EC takes tough stance on Motorola/Apple patent case

EC takes tough stance on Motorola/Apple patent case

07 MAY 2013

The European Commission warned Motorola Mobility that an action being taken against Apple in Germany “amounts to an abuse of dominant position prohibited by EU antitrust rules”, following a preliminary investigation into the case.

As with many patent suits before, the issue centres on the licensing of “standard essential patents (SEP)”, and the licensing of these on “fair, reasonable and non-discriminatory terms (FRAND)”.

Google-owned Motorola Mobility sought an injunction against Apple based on SEP licensing, a path that the EC has now said “may be abusive where… the potential licensee is willing to enter into a licence on FRAND terms”.

“In such a situation, the Commission considers at this stage that dominant SEP holders should not have recourse to injunctions, which generally involve a prohibition to sell the product infringing the patent, in order to distort licensing negotiations and impose unjustified licensing terms on patent licensees,” the regulator said.

In a statement, Joaquin Almunia, the EC’s VP in charge of competition policy, said: “The protection of intellectual property is a cornerstone of innovation and growth. But so is competition. 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 patents in question form part of the GPRS standard, which Motorola had previously declared would be made available on FRAND terms. The recovering device maker then sought an injunction against the smartphone company, and when it was granted went on to enforce it, even though Apple had declared it would be willing to be bound by the determination made by the German court.

Motorola’s use of its patent portfolio has come under especially close scrutiny following its acquisition by Google, the company behind the dominant Android smartphone platform. Of specific concern is that the acquired intellectual property would be used as the basis for attacks on vendors beyond the Android ecosystem – of which Apple is the most successful.

Earlier this year, Google had a run-in with the US Federal Trade Commission over the issue of SEPs, resulting in the creation of a “strong and enforceable set of agreements” covering FRAND licensing.

The European Commission said it had opened two investigations last year, having received complaints from Apple and Microsoft.

Motorola is not the only company the EC has in its sights in this regard: early last year, it said it was looking whether Samsung had acted to “distort competition in European mobile device markets” with its licensing of SEP patents.

The EC said its statement does not question the availability of injunctions in all SEP disputes, noting that there are circumstances where this may be an option – for example in the case of “unwilling licensees”.

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Steve Costello

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