Apple, Google square off over patent standards

Apple (NASDAQ:AAPL) asked a telecommunications standards body to set rules for how companies licenses its patents, the latest chess move in a string of developments around mobile patents. At the same time, multiple reports indicated that Google (NASDAQ:GOOG) will send letters to numerous standards bodies, assuring them that Motorola Mobility's (NYSE:MMI) standards-essential wireless patents will continue to be licensed on reasonable terms should Google's $12.5 billion acquisition of Motorola close as expected. 

In November Apple sent a previously undisclosed letter to the European Telecommunications Standards Institute, according to a report in the Wall Street Journal, and argued that the mobile industry lacks consistent standards for licensing essential wireless patents. Such patents are often required to be licensed under FRAND terms--fair, reasonable and nondiscriminatory.

Apple, which has tussled with both Motorola and Samsung over such patents in legal cases in Europe, said that a lack of clarity on FRAND terms means that companies are more inclined to sue each other and ask for higher royalty rates for essential patents.

Meanwhile, according to multiple reports from Bloomberg, Dow Jones Newswires and IDG News Service, which all cited unnamed sources, Google will send letters to dozens of standards bodies around the world assuring them that it will license Motorola's patents on FRAND terms should the company acquire Motorola. The European Commission has set a Feb. 13 deadline for deciding whether to approve the deal, and antitrust authorities at the Department of Justice are still reviewing the acquisition. Google has stated that acquiring Motorola's portfolio over more than 17,000 patents was a key element of its acquisition, and that it hopes to shield its Android platform from patent disputes via the portfolio.

"Since we announced our agreement to acquire Motorola Mobility last August, we've heard questions about whether Motorola Mobility's standard-essential patents will continue to be licensed on FRAND terms once we've closed this transaction," Google spokeswoman Niki Fenwick told Bloomberg. "The answer is simple: they will."

The fight over essential patents is not merely an abstract legal battle though. Motorola last year "demanded" that Apple pay it a royalty fee of 2.25 percent on its iPhone and iPad sales, according to a court filing made in California last month. And Motorola recently managed to get a German court to ban the sale of iPhones and iPads in that country, though Apple managed to get the action reversed within hours. At the time the injunction was ordered late last year, Apple said that Motorola "repeatedly refuses to license" a key patent in the case to Apple on reasonable terms.

For more:
- see this WSJ article (sub. req.)
- see this Bloomberg article
- see this Dow Jones Newswires article (sub. req.)
- see this IDG News Service article

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