Apple Inc. (NASDAQ:AAPL) has been working against Motorola Mobility in a patent lawsuit, in which Motorola has had the advantage, and has put Apple Inc. (AAPL) in a position to be forced to pay a licensing fee for use of the a patent that covers essential cellular and Wi-Fi standards – thus, a patent that could be legally “infringed” as an industry standard, but is subject to such a licensing fee.
Apple Inc. (NASDAQ:AAPL) just submitted documents in a court filing that said the company was willing to pay Motorola Mobility – which is now owned by Apple arch-rival Google Inc. (NASDAQ:GOOG) – a maximum of $1 per iPhone that contains this essential patent. Through the course of this litigation, which has gone one for two years, Apple Inc. (NASDAQ:AAPL) has been working from a position of strength in terms of being able to justify the current offered amount and no more. Motorola Mobility had originally sought to claim a license fee of 2.25 percent of Apple Inc. (AAPL) revenues, which would have put the number into the billions of dollars per year, instead of a couple hundred million. Apple has a case, buoyed by the lack of evidence by Mobility to justify its own rate, much less anything more than $1 per phone, since its one primary “expert” witness, according to Apple’s brief, “cannot testify about a particular rate at trial” because the judge ruled that it “did not offer any opinion about what particular rate or range or rates would constitute a FRAND (fair, reasonable and non-discriminatory) royalty.”
This brief came in Wednesday upon a request by Motorola Mobility for clarification of Apple’s position. Looking over the brief, once could surmise that Apple Inc. (NASDAQ:AAPL) very effectively clarified its position, and will not budge. There is no timetable yet for when the judge in this case will consider the brief and rule upon it, but it does seem from court observers that Apple Inc. (NASDAQ:AAPL0 would definitely have the upper hand in this case, and this could set a standard for intellectual property going forward. Apple Inc. (NASDAQ:AAPL) investors like billionaire fund manager Julian Robertson of Tiger Management were certainly aware of Motorola Mobility’s extensive patent portfolio, and thus may be ecstatic to see Apple Inc. (AAPL) come out of this tussle with a reasonable licensing fee.