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Apple threatens UK market exit if court orders 'unacceptable' patent fees

appleinsider.com

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Re: Apple threatens UK market exit if court orders 'unacceptable' patent fees

#31

Post by _Understated_ »

Taniwha wrote: post #26
mjburgess wrote: post #14

Let's be clear. This is a patent troll company engaged in anti-innovation rent-seeking behaviour. They're seeking billions in payouts and provide zero innovation, research, development, etc. Just because it's targeting Apple doesn't make it right. Companies of this type should be illegal. A patent is a government-sponsored monopoly which shouldn't be "pooled" by "patent companies" whose only purpose is to use the sta…

How would this look different from someone holding a perfectly valid patent that Apple was using without licensing it? (I have no idea as to whether this one is valid or not, I'm as against patent trolls suing people with bogus patents as anyone else) Surely the patent IS the innovation, and a perfectly valid way to use that innovation is to license it to larger companies.

It should be fairly trivial for a judge to ascertain whether someone owns a patent to use legitimately (tech company owning a tech patent for example, whether they are currently using it, invented it, bought it etc.) or whether they are a bunch of lawyers extorting money from legit companies by (ab)using the legal system.

Re: Apple threatens UK market exit if court orders 'unacceptable' patent fees

#32

Post by mjburgess »

Taniwha wrote: post #26
mjburgess wrote: post #14

Let's be clear. This is a patent troll company engaged in anti-innovation rent-seeking behaviour. They're seeking billions in payouts and provide zero innovation, research, development, etc. Just because it's targeting Apple doesn't make it right. Companies of this type should be illegal. A patent is a government-sponsored monopoly which shouldn't be "pooled" by "patent companies" whose only purpose is to use the sta…

How would this look different from someone holding a perfectly valid patent that Apple was using without licensing it? (I have no idea as to whether this one is valid or not, I'm as against patent trolls suing people with bogus patents as anyone else) Surely the patent IS the innovation, and a perfectly valid way to use that innovation is to license it to larger companies.

The patent holder would be a company operating in the same market as apple, having a viable market for products somewhat related to the patents they hold. Eg., an electronics company.

If they can't meet that condition, sell the patent to a company who can. They'll actually innovate with it (ie., use the licence feeds to fund something useful).

Re: Apple threatens UK market exit if court orders 'unacceptable' patent fees

#33

Post by willis936 »

gcthomas wrote: post #21
mhandley wrote: post #12

Earlier quoted context omitted.

So that's around 7 million phones per year. Assuming around £700/phone and 30% profit (very rough made up numbers), that should be £1.5B/year profit. If the judgement is for £3B to £5B as the article states, I can see why they might decide to exit the UK market. But that only makes sense if they don't then lose the patent cases in other juristictions, and end up having to pay similar royalties anyway.

I'm not sure that leaving the market will absolve Apple of paying the judgement, so staying in the UK market will help them recoup the cost. Leaving would be unlikely to improve their bottom line, so the judge was right - no evidence Apple will leave. This is just posturing, which won't go down well in front of a High Court judge.

Why would Apple pay the fine?

Re: Apple threatens UK market exit if court orders 'unacceptable' patent fees

#34

Post by londons_explore »

tut-urut-utut wrote: post #16
mjburgess wrote: post #14

Let's be clear. This is a patent troll company engaged in anti-innovation rent-seeking behaviour. They're seeking billions in payouts and provide zero innovation, research, development, etc. Just because it's targeting Apple doesn't make it right. Companies of this type should be illegal. A patent is a government-sponsored monopoly which shouldn't be "pooled" by "patent companies" whose only purpose is to use the sta…

In this case, I'm glad it's actually targeting Apple. There are a bunch of small innovative companies targeted by patent trolls that don't have means of Apple to fight back and actually change the system to be more level-headed. But I'm afraid Apple will not fight for the reform of the patent system, but will just try to protect itself. In which case I don't care about the outcome, since Apple also uses the same pate…

> bunch of small innovative companies

The smart move for the patent troll is to target some of these smaller companies and write license agreements in the form of "I agree to pay $20 per device sold to license this patent". $20 is nothing to a company selling Ships, Oil rigs, tunnel boring machines, etc.

Then when it comes to apple, paying $20 per iphone is suddenly rather expensive, but the troll can show the court lots of licensees all agreeing to pay that rate, and it can then be established as a reasonable rate for this specific patent.

Re: Apple threatens UK market exit if court orders 'unacceptable' patent fees

#35

Post by forty »

amelius wrote: post #7

When a quasi-monopolist threatens to exit your market ... perhaps the reason why isn't really all that important.

That indeed feels like a great opportunity to create something new :) though I'd rather it happening not because of patent trolls :/

Re: Apple threatens UK market exit if court orders 'unacceptable' patent fees

#36

Post by mjburgess »

londons_explore wrote: post #29
mjburgess wrote: post #24

Earlier quoted context omitted.

Sure -- my conditions were on the holder of the patent, not whether it can be sold. In the case the patent owner isn't doing any R&D or engaging in economically productive activity (at all; nor esp. related to the patent). I think we need, even a very minimal, condition here: The government is only going to shake-down your competitor if you're actually in the same market. If you're just a guy hold a slip of paper, so…

> In the case the patent owner isn't doing any R&D But by licensing the patent to interested parties, they might be supporting R&D of people who might not otherwise be doing R&D in this direction. The ability to license some tech you know is likely to work in the form of a patent has some value.

They might be. All of this can be weighed by judges.

I'd be inclined to say: sorry, licensing/selling to companies not in the market is now not possible.

If you need to mitigate risk, insurance companies (etc.) can offer products against patents -- they still have value, just only now to companies actually operating in the relevant market.

And of course, "relevant market" can be read broadly by judges.

Either way, patent law is running amok over innovation, and goverment shake downs and money transfers from producers to rentseekers is a net loss for everyone.

Re: Apple threatens UK market exit if court orders 'unacceptable' patent fees

#37

Post by inertiatic »

mjburgess wrote: post #28
Tenoke wrote: post #20

Earlier quoted context omitted.

They are literally fighting it with this case, no? Exiting if they fail will also be great as it might become more clear to those who can change the system how much of a detriment it is.

If apple's UK iPhone profits really are in the c. 50mil range, then a (5 to 10)bn fee to remain is commercially non-viable. Note that this is about Apple's ability to sell an iPhone in the UK, and as far as I can see, it wouldnt affect whether the entire company would remain in the UK. If I were apple, I would withdraw a product from a country which supported this kind of racketeering.

Apple sells 7 million iPhones a year in the UK, Google tells me. Even at just 100 profit a unit, should be way more than 50 million in profit. Ignoring income from other things like accessories, the store etc.

Re: Apple threatens UK market exit if court orders 'unacceptable' patent fees

#38

Post by mjburgess »

onion2k wrote: post #30
mjburgess wrote: post #14

Let's be clear. This is a patent troll company engaged in anti-innovation rent-seeking behaviour. They're seeking billions in payouts and provide zero innovation, research, development, etc. Just because it's targeting Apple doesn't make it right. Companies of this type should be illegal. A patent is a government-sponsored monopoly which shouldn't be "pooled" by "patent companies" whose only purpose is to use the sta…

It shouldn't matter who owns a patent. If the person or company who registered it has decided to 'cash it in' and sell it to a company whose business is patent licensing is OK. Whether or not the patent is valid is the important issue. Optis 'won' $506m in the US as well, but the supreme court reverted the decision on Apple's appeal. The UK court has decided that it is valid (for now). Something very important to not…

Well as you say it's "leave the market for mobile phones", ie., it'll be iPhone which goes -- rather than Apple as such.

If the fee is 20x on their profits from iphones, personally, I'd leave -- for a few years at least. The opportunity cost is very high: leave for 2+ years and prompt the UK gov to act. Then return.

Also, my issue is exactly with "validity" conditions. Regardless of what they are, my view is we need a change in the law to make cases of this kind non-starters.

My initial stab is this: patents have to held by companies operating in the relevant market to be valid. The ensures licensing fees go towards companies capable of innovation, and limits patent trolling.

I'd prefer, even, to add: those companies are using those patents; or otherwise, have +10 years from their last use in a product (etc.).

However, one step at a time.

Re: Apple threatens UK market exit if court orders 'unacceptable' patent fees

#39

Post by MR4D »

It seems like this is the part that most offends Apple:

“* In 2020, the UK Supreme Court ruled a UK court can set the rate for patent payments worldwide, despite the court only being able to consider the infringement of UK patents.*”

If every country took that approach that the UK Court seems to be taking, international trade would suffer greatly.

Re: Apple threatens UK market exit if court orders 'unacceptable' patent fees

#40

Post by jowsie »

wccrawford wrote: post #23
benjaminjosephw wrote: post #5

The UK has a relatively strong chance of creating decent competitive challengers to Apple if the UK market opens up with their exit. Even if a few consumers are frustrated in the short term this could lead to a fantastic outcome for a competitive consumer marketplace over the long-term.

It would create quite a power vacuum, and it would scare people in other countries as well. But I'm not convinced that it would cause a new competitor to exist. I think it's more likely that existing companies will eat up that market instead, and I don't think there are any UK companies poised to take over that market segment.

People will simply import iPhones from elsewhere, or buy Samsungs instead.
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