Motorola Mobility in double Euro probe over patent warfare
Apple, Microsoft trigger antitrust investigation
The European Commission's anti-competition division has opened two formal investigations into Motorola Mobility after complaints from Apple and Microsoft about how it uses its patents against them.
The commission said in a canned statement that it wants to figure out if Motorola Mobility has "abusively, and in contravention of commitments it gave to standard-setting organisations, used certain of its standard essential patents to distort competition in the internal market in breach of EU antitrust rules".
In particular, investigators want to assess if by trying to get injunctions against big Apple and Microsoft products like iPads and Xboxes on the basis of standards-essential patents, Motorola Mobility has gone back on its commitments to be fair, reasonable and non-discriminatory (FRAND).
"Motorola gave such FRAND commitments to the relevant standard setting organisations, when the second and third generation ("2G" and "3G") mobile and wireless telecommunications system standards, the H.264 video compression standard and the standards for wireless local area network (WLAN) technologies were adopted," the commission said.
"In order to guarantee undistorted competition and to reap the positive economic effects of standardisation it is important that FRAND commitments be fully honoured by the companies concerned."
Motorola said that it would "work closely with the EC to resolve the matter".
"MMI is confident that a thorough investigation will demonstrate that it has honoured its FRAND obligations and complied with antitrust laws," the company said in an emailed statement.
Apple and Microsoft say Motorola Mobility has only offered unfair terms in the licensing deals it is required to broker, demanding far too much cash or too many of their patents in return for its intellectual property. Motorola Mobility maintains that Apple and others were offered agreements and yet refused them, so it had no choice but to sort things out in court. The EC said it would also be looking into these allegations.
It's interesting timing for the probe since Motorola and Microsoft are awaiting the outcome of a lawsuit the smartphone-maker brought against Redmond in Germany over patents for the H.264 video codec standard.
Microsoft, fearing Motorola could win an injunction against its software, has asked a US judge to intervene because such a banning order would unfairly impinge on a separate case in a Washington court, where Microsoft is seeking a worldwide licensing deal with Motorola.
And yesterday, Microsoft admitted it is shifting its European software distribution hub out of Germany and into The Netherlands, blaming Motorola for forcing its hand.
The antitrust probe joins the EC's investigation into Samsung, launched at the end of January this year, which is looking into the same issues of standards-essential patents and FRAND obligations. ®
Re: BAD news!
Luckily, the entire world is not as completely clueless as you. Your agument is based on pure ignorance and is not worthy of further comment.
Re: Good news!
It's actually worse than that. What Moto have done is revoke the license that a chip supplier has already paid FRAND licensing on, for every chip sold to Apple. In other words, Moto have discriminated at the component supplier level, specifically to target Apple. Instead of the 2c a chip (or whatever the FRAND patent fees are for the chip manufacturer) Moto is demanding 2.5% of the retail price of an iPhone!!!
So, Apple bought fully licensed components for their products, and Moto withdrew the licence from the chip supplier for just the chips Apple use.
I cannot describe how nefarious this act is, and the courts should crucify Moto, the executives involved and their Google "masters"
Hopefully they'll sort this out quickly, motorola + samsung need a good kick in the balls over this.
And here's a quick rundown of why FRAND abuse is so bad, for everyone about to post up that apple + MS should be first in the firing line for trying things like the rounded rectangle debacle:
1. Apple + MS are both suing motorola over a bunch of patents. But *NOT* standard-essential patents (SEPs). Apple are suing over their slide-to-unlock patent for example. Moto have a few options: do a different unlock screen, use it anyway and risk a bad outcome in court, or ask politely for a license (which apple may or may not grant, on whatever terms they feel like).
2. Motorola are suing apple over SEP patents for 3G. Apple *can't* work around this, except by removing 3G (and probably 4G and 2G) from their phones, because it's part of the 3G standard and a 3G phone must implement the patent. They can license it, or they can not license it and go to court.
3. Because it's a SEP, motorola agreed to FRAND licensing. They must offer a cash-only deal, it must be fair, and it must be reasonable. Otherwise they could demand stupid amounts of cash and threaten to get rival's products banned if it's not paid, and the 3G standard would never have been workable.
4. The german courts have decided that FRAND isn't really important, and companies like motorola can ask any fee they like so long as it's not REALLY extortionate. They also decided to make the rules such that apple have to take very unreasonable steps like paying the license before they argue about it in court. It's a mess in .de to say the least, no other countries have come to this kind of legal conclusion.
5. Moto are therefore suing everyone in germany, and demanding billions in licensing. They're demanding something like 2% of the retail cost of a PC just to cover a few H264 playback patents in windows for example. If the other few hundred H264 patent holders demanded the same, H264 playback in windows would cost more than an entire PC.
Add the same for wifi and the other standards used in PCs and you're looking at a few grand in patent fees. Note that linux implements wifi too - if motorola are right, then in future linux as an OS only might cost more than a mac in 2012.
6. Naturally motorola can't actually 'win' on this. If they succeeded in germany, apple/ms/etc. would appeal to a higher court, then a higher court, .... , then the EU. They EU would put things right, many years in the future. After many years of products like windows, iPhones, xboxes etc. being banned. MS/apple/etc would lose out massively in this scenario - which gives motorola huge power over them, which they can use to demand massive payments and access to any other company's patents. This is pretty obvious market abuse, hence the EU investigation.