German taxpayers will pay millions to enforce Motorola's patents against Apple

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Taxpayers in Germany's federal state of Baden-Wurttemberg are set to pay out "several million euros" to Motorola due to its enforcement of two patents against Apple.

The cost to locals, explained by Florian Mueller of FOSS Patents, comes from the fact that Germany must pay interest on funds that Motorola Mobility was required to pay under local laws. The interest will amount to millions of euros if the ongoing patent infringement dispute between Motorola and Apple isn't settled "very soon," he said.

Motorola was legally bound to make the deposits because it is enforcing an injunction granted by the Mannheim Regional Court while an appeal is still ongoing in the Karlsruhe Higher Regional Court.

The government collects the security deposit for injunctions to cover potential damages if the injunction is later revoked. The Mannheim regional court ordered two injunctions against Apple, and determined that each required a 100 million euro deposit.

"Germany owes Motorola interest that will be paid out when the deposit is withdrawn, such as after a settlement or a final ruling, but due to rules that the government has to abide, it can't invest those funds in ways that would generate (or save) interest income," Mueller explained.

The interest rate on any deposits is dictated by state law. Mueller calculated that just one of Motorola's deposits, with an interest rate of 1 percent, will cost the government 1 million euros per year.

"We're now talking about a couple of deposits of that kind, and the appellate proceeding may easily take two years," he explained. "In that case, we're talking about several million euros (and an even higher figure if converted to U.S. dollars)."

Motorola originally filed the suit last April against Apple's MobileMe service. After iCloud was announced, Motorola argued in court that MobileMe is "integrated" into the new product and should be included.

The courts sided with Motorola, and forced Apple to disable push notifications for iCloud and MobileMe users in Germany. The serves will remain disabled until the appeals process concludes, unless Motorola and Apple can broker a deal before then.

A week ago, the Mannheim Regional Court opted to uphold the injunction on iCloud and MobileMe services. The court also determined that Apple must pay damages in the suit, though no amount was specified.


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