updated 07:40 am EDT, Mon April 2, 2012
EU says Motorola tactics vs Apple may be flawed
Motorola could be subject to the same sort of investigation of patent abuse that Samsung is facing, European Competition Commissioner Joaquin Almunia said in a speech during a stop in Washington, DC. He was "considering" an investigation in order to provide "more clarity" in the competitive space, AllThingsD heard. Companies like Motorola and Samsung could potentially misuse their ownership of standards patents by demanding high rates under the threat of a product ban, regardless of their public commitments to FRAND (fair, reasonable, and non-discriminatory) terms.
"In some cases, the holders of standard-essential patents can effectively hold up the entire industry with the threat of banning the products of competitors from the market," Almunia said. "This is unacceptable, and I am determined to use antitrust enforcement to prevent such hold-up by patent holders."
Similar to Samsung, Motorola has almost exclusively been using standards-based patents in countersuits rather than more unique creations. Against Apple, it has been using elements of 3G standards to the point where Apple has sued it to prevent more lawsuits over what it believes is an already paid license through Qualcomm. Microsoft, meanwhile, has been targeted over H.264 video standards in the Xbox 360 and other important parts of its business.
Some of the complaints have stemmed from Motorola's absolutist approach to patent licensing. It demands 2.25 percent of the total device price, regardless of how disproportionate the cost is to other associated patents. While playing up its position for maximum effect, Microsoft has noted that Motorola is asking 100 to 1,000 times more for just its patents than 29 other companies combined.
The heavy dependencies of Motorola and Samsung on standards patents for defense has increasingly been seen as a major risk. If shot down by the EU, the two would have little actual defense against Apple or Microsoft and might have little choice but to reach a settlement. At least Apple has pledged never to sue over standards patents and, even through a partial court win, could do more serious damage.
For Google, the deal could lead to its acquisition of Motorola becoming a costly mistake. Despite itself complaining about patent abuse, it has so far been content with Motorola's tactics. The $12.5 billion deal won't deprive Google of all resources, but without standards-based lawsuits, might limit it to far more selective lawsuits or to pure defense.