FRAND & Cross Licensing
OK - I get that peoples opinions are that ~2.5% is expensive for FRAND licensing. However, most FRAND licensing is met by cross licensing. Both Motorola and Samsung have asked for 2-2.5% for licensing of their FRAND patents sans cross licensing - perhaps this amount is considered fair?
Lemme put it this way - Say Motorola and Samsung have FRAND patents relating to the 3G standard. They have both invested huge amonts of money in the research that defined these standards. Individually, Moto ask for 2.25% for access to their portfolio, Samsung ask for 2.5% for theirs. Under a cross licensing deal, Moto might only end up paying 0.1-0.2% after negotiations
Enter Apple - who have contributed nothing to the R&D behind these patents and have nothing to offer (or refuse to offer) in a cross licensing deal. Why should they not pay the asking price of 2-2.5%? The rest of the market offers their own patents as payment - making the asking price for Apple fair since they have nothing further to offer.
Lets put this in terms of physical goods, just to be clear. I have sacks of potatoes for sale for £10. Peter has baskets of tomatoes for sale for £6. I want some tomatoes and Peter wants some potatoes. We come to an agreement that Peter can have a sack of potatoes for £3 and a basket of tomatoes. Both parties win. John (Apple) enters the market and I ask for £10 for my potatoes - this is not unfair or discriminatory since John has nothing else to offer. Similarly, Peter will ask John to pay £6 for his tomatoes - this is also perfectly fair and reasonable. John then turns around and tells me I can't use my cart unless I pay him £30 because he thinks all wheels belong to him - despite clear evidence that carts had been moving towards using wheels for years, even though nobody had quite perfected the idea until John.
Unless someone can show me some evidence that FRAND patents are offered from Samsung at significantly lower prices where there is NO cross licensing, I don't see how Apple can complain at the asking price at 2.5%. The fact is, they decided not to pay and simply stole the technology used in the patents and are now trying to claim that the price is unfair even though every other player in the market uses their own patents to offset the cost!
The FRAND patent holders could decide between them that the FRAND patents are worth £200 per device, but still only charge each other pennies to each other due to cross licensing. Offering those patents to a third party at full price would still be fair - it would simply force that third party to bring something other than money to the table.