Why did Apple refuse to pay FRAND royalties for 4G tech?

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Apple Ordered to Pay Over US$500 Million in Damages for 4G Patent Infringement

A Texas court has ruled that Apple must pay over US$500 million in damages and interest for infringing on 4G LTE technology patents held by intellectual property company PanOptis. Apple has stated its intention to appeal this decision. PanOptis, which specialises in licensing patents, initiated legal action against Apple in February of the previous year, alleging that Apple had refused to pay for the use of its 4G LTE technologies incorporated into iPhones, iPads, and Apple Watches.
Details of the Dispute

The core of the dispute centres on Apple's refusal to engage in a licensing agreement for patents related to 4G LTE technology. PanOptis, in its court filings, stated that it had repeatedly attempted to negotiate a FRAND (Fair, Reasonable, and Non-Discriminatory) license with Apple. This standard is widely adopted within the IT industry for the use of essential technologies. However, these negotiations reportedly failed because Apple declined to pay the demanded FRAND royalty.
Apple's Defence and Broader Concerns

Apple's defence in court included arguments that the patents in question were invalid. Beyond this specific defence, Apple has publicly expressed broader concerns about the nature of such lawsuits. The company has stated that legal actions initiated by entities that accumulate patents primarily to harass the industry ultimately hinder innovation and negatively impact consumers.
The Business Model of Patent Licensing Firms

The case against Apple is representative of a larger trend involving licensing firms that do not manufacture products but instead hold rights to specific technologies. These companies, often referred to by critics as "patent trolls," focus on asserting their patent rights through litigation. PanOptis, for instance, advertises its services as managing clients' patents, thereby enabling those clients to focus on their core activities of innovation and product development. This situation is not unprecedented for Apple, as a Texas court has previously ruled against the company in similar patent litigation cases, ordering substantial payments to another firm, VirnetX.

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Why did Apple refuse to pay FRAND royalties for 4G tech?

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