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fillet on 22 June 2012
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kanageddaamen said:
Jereel Hunter said:

Well, I never said anything about it being treated as anti-trust behavior. The link I posted up above - is a licensing standard than Motorola has agreed to. In short, it's not just to prevent monopolies, but to prevent a company from attempting to extort money with a non-major, but critical patent, as motorola is doing here.

The 360 is a media hub - more time is spent on it by people watching movies/TV than gaming. To remove it's video capabilities, it DOES cease to function. It's like removing a car's undercarriage and saying "you can store things in the trunk, raise and lower the windows, use the radio and AC - this car still functions."

And yes, they must pay motorola, but the point is, not what motorola is charging. Companies agree to a set of standards which don't permit them to do this - and they agree to this set of standards so it can't be done to them. The company wants what will amount to $4 Billion a year from MS - this is ridiculous. The "reasonable rate" is described in that article: "a reasonable licensing rate is a rate charged on licenses which would not result in an unreasonable aggregate rate if all licensees were charged a similar rate."

Now, Microsoft is a massivle profitable company. But consider most companies with it's revenue. They aren't pulling in profit margins like Microsoft. You add $4 Billion in licensing fees for relatively trivial reasons and  suddenly you have a company deep in the red, and facing financial disaster. They are charging this rate BECAUSE Microsoft can afford it, but the standards they are legally bound to adhere to require the pricing to be reasonable, not whatever they deem fit.

Even though I reject tha rgument that it "ceaces to function" and think your anaolgy is remarkably misguided (I would equate it to removing a trailer hitch from a truck.  The truck can't tow anything any more but you can still use it to get from place to place.) Lets run with it.

You are arguing that this technology is INTEGRAL to the success of the product, that it cannot function without it.  Motorola is asking 2.25% royalties for this absolutely essential function that would it be removed, make the product unusable.  That is not unreasonable at all.  Now I am not certain if this is retail or not, lets assume a nice round average of $350/console.  That is $7.88 for each console.  A pittance with what the video ability means from a profit standpoint for the 360

Lets look at a blu-ray player, which sony charges a $9.50 licesing free for regardless of price.  This is nearly 20% of the cost of a $50 product.  No one argues that is extortion.

Again, MS MUST pay for technology they use, and what Motorola is asking for is not unreasonable.

Actually you have contradicted yourself, 2.25% of each sale for a product that more than likely makes use of hundreds of patents is entirely unreasonable.

The bluray player is completely different, the WHOLE specification is provided to the manufacturer for reference, and they pay only $9.50 for it - that is a bargain.

If Microsoft charged $9.50 for a manufacturer to license the Xbox 360 specification and allow manufacturers to copy it, would you think that is expensive?

That's just 3 points, your logic is completely backwards and I could samurai slice your argument into pixie dust if you would like me to further, I really can't be bothered though :)

 

...One more, you seem to be confused about the idea of a patent being pivotal to the function of a product, that idea does not mean the patent should be worth more, it actually helps the argument of the opposite of what you are trying to argue. A patent that is pivotal to the function of a product does not make that patent more "expensive" or "valuable", the patent has a set value regardless of what product that patent is used in, in this case it simply means that a court is more likely to side AGAINST!!! that company in a court case because they will assume the patent holder is holding the licensee of the patent to ransom because in this particular instance it is pivotal to it's function.

The point is that the Xbox 360 makes use of a patent that is pivotal to it's function, but that patent does not make up a significant function of the said product.

You clearly have no idea of how these things work though, no disrespect but read up on the very basics of patents law and you'll see the errors of your ways and not regard my post as a patronising piece of rubbish. :)