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Google and Motorola are accused of conspiring to inflate FRAND patent prices

Sources: Microsoft, Reuters

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By JasonMick (blog) on 2/23/2012 6:59:10 PM , Rating: 2
What moto is doing here can be simply called "bait and switch." They agree to FRAND and let standards (like H264) use their patent. Now that the standard is set in stone, forget FRAND and charge insane $$$.

I generally agree with you, but to be fair weigh that Microsoft is looking to charge equally insane $$$ for its non-FRAND patents.

My point is just that the state of the mobile industry is becoming increasingly litigious. I'm not saying this makes violating FRAND promises any more acceptable, what I'm saying is if action is NOT taken, FRAND will be dramatically weakened, as mobile players will simply refuse to focus their money and effort on standards development.

To give a hypothetical dollar scenario, say you traditionally received $0.02 for your FRAND patent, but you had several companies paying you. Well you would ultimately make a few million off all these companies' cumulative licensing fees over the course of a couple years. By contrast, you might make a modest amount more -- say $10M or $15M USD off a non-FRAND patent suit and settlement, right up front -- but there was a greater risk involved, as you could lose the case.

Now this situation has drastically changed.

As stated in my articles, I would estimate the market impact of Microsoft's extreme licensing fees and Apple's litigation approaching potentially BILLIONS in revenue for Samsung and Motorola, FRAND goes from being a tradeoff to being utterly useless.

The Samsung licensing concession alone should be worth at least $1B USD in pre-tax revenue for Microsoft.

Again, this is solely because of the increasing litigious nature of the smartphone industry. It just isn't worth it to idealistically develop patents hoping to help everyone to win and cooperate, and profit of everyone's mutual success. In today's market the other guys are trying to stomp out your business with lawsuits, and you patent to fiscally attack and kill.

That's the direction the market is going in.

You can argue, "Oh just make unique handsets and you'll have nothing to worry about."

Sure there's some merit to that argument, but if you look at Android as a platform -- particular Ice Cream Sandwich, there's plenty of creative stuff going on.

But recall that the traditional path of software development is towards ubiquitousness and homogeneity, as customers expect one nice, common interface. Thus thinking too far outside the box (e.g. Windows Phone) will likely not be a good decision in terms of sales.

Even Apple and Microsoft concede this via their actions. For example Google baked notifications into Android as a clever update system (patent pending) and lo-and-behold Apple "borrows" the idea and plops a near-identical, highly derivative system in iOS 5.0 -- which they're even now putting in Mountain Lion, their personal computer OS.

Everyone borrows from everybody else, the difference is that everyone is now SUING who happens to be on a different platform these days. The industry's slogan could perhaps be surmised as "sue different". Apple may have launched this trend, but there is a fair amount of culpability on all sides, given Android's role in escalating the conflict on a global basis.

Overall, all of these suits add up to less cooperation and less features, which is a loss to the end user.

"A lot of people pay zero for the cellphone ... That's what it's worth." -- Apple Chief Operating Officer Timothy Cook

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