Patent News | Europe Opens Patent Investigations Into Motorola Mobility

By: James Kanter

source: http://www.nytimes.com

category: Patent News

The European Union’s competition office on Tuesday opened two antitrust cases against Motorola Mobility for possibly abusing its patents following complaints by two rivals, Microsoft and Apple.

The cases are the latest stage in what has become a full-blown battle over the ownership of essential technologies that help power mobile and gaming devices, a fight that has engulfed Google and virtually all the other major players in the industry.The European Commission opened two cases to look at separate allegations by Microsoft, which is concerned about access to video and wireless patents for its products including the Xbox, and by Apple, which is concerned about access to other wireless patents for the iPhone and iPad.Microsoft and Apple complained to the commission that they were victims of unfair licensing conditions and abusive litigation by Motorola Mobility.The investigation will look at whether “Motorola has failed to honor its irrevocable commitments made to standard-setting organizations” to license its technologies to other companies on fair, reasonable and nondiscriminatory terms, the commission said.Motorola Mobility said in a statement it was “confident that a thorough investigation” would show it had honored its “obligations and complied with antitrust laws.” It said it would “continue to work closely with the European Commission to resolve this matter as soon as practicable.”The cases could also have consequences for Google, which is seeking final regulatory approvals for its purchase of Motorola Mobility to compete directly with its archrival, Apple. Google’s deal, worth about $12.5 billion, cleared its biggest hurdles by winning regulatory approval in the United States and Europe in February.In a warning in February, Joaquín Almunia, the E.U. competition commissioner, said his decision to clear Google’s deal for Motorola Mobility would not exonerate any wrongdoing concerning patents “by Motorola in the past or all future action by Google.”News of the investigations came a day after Microsoft said it was moving its software distribution operations to the Netherlands from Germany because of concerns that an adverse decision in a patent dispute with Motorola Mobility could hamper crossborder shipments.Motorola filed a lawsuit against Microsoft in July last year asking for a royalty of 2.25 percent on the price of each product using video software on which Motorola holds some patents.Microsoft refused to pay, saying the demand by Motorola could lead other patent holders to make similar demands and make the costs of licensing technology unaffordable.Motorola then sued to stop sales and shipments in Germany of any product that uses Microsoft software with the video software.A ruling against Microsoft on April 17 by the Mannheim regional court could block the software giant from distributing Windows software and the Xbox gaming system in Germany.On Tuesday, Microsoft said there had been no previously existing royalty agreements concerning the video software before the dispute.Microsoft had a “great relationship” with its current distributor but “Motorola’s refusal to live up to its patent promises has left us no choice,” said Thomas Baumgärtner, a spokesman for Microsoft in Germany. “Unfortunately the risk of disruption from Motorola’s patent litigation is simply too high.”The commission can fine companies as much as 10 percent of their worldwide annual income if it finds them guilty of antitrust violations. But the way any such fines would be calculated would depend on which company owned Motorola Mobility at the time of the offenses. Determining which company would pay any such fines can often depend on the fine print of merger agreements. Motorola Mobility was split off from Motorola in January 2011.

The commission also has the power to require companies to change the way they do business. That, too, could have consequences for Google and its deal for Motorola Mobility.

“We haven’t finalized our acquisition of Motorola Mobility, but will work with the European Commission to answer any questions they might have,” said Al Verney, a spokesman for Google in Brussels. “We have longstanding concerns about patent abuses, including lawsuits and royalty demands targeting the Android ecosystem,” Mr. Verney added, referring to Google’s operating system for mobile devices.

But a prominent commentator on the issue, Florian Mueller, who also advises companies including Microsoft on patent issues, said in a blog entry that the decision Tuesday by Mr. Almunia to start a formal investigation into Motorola Mobility was a bad sign for Google.

“If and when Google closes the deal, it will effectively buy itself into two more E.U. antitrust investigations,” Mr. Mueller wrote.

“It’s time for some people in Mountain View to realize that a multi-front war against competition authorities, on three continents in parallel, is a war that they won’t be able to win,” he added, referring to Google’s headquarters in California.

The commission is already investigating Samsung for the way it used standard, essential patents and for the way it sought injunctions against its competitors in national courts.

Samsung, a South Korean company that relies on Android for many of its products, has been pursuing legal battles worldwide over the levels and fairness of fees it imposes on others for using patented technologies.

Travel sites vs. Google

TripAdvisor filed an antitrust complaint against Google with E.U. regulators Tuesday, adding a second case against the search-engine operator by online travel companies, Bloomberg News reported from Brussels.

TripAdvisor said the complaint addressed “anti-competitive and unfair practices by Google that harm the marketplace and consumer welfare.”

Expedia last week added its complaint to an E.U. investigation of claims that Google discriminated against other services in its search results and stopped some Web sites from accepting rival ads. Joaquín Almunia, the E.U.’s competition commissioner, has said he could decide this month whether to proceed with a case against Google.

source: http://www.nytimes.com/2012/04/04/business/global/europe-opens-patent-investigations-into-motorola-mobility.html