Apple's $2.7B Motorola bond actually yearly estimate, could be worth $16B
In a hearing on Friday, Apple made clear that it estimates a bond of $2.7 billion per year will cover the losses suffered if Motorola prematurely enforces possible injunctions on iCloud that are later overturned, according to Florian Mueller of FOSS Patents. He goes on to say that a lawyer on Motorola's legal team mentioned the case may last until 2018, potentially making the $2.7 billion yearly bond worth $16.2 billion.
The suit is part of an ongoing worldwide dispute, with Motorola alleging that Apple's iCloud infringes on certain existing synchronization technology patents. Although previous reports say that Motorola is likely to win at least one of the German suits, Apple still has the ability to set a bond to recoup damages in the event of a win during the appeal process, which could take years.
A permanent injunction can be "preliminarily enforceable" in Germany, meaning that if Motorola wins an initial court hearing it can enforce the ruling prior to appeal, however the company would be liable if the injunction is found to have been improperly granted at the end of the process.
Mueller explains that "the end of the process means that the ruling (or a subsequent appellate decision) can no longer be appealed, or it is appealed but the next higher court isn't willing to hear the appeal, or a party doesn't exercise its right to appeal."
Insurance against an improperly handled injunction comes in the form of a bond, which Apple was thought to have set at $2.7 billion in November, but has gone on to clarify that the figure was an annual payment estimate that would be applied to the number of years it takes to resolve the suit.
Despite the risk of bond liability, some patent holders sometimes go through with preliminary enforcement, possibly to leverage a settlement in a worldwide dispute. In this case, the two companies are waging a worldwide patent war.
It is unclear whether the court will agree to Apple's annual bond, however if the company can prove that the products in question can generate $2.7 billion per year in Germany, the figure may be accepted.
A hearing is set for Feb. 3, 2012, when Mueller expects the court to reveal its decision as to how much Apple's bond is worth.
34 Comments
There is a law suit being filed in the country of the antarctic. The penguin court is set to convene over the patent dispute of thermal dynamics of Mac's and how they stay cool. The cooling effect is an antarctic patent, being that its colder there than any other place on earth. The penguins are very upset and feel that Apple needs to have some respect for the continent and their inhabitants. As of now all Penguins are using Galaxy Tabs and seem to have some sort of bias against Apple and its products. When asking one of the leaders, how they felt about this matter all that could be said was a sort of trumpeting sound and constant pecking at the interviewer. The interviewer barely made it out alive. When asked how he felt about the interview he said My God man they are out for blood.
Patents... the next meaningless thing after analysts
There is a law suit being filed in the country of the antarctic. The penguin court is set to convene over the patent dispute of thermal dynamics of Mac's and how they stay cool. The cooling effect is an antarctic patent, being that its colder there than any other place on earth. The penguins are very upset and feel that Apple needs to have some respect for the continent and their inhabitants. As of now all Penguins are using Galaxy Tabs and seem to have some sort of bias against Apple and its products.
This doesn't make sense. For starters, the iPad specs say functionality isn't supported below 32° F (0° C) and the penguins already got a ban on the device for coming in black and white.
This is a world wide war being fought not on the battlefields, but in the courts and Motorola is part of the Axis powers. These current patent cases are actually going to last for longer than the second world war lasted for.
Motorola doesn't have much of a case, and from my understanding, the patents that Motorola is trying to use against Apple are part of FRAND, much like Samsung is trying to do. That is not going to fly. Apple will crush them all.
Apple should use it's massive cash balance to weaken it's enemies and hurt them financially. The competition and the copytition should quit whining and begin innovating if they wish to remain relevant.
First Judge definitely will not take Apple's claims on face value and will reduce the amount , say to a 1.5 billion dollar per year ( from 2.7 claimed)
Secondly this would be an yearly amount , say for one year the Motorola will need to furnish bond for 1.5 billion dollar, if case stretches beyond that then it will be 3 billion dollar for next year and so on.
So what is the amount that Motorola needs to pay to make a bond of 1.5 billion dollars as of now. Around 1% of the value, since it would be in the form of bank guarantee.
1.5% of a billion dollar is 15 million dollar.
Not a big deal.