Apple (AAPL), Motorola (MMI) Patent Litigation to Cost One German State Millions
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Apple (Nasdaq: AAPL) and Motorola (NYSE: MMI) continue patent litigation in the German state of Baden-Württemberg, but will a delay in settlement lead to the ire of themselves?
Possibly. FOSS Patents reported Friday citizens of Baden-Württemberg, which run the Mannheim courts overseeing the litigation between Apple and Motorola, may face millions in euros as Motorola looks to enforce its patents against Apple unless a settlement is reached soon.
Reasoning is because German law requires companies that enforce an injunction granted by a court of first instance to make a deposit of funds while the appeal is ongoing. When funds are withdrawn, Germany would pay out interest accrued with the deposit to the company until a settlement is reached.
According to FOSS: "The interest due on any single one of Motorola's several deposits exceeds by a factor of almost 3 the amount that has been allocated in the state budget for the aggregate cost of all such deposits (statewide)."
Basically, Motorola and Apple are tangled up for two patents -- one on a Motorola wireless-essential patent and one on a non-standard-essential push notification patent -- of which Motorola was required to deposit about €100 million each, and possibly a few more deposits. Initial thoughts point to the deposits not mattering. Baden-Württemberg will easily pay interest if it just invests the money and forgets about it until funds are withdrawn. The kicker is that Baden-Württemberg law has that minimum requirement stipulation. Risky investments are out and German bunds are drawing low rates right now.
FOSS also points out that annual interest cost to Baden-Württemberg would be about €1 million. Multiply that by the number of total investments and the number of years litigation will be ongoing, and the number easily adds up to the several million euro range.
It may not seem like much for a state with €360 billion in GDP, but with debt issues looming all over, every little bit of financial preservation counts.
Apple shares are off 2 percent Friday while Motorola is about flat.
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Possibly. FOSS Patents reported Friday citizens of Baden-Württemberg, which run the Mannheim courts overseeing the litigation between Apple and Motorola, may face millions in euros as Motorola looks to enforce its patents against Apple unless a settlement is reached soon.
Reasoning is because German law requires companies that enforce an injunction granted by a court of first instance to make a deposit of funds while the appeal is ongoing. When funds are withdrawn, Germany would pay out interest accrued with the deposit to the company until a settlement is reached.
According to FOSS: "The interest due on any single one of Motorola's several deposits exceeds by a factor of almost 3 the amount that has been allocated in the state budget for the aggregate cost of all such deposits (statewide)."
Basically, Motorola and Apple are tangled up for two patents -- one on a Motorola wireless-essential patent and one on a non-standard-essential push notification patent -- of which Motorola was required to deposit about €100 million each, and possibly a few more deposits. Initial thoughts point to the deposits not mattering. Baden-Württemberg will easily pay interest if it just invests the money and forgets about it until funds are withdrawn. The kicker is that Baden-Württemberg law has that minimum requirement stipulation. Risky investments are out and German bunds are drawing low rates right now.
FOSS also points out that annual interest cost to Baden-Württemberg would be about €1 million. Multiply that by the number of total investments and the number of years litigation will be ongoing, and the number easily adds up to the several million euro range.
It may not seem like much for a state with €360 billion in GDP, but with debt issues looming all over, every little bit of financial preservation counts.
Apple shares are off 2 percent Friday while Motorola is about flat.
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