Apple may still be liable for $7 billion in UK 4G iPad & iPhone patent trial

I fail to see how a verdict that the parents ARE essential fits with an award equivalent to $7 billion.  These seem contradictory.  

radarthekat said:

I fail to see how a verdict that the parents ARE essential fits with an award equivalent to $7 billion.  These seem contradictory.  

Why?  Them being essential is what means that Apple has used them and needs to pay licensing fees.

chutzpah said:

radarthekat said:

I fail to see how a verdict that the parents ARE essential fits with an award equivalent to $7 billion.  These seem contradictory.  

Why?  Them being essential is what means that Apple has used them and needs to pay licensing fees.

To date, Apple has sold in excess of 1 billion phones around the world; it's unclear if this ruling means a fee is owed for every device sold or only for those sold in the UK where the patents are held. I can't quickly find any reports of sales numbers for 4G and newer phones so let's just stick with 1 billion devices as the ballpark figure.

If the total damages is 5 billion pounds or US$7B, that means a fee of US$7 per device for the TWO (count 'em!) infringed patents. Maybe there's a penalty in there for wilful infringement, but it still seems high.

I found this report which states that as of 1st Jan 2022 there are ~200k STANDARDS ESSENTIAL PATENTS for the 4G and 5G technology suites, and the number is growing at roughly 25k per annum. If every SEP is worth US$3.50 per device sold, then every 4G/5G-capable wireless chip and software package would sell for US$700k rather than (as a rough estimate) US$60-ish.

This is another example of private interests being incapable of forming a workable technology standard and of patents being a net drain on the world's economy. The theory is that by submitting your patents to the pool you are trading a theoretically possible higher wholesale price for the theoretically increased volume of being part of every component shipped. It is therefore simpler and cheaper for manufacturers to adopt the standard and allow the authoring parties to profit from their work - no muss, no fuss.

But of course, greed is rampant and has been exacerbated by a legal system that faces contradictions in property ownership laws; precedent in many jurisdictions has led to expectations that SEPs are, like any other patents, defensible by the IP owner where the rights have not been fully transferred to the standards body. I think you'd solve a lot of problems if standards bodies were mandated to be the legal owners of all patents submitted to the pool, but no doubt that would introduce other issues that I haven't considered.

I mean, seriously: if the patents are essential to the standard then they should be ratified by the standards body and that should be prima facie evidence. They should also then be covered by the licensing fee that any manufacturer pays to the standards body, end of story.

FileMakerFeller said:

I mean, seriously: if the patents are essential to the standard then they should be ratified by the standards body and that should be prima facie evidence. They should also then be covered by the licensing fee that any manufacturer pays to the standards body, end of story.

Ideally, sure.  But if the standards body doesn't receive or doesn't ratify a patent then that doesn't mean that the patent isn't valid or essential for the standard.  The world is a complicated place.

radarthekat said:

I fail to see how a verdict that the parents ARE essential fits with an award equivalent to $7 billion.  These seem contradictory.  

FileMakerFeller said:

chutzpah said:

radarthekat said:

I fail to see how a verdict that the parents ARE essential fits with an award equivalent to $7 billion.  These seem contradictory.  

Why?  Them being essential is what means that Apple has used them and needs to pay licensing fees.

To date, Apple has sold in excess of 1 billion phones around the world; it's unclear if this ruling means a fee is owed for every device sold or only for those sold in the UK where the patents are held. I can't quickly find any reports of sales numbers for 4G and newer phones so let's just stick with 1 billion devices as the ballpark figure.

If the total damages is 5 billion pounds or US$7B, that means a fee of US$7 per device for the TWO (count 'em!) infringed patents. Maybe there's a penalty in there for wilful infringement, but it still seems high.

I found this report which states that as of 1st Jan 2022 there are ~200k STANDARDS ESSENTIAL PATENTS for the 4G and 5G technology suites, and the number is growing at roughly 25k per annum. If every SEP is worth US$3.50 per device sold, then every 4G/5G-capable wireless chip and software package would sell for US$700k rather than (as a rough estimate) US$60-ish.

This is another example of private interests being incapable of forming a workable technology standard and of patents being a net drain on the world's economy. The theory is that by submitting your patents to the pool you are trading a theoretically possible higher wholesale price for the theoretically increased volume of being part of every component shipped. It is therefore simpler and cheaper for manufacturers to adopt the standard and allow the authoring parties to profit from their work - no muss, no fuss.

But of course, greed is rampant and has been exacerbated by a legal system that faces contradictions in property ownership laws; precedent in many jurisdictions has led to expectations that SEPs are, like any other patents, defensible by the IP owner where the rights have not been fully transferred to the standards body. I think you'd solve a lot of problems if standards bodies were mandated to be the legal owners of all patents submitted to the pool, but no doubt that would introduce other issues that I haven't considered.

I mean, seriously: if the patents are essential to the standard then they should be ratified by the standards body and that should be prima facie evidence. They should also then be covered by the licensing fee that any manufacturer pays to the standards body, end of story.

Yes, $7 billion would be an absurd amount for just Optis' patents. But the actual amount, pending appeal, was already determined a couple of months ago and it was around $5 million per year. Apple would get a global license and have to pay around $60 million total which would cover previous years plus interest and 5 years into the future.

There have been multiple trials and corresponding appeals in this case; it was broken up into 5 parts. So AI might have missed the judgment (from the so-called Trial E) that determined the FRAND rate and that's why it suggests that a much higher number is still on the table. (For what it's worth, I don't think such a high number was ever really on the table.)