According to a report for FossPatent, Motorola Mobility -a Google subsidiary is asking for royalty on the difference in price between an iPhone and iPod. That is, if an iPhone is retailing for $600 and iPod $200. Motorola was 2.25% royalty payment based on $400.
According to the Mueller:
Google’s (Motorola’s) “iPhone minus iPod” theory is clearly an attempt to create the appearance of compliance with the Entire Market Value Rule (EMVR), a patent damages theory according to which a patent holder is entitled to a reasonable royalty only with respect to the smallest saleable unit the relevant patents read on (unless the patentee can prove that the related functionality is the primary basis for customer demand). What Google is doing here reverses the concept of the smallest saleable unit: instead of applying 2.25% to the relevant chipsets (baseband and WiFi), which are the smallest saleable units implementing the wireless standards in question, it deducts the price of a separate saleable unit from the same vendor (Apple) that does not come with cellular functionality. Given that the iPod touch supports WiFi, Motorola presumably applies 2.25% to the iPod touch price for WiFi, and then, for cellular functionality, the same 2.25% rate additionally to the differential between the price of an unsubsidized iPhone and that of an iPod touch.
The difference in functionality between an iPod and an iPhone is huge. While cellular connectivity is certainly an enabling technology without which a smartphone wouldn’t work, most of that value is simply not created by cellular standards — which is why an iPhone costs a multiple of a basic feature phone.[/quote]
Source: FossPatent