E.U. Rules Against Patent Play by Google's Motorola Unit

Share with others:


Print Email Read Later

Correction Appended

BRUSSELS -- The European Commission on Monday made a preliminary antitrust finding against Google's mobile communications unit, Motorola Mobility, for seeking and enforcing an injunction against Apple in Germany over patents essential to smartphones and tablets.

The finding, which could lead to a steep fine, comes as the commission tries to ensure that companies do not wield their patent portfolios to block others from using the technologies vital to developing some of the most popular consumer electronics.

"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," Joaquín Almunia, the European Union's competition commissioner, said in a statement.

Motorola Mobility obtained an injunction from a German court preventing Apple from using patents called standard-essential for the industry.

The commission said it regarded some injunctions to enforce patent claims as legitimate. But it said that holders of standard-essential patents who had already agreed to fair, reasonable and nondiscriminatory licensing terms had to meet certain standards before resorting to injunctions.

Google referred questions to Katie Dove, a spokeswoman for Motorola, who said the company had followed the procedure in a German court ruling.

"We agree with the European Commission that injunctions should only be sought against unwilling licensees," Ms. Dove said in a statement.

Motorola has two months to respond to the charges.

Of concern to regulators in Europe is how certain national courts, in particular in Germany have made it relatively easy to win injunctions in such cases, and how that could eventually result in a manufacturer having to take a popular device off the market.

"The patent wars are now widespread," said Michael A. Carrier, a Rutgers Law School professor who specializes in antitrust law. "But there hasn't yet been an injunction that has really taken phones out of people's pockets, and that's probably one thing that the Europeans are probably really worried about."

Google completed its acquisition of Motorola Mobility last year to take advantage of patents to bolster its Android operating system. Google picked up 17,000 patents, including many relating to wireless devices that Motorola, a pioneer in the wireless phone business, had pledged to license on reasonable terms.

Those commitments were made to technology standards organizations, intended to assure that basic technical innovations were widely available, stimulating growth in the industry.

While virtually all the major tech companies have sought legal or regulatory intervention, one of the biggest battles has been between Apple and Samsung, the South Korean maker of smartphones and tablets. Apple has complained about Samsung's using designs and packaging from the iPhone and iPad while Samsung has accused Apple of infringing its wireless telecommunications patents.

Samsung came under formal investigation by Mr. Almunia late last year for the way it has used standard-essential patents and sought injunctions against its competitors.

Google's acquisition of Motorola Mobility, worth about $12.5 billion, won regulatory approval in Europe last year. But in a warning at the same time, Mr. Almunia said his decision to approve that acquisition would not exonerate any wrongdoing by Motorola in the past.

Mario Mariniello, a competition expert at Bruegel, a research organization in Brussels, said the case is a difficult one to decide. "That judgment may be very difficult," he said, "but the commission still looks like it wants to set a strong precedent in this case by punishing Motorola for making it so difficult for Apple to win a license."

He added that "for an injunction to be abusive, so much depends on a licensee, like Apple in this case, showing that it was actually willing to pay a fair price for the technology."

Mr. Almunia announced formal investigations last April against Motorola Mobility after complaints by Apple, which is concerned about access to other wireless patents for the iPhone and iPad, and by Microsoft, which is concerned about access to video and wireless patents for its products including the Xbox.

On Monday, Mr. Almunia's department said in a statement that the Motorola Mobility injunction against Apple could amount to "an abuse of a dominant position prohibited by E.U. antitrust rules." E.U. officials said they were still considering whether to act on Microsoft's complaint.

Much of the behavior under investigation in this case occurred before Google purchased Motorola Mobility, according to E.U. officials. But Google, as the parent company, may still face costs to cover any fine incurred by Motorola for any past behavior and continuing harm to Apple.

Google has already settled a similar case in the United States by agreeing to license its standard-essential patents to other companies on "fair and reasonable" terms. It also agreed not to seek court injunctions to halt the shipment of smartphones, tablets and other devices that use its standard patents.

Correction: May 6, 2013, Monday

This article has been revised to reflect the following correction: An earlier version of this article misstated the timing of the American and European approval of Google's acquisition of Motorola Mobility. It was in February 2012, not February of this year. 

interact

This article originally appeared in The New York Times.


Advertisement
Advertisement
Advertisement

You have 2 remaining free articles this month

Try unlimited digital access

If you are an existing subscriber,
link your account for free access. Start here

You’ve reached the limit of free articles this month.

To continue unlimited reading

If you are an existing subscriber,
link your account for free access. Start here