Apple And Motorola Discussed Settlement Involving Patent Licenses

Apple Inc. (AAPL) and Motorola Mobility Holdings Inc. (MMI) held talks late last year over a potential cross-licensing deal that would have settled the two company's bitter patent lawsuits, according to a new document.

The legal detail was in a footnote of a report posted to the European Union's website on Google Inc.'s (GOOG) bid to purchase Motorola for $12.5 billion. Google also makes the Android mobile operating system that runs handsets made by large manufacturers including Samsung Electronics Co. (SSNHY, 005930.SE), HTC Corp. (HTCXF, 2498.TW) and Motorola.

According to the document, which was reported earlier by Bloomberg News, Apple and Motorola held talks in late 2011 to discuss the scope of any potential settlement in the event that Google's bid to purchase Motorola was approved.

The report added that Apple had said Motorola had insisted on a cross-license of the Cupertino, Calif., company's entire patent portfolio in exchange for licenses to Motorola's wireless patents. Motorola's patents, which cover wireless technology such as 3G, are considered essential for making mobile devices.

Earlier, Google had said it plans to continue Motorola's licensing practices, including a 2.25% royalty for its patents.

Apple declined to comment, though in the past it has criticized Motorola for the licensing terms it requested. Motorola did not immediately respond to a request for comment.

Apple and Motorola have sued one another in multiple courts around the world alleging their products infringe the other's patents. The suits have become particularly contentious in Germany, where the two companies have been handed both victories and losses.

In February, Apple temporarily suspended sales of some online smartphones and tablets in Germany after Motorola enforced an injunction against them that was handed down by a local court. According to the document, Motorola chose to enforce that inujunction after Apple refused to agree to the full cross-license.

The EU document said that Motorola has sought cross-licenses possibly "to the benefit of all Android" manufacturers.

Apple has put forth proposals of its own to Motorola. In one negotiation, Apple asked for between $5 and $15 per handset, or roughly 1% to 2.5% of net sales per device, in exchange for licenses to some of its patents, one person familiar with the matter said.

-By Ian Sherr, Dow Jones Newswires; 415-439-6455, ian.sherr@dowjones.com

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