In a letter sent by Google to the president of the IEEE in an effort to convince him that Google's proposed purchase of Motorola would not cause any issues with patent licensing, the company indirectly confirmed the 2.25 percent royalty fee that Apple claims Motorola asks of its patent licensees. Google also said that the 2.25 percent of per unit sales fee would continue to be the maximum that it would demand from licensees when it completes the purchase of Motorola and absorbs its patent portfolio.
Apple initially took issue with 2.25 percent figure that Motorola asks from those that wish to license its patents, as it said that it was outside the realm of fair and non-discriminatory (FRAND) licensing terms. Indeed, when you do the math, the 2.25 percent fee amounts to $15 to $19 of what the retail cost of the iPhone 4S is - a pretty significant sum for a single patent license. Apple argues that if Motorola is able to demand that much for its FRAND patents, there is nothing stopping other companies from doing the same and bringing the telecommunications device industry to a grinding halt.
Google has promised that it will also honor Motorola's existing policy of negotiating "good faith" terms with business partners, and that it will not litigate against those who are willing to license its patents.
"Transparency and consistency in licensing practices are important with respect to standard essential patents, and the IEEE and its rules play a critical role in promoting those goals," said Google Deputy General Counsel Allen Lo, who penned the letter. "I am confident that Google's acquisition of MMI will not disturb those goals or otherwise adversely affect the IEEE, its members, or the implementers or consumers of its standards
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