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Tuesday, April 3, 2012

Europe Opens Patent Investigations Into Motorola Mobility - New York Times

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Europe Opens Patent Investigations Into Motorola Mobility - New York Times
Apr 3rd 2012, 12:13

BRUSSELS — The European Union's competition office on Tuesday opened two antitrust cases against Motorola Mobility for possible patent abuses following complaints by two rivals, Microsoft and Apple.

The cases mark 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 other major players in the industry.

The European Commission opened two cases in order 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 separate wireless patents for the iPhone and iPad.

Both 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 non-discriminatory terms, the commission said.

The cases could have consequences for Google, which is seeking final regulatory approvals for its purchase of Motorola Mobility to compete directly with its new archrival, Apple. Google's deal, worth about $12.5 billion, cleared the biggest hurdles in the United States and the Union in February.

In a warning in February, Joaquín Almunia, the E.U. competition commissioner, said that 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."

The commission can fine companies up to 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 Inc. 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 posting 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 wrote, 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 heavily on Android for many of its products — has been pursuing legal battles worldwide over the levels and fairness of fees it imposes on other companies for using patented technologies.

A version of this article appeared in print on April 4, 2012, in The International Herald Tribune.

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