The European Commission sent a preliminary antitrust complaint to Google's (NASDAQ:GOOG) Motorola Mobility, alleging that the company is abusing its dominant position by seeking an injunction against Apple (NASDAQ:AAPL) in Germany for infringing on its wireless standards patents.
According to the EU, Motorola claimed that it would license the GPRS wireless standard on FRAND (fair, reasonable, and non-discriminatory) terms but that it sought an injunction against Apple in Germany on the basis of a GPRS patent and, after the injunction was granted, went on to enforce it, even though Apple had said it would be willing to pay the FRAND royalties as determined by the German court.
"The protection of intellectual property is a cornerstone of innovation and growth. But so is competition," Joaquín Almunia, the EU's competition commissioner, said in a statement. "I think that companies should spend their time innovating and competing on the merits of the products they offer--not misusing their intellectual property rights to hold up competitors to the detriment of innovation and consumer choice."
The European Union's policy making body agreed that injunctions, which can block the sale of products, can be used as a possible remedy for patent infringements. However, the commission said that with standard-essential patents that practice can turn abusive, especially when the company accused of infringing is prepared to license the patents on FRAND terms.
According to Bloomberg, Almunia last year sent Samsung Electronics a formal complaint over its use of patents and is looking into adopting "rules of the game" to stop companies from using their patents as legal weapons.
"We agree with the European Commission that injunctions should only be sought against unwilling licensees and, in this case, Motorola Mobility followed the procedure established in the German Supreme Court's Orange Book ruling," Motorola spokeswoman Katie Dove told Bloomberg. "Apple had to make six offers before the court recognized them as a willing licensee."
The case is notable because only a few months ago, as part of its settlement with the U.S. Federal Trade Commission, Google agreed to stop seeking sales bans on products that infringe on the standards-essential patents it owns. Part of the FTC's investigation revolved around Google's $12.4 billion acquisition of Motorola, and Google's use of Motorola's patents. In essence, the FTC found Google guilty of abusing its patents for wireless standards, which are supposed to be licensed at reasonable royalty rates to others. As part of the settlement, Google agreed to license its standards patents on FRAND terms.
Google last year said it valued Motorola's "patents and developed technology" at $5.5 billion, according to a regulatory filing with the Securities and Exchange Commission. Google acquired a portfolio of more than 17,000 wireless patents when it bought Motorola, and had said it would use the patents to shield licensees of its Android software from patent litigation, but that strategy has so far had a mixed record in court.
- see this release
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- see this Bloomberg article
- see this Reuters article
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