Apple (NASDAQ:AAPL) offered both Motorola Mobility (NYSE:MMI) and Samsung a way out of their respective ongoing patent litigation fights by licensing some of Apple's patents, according to a report in the Wall Street Journal.
The report, which cited unnamed sources, said that Apple does not want to offer patent licenses to all its competitors or create a royalty business. However, the report said Apple, which has won some victories against Motorola, Samsung and other Android handset makers while losing others, may find it impractical to block Android form the market.
Instead, Apple could effectively increase the price of using Android, which Google licenses for free, by tacking on royalty payments. That is a strategy that Microsoft (NASDAQ:MSFT) has pursued with great vigor, winning licensing deals from HTC, LG, Samsung and other Android handset makers. Google is seeking to close its $12.5 billion acquisition of Motorola and bought the company partly for Motorola's patent portfolio in the hopes of using it to shield other Android licensees.
An Apple spokeswoman did not immediately respond to a request for comment and a Motorola spokeswoman declined to comment. However, Samsung seemed defiant in the face of the report. Samsung filed a fresh patent-infringement lawsuit against Apple in South Korea on Wednesday, and said Apple's iPhone 4S and iPad 2 infringe on three of its patents. Further, according to a Korea Times article, JK Shin, the head of Samsung's mobile communications business, said: "No compromise!"
Apple has been locked in legal cases related to patents with Samsung since last year and with Motorola since 2010, and the cases have spanned multiple continents. According to the Journal article, Apple asked for between $5 and $15 per handset for some of its patents in one negotiation with Motorola, or roughly 1 percent to 2.5 percent of net sales per device.
Motorola last year "demanded" that Apple pay it a royalty fee of 2.25 percent for some its essential wireless patents, according to a court filing made in California in January. Apple has criticized Motorola's move and has argued that the mobile industry lacks consistent standards for licensing essential wireless patents. Such patents are often required to be licensed under FRAND terms--fair, reasonable and nondiscriminatory.
- see this WSJ article (sub. req.)
- see this Bloomberg article
- see this Reuters article
- see this Korea Times article
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