents on fair and reasonable terms.'"

    They have - they offered access to the patents for 2.25% - all they have to prove to the court is that this is their standard opening offer to show that it is non-discriminatory and fair.

    If Microsoft want to play, they should offer back some of their FRAND patents to get the rate lowered. That's how the system is meant to work. Oh, but wait, Microsoft is fairly new to this type of hardware so probably hasn't got a lot to offer in this category.

    • by jabuzz (182671)

      I am quite sure that Microsoft don't even need to offer FRAND patents to get the rate lowered. Other patents such as say those on say FAT would probably work as well :-)

    • by rsmith-mac (639075) on Wednesday November 14, 2012 @09:59AM (#41979649)

      We can be pretty sure that Google isn't charging everyone else 2.25%. Google only holds a couple of significant 802.11 patents while organizations like CSIRO hold a larger number of more important patents. If 2.25% was the base rate for just Google's share, you'd be losing 10%+ of your revenue just to 802.11 patent holders.

      This is just Google taking the screws to Microsoft to make a point. They've already tried this once before with H.264 (another tech that they hold only a few patents), going after Microsoft for 2.25% of Windows and Xbox revenue.

      • by JDG1980 (2438906) on Wednesday November 14, 2012 @10:23AM (#41979863)

        We can be pretty sure that Google isn't charging everyone else 2.25%. Google only holds a couple of significant 802.11 patents while organizations like CSIRO hold a larger number of more important patents. If 2.25% was the base rate for just Google's share, you'd be losing 10%+ of your revenue just to 802.11 patent holders.

        Almost everyone else cross-licenses to get a lower rate (or no royalties at all, if their portfolio is big enough). MS and Apple don't have any FRAND patents of their own to cross-license, so they are obligated to pay full freight (2.25% per device).

  • by concealment (2447304) on Wednesday November 14, 2012 @09:25AM (#41979371) Homepage Journal

    It sounds like Motorola has patented using Wi-Fi on tablets.

    Are we really handing patents out for this?

    What if the tablet has a video connector, or a USB port. Who patented that?

    Can I be the guy who patented having a power connection on electronic devices? I'll sit back and let everyone else do the work for a change.

    • Re: (Score:3, Informative)

      by jkrise (535370)

      It sounds like Motorola has patented using Wi-Fi on tablets.

      Are we really handing patents out for this?

      Yes, indeed. Motorola has got patents on WiFi technology on pretty much any device. But consider: Apple has patents on the external shape and icons of the iPad. That is infinitely much worse; and even worse is that Apple feels that 'innovation' is worth $20 per device copying the rounded rectangular shape.

      • by teg (97890) on Wednesday November 14, 2012 @10:05AM (#41979707) Homepage

        It sounds like Motorola has patented using Wi-Fi on tablets.

        Are we really handing patents out for this?

        Yes, indeed. Motorola has got patents on WiFi technology on pretty much any device. But consider: Apple has patents on the external shape and icons of the iPad. That is infinitely much worse; and even worse is that Apple feels that 'innovation' is worth $20 per device copying the rounded rectangular shape.

        Actually, I think extortion on standard essential FRAND patents are far worse than trying to prevent someone from almost xeroxing the device. There are many ways to create devices (cell phones and tablets looked really different before the iPhone), but a standard is just that... a standard. And to get your patent included in a standard, you make promises that should be upheld.

        • by jkrise (535370) on Wednesday November 14, 2012 @10:10AM (#41979747) Journal

          There are many ways to create devices

          Do you have a circular television or a triangular radio? What is so innovative about a rectangular shape that is slightly rounded at the edges? My Casio calculator 30 years ago had the same shape.

        • by thaylin (555395)

          Say what? First how are the promises not being upheld. The promises are defined in the contract, not by MS. There is not a specific rate that must be offered, and negotiations are allowed as part of that promise.

          Also something does not have to be part of a standards body to be a standard. At this point certain shapes that have been known to work best are defacto standards, and not using them means inferior products.

        • by gQuigs (913879)

          > xeroxing the device

          I'm sorry you have violated Xerox's Corporation trademark on the use of the protected phrase "xerox". According to Xerox corporation "you cannot 'xerox' a document, but you can copy it on a Xerox Brand copying machine".

          I think Trademarks are mostly ok how they are, as opposed to the insanity's that are copyright and patents.

      • by blueg3 (192743) on Wednesday November 14, 2012 @01:50PM (#41982019)

        But consider: Apple has patents on the external shape and icons of the iPad. That is infinitely much worse; and even worse is that Apple feels that 'innovation' is worth $20 per device copying the rounded rectangular shape.

        That is a design patent, not a utility patent. They're nothing alike, except for the word "patent". A design patent doesn't cover an innovation at all, it covers the non-functional appearance aspects of a functional object. For example, the external shape and icons of a branded product that are not critical to how it functions but are characteristic of that product. A design patent is supposed to be narrowly-defined. Its function is not to prevent competitors from making a similar product, but rather to prevent competitors from making a knock-off of your product.

        For example, your average Android phone wouldn't infringe on an iPhone design patent. They look and behave similarly, but not the same. You can tell the difference. Now go to a market in China and pick up a knock-off iPhone. It looks exactly like an iPhone, it has the same UI widgets as an iPhone, and it's pretty hard for a casual observer to tell it apart from an iPhone. But it's not. That's a design patent infringement.

        Of course, how well this works in practice comes down to how courts decide individual cases.

    • Yes, they really hand out patents for useful inventions. Just because everyone uses the invention, doesn't mean that there can't be a patent on it.

      • by Sarten-X (1102295)

        I'll also add that we hand out patents for useful inventions to the people who worked out the invention's problems (or at least we try to). No, putting a power connector in an electronic device isn't patent-worthy. Designing a physically-tiny connector that's capable of transferring significant (charging) power, resistant to accidental damage, also usable for data transfer, and durable through millions of use cycles to boot, is something that is definitely worth a patent, but it'll cost you hundreds of hour

        • In general, I agree with you. However I find it to be 'distasteful' that so many patents are not intended to recoup cost and earn money on the invention, but are instead used to block out competition on tangential products.

          Inventing a new Wodidgit and patenting it, then demanding royalties from anyone using the new Wodidgit is one thing. However, patenting the interface to the Wodidgit and then preventing anyone from producing compatible support products is one aspect of the patent system I hate.

          When I wo

  • by Anonymous Coward on Wednesday November 14, 2012 @09:27AM (#41979387)

    Well, Microsoft were claimed to be receiving $15 per Android device. Ar $600 for a device, 2.5% would be $15.

    So what's the problem? Microsoft made claims that Android infringes just 6 dodgy patents. 802.11 is a core patent.

    http://www.groklaw.net/pdf2/MSvB&Nanswer.pdf

    Patents such as : "Loading Status in a Hypermedia Browser Having a Limited Available Display Area."
    Or "“Selection Handles in Editing Electronic Documents.”,

    I don't see the problem with this, they dish it out but they don't take it? Their sales of Surface devices will be far less than Android devices, so they'll pay a lot less.

    • by HCase (533294)

      Honest question. I don't see any reason why they would, but did those Microsoft patents need to fall under FRAND licensing agreements? There is a notable difference between the two scenarios if one is FRAND and one isn't.

  • by kurt555gs (309278) <kurt555gs@@@ovi...com> on Wednesday November 14, 2012 @09:39AM (#41979505) Homepage

    Microsoft has devolved into a corporate raider (Nokia) and patent troll. (HTC, et al). A little of their own medicine is good for them.

  • by sdo1 (213835) on Wednesday November 14, 2012 @09:53AM (#41979603) Journal

    Motorola Wants 2.25% of Microsoft's Surface Revenue

    So give them a couple hundred bucks and be done with it...

    -S

    • by samjam (256347) on Wednesday November 14, 2012 @10:14AM (#41979783) Homepage Journal

      You just struck gold.

      MS don't want google to know how many surface tablets they are(n't) shipping, and that may be the reason to avoid the per-device payment.

      hah hah

      • MS don't want google to know how many surface tablets they are(n't) shipping

        I thought it would be good for the Windows RT platform if prospective developers of applications for Windows RT had an idea of how many potential customers had devices that can run applications for Windows RT. How else does Microsoft plan to draw developers away from iPad, Kindle, and Nexus 7/10?

        • by gl4ss (559668)

          by giving them RT devices and constantly pressurising them with money, booze etc. to do so.

          saying that "you MUST DO YOUR PORT NOW!!! OR YOU'LL BE LEFT OUT OF THE BOAT" doesn't hold that much weight if there's less than half a million potential users.

  • Of course it all hangs on the definiton of "fair and reasonable", which is not exactly something easy to do objectively. If I were to require such licences, I'd say zero would sound very reasonable :) If I would to provide such licences, I'd go for as a high price I could get out of you. They will fight this out and come to terms, one way or the other, and both will say the resulting sum is neither fair nor reasonable :) Well, life is unfair, live with it.
    • by js3 (319268)

      fair and reasonable is actually quite simple. If you're charging everyone .5%and then charging a particular vendor 2.25% it's not fair and reasonable.

      • by thaylin (555395)
        That is not exactly how it goes. If you are cross licensing and charging some people .5% and others 1% it can still be considered fair depending on the patents that are being cross licensed.

        If someone does not want to cross license then 2.25% can still be considered fair, since that person does not want to offer anything and the body determines what is fair.

        Also we are not talking about the price being charged but the price being offered. It would effectively end the negotiation and given an unfair adv

  • So that's like, what... 30 bucks or there abouts?

What this country needs is a good five cent microcomputer.

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