In a bench ruling on Monday, U.S. District Judge Barbara Crabb in Madison, Wisc., unceremoniously threw out Apple Inc.’s claims that Motorola Mobility Inc. breached a contractual duty to license its wireless patents on fair, reasonable, and non-discriminatory (FRAND) terms. With trial set to begin the same day, Crabb decided that there was no point in trying the case, because Apple said it wouldn’t be bound by the court’s determination of what would constitute a fair royalty for Motorola’s IP.
For five years, Apple and Motorola have been trying unsuccessfully to negotiate royalty rates for their respective wireless patents. Because the companies have both told standard-setting bodies that their patents are essential to industrywide standards, the companies have a legal duty to license their patents on FRAND terms. Motorola, which Google Inc. acquired in 2011 for $12.5 billion, has asked Apple to pay a royalty rate of 2.25 percent per iPhone or iPad sold. Apple has balked at the figure, which amounts to billions of dollars per year.
The dispute boiled over into the courts in March 2011, when Apple sued Motorola for breach of contract and patent misuse. Apple, which is represented by Covington & Burling and Tensegrity Law Group, alleged that Motorola breached its FRAND duties by demanding such hefty license fees. Apple also asked for injunctive relief in the form of an order requiring Motorola to license its wireless patents on reasonable terms, to be determined by the court.
Read the full article at The AmLaw Litigation Daily (subscription required).
