| kanageddaamen said: 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 Again, MS MUST pay for technology they use, and what Motorola is asking for is not unreasonable. |
The problem with your argument is that Motorola's patent is a standards patent, and it's one patent that is required for decoding H.264 encoded video. For the $9.50 that the Blu-Ray Association charges (not Sony) you're licensed for all the respective patents associated with the technology, including H.264 video decoding as it is a required standard for playing Blu-Ray discs. Based on your argument, you're saying 1 patent for $4.50 to $9.00 is fair, but that's 47% - 95% of the cost of the entire patent suite necessary to license Blu-Ray. There is no way those are fair and reasonable terms.
Not to mention, how is 2.25% on a 250GB Xbox 360 justifiable when the same technology is available on a 4GB Xbox 360? Why shouldn't it be a single price? Why should a patent holder benefit from the increased price of value added accessories that have nothing to do with the patent? That isn't fair or reasonable.
Microsoft's not trying to get out of licensing the technology it's using, they've been negotiating the terms for sometime. The problem has been that Motorola has agreed to license its standards patents (H.264 and Wi-Fi) under FRAND rules, and it is failing to do so. No judge has said Microsoft's argument isn't valid, just that Microsoft and Motorola are improperly using the courts. In fact the ITC has ruled that both Microsoft and Motorola are in violation of each other's patents and that both companies products that are in violation should be banned from import. The difference at this point is that the ITC in Motorola's argument against Microsoft has yet to release its full recommendation. They have, however issued the full recommendation to ban the import of Motorola mobile devices.
