EU rules Google's Motorola abused patents in seeking injunction against Apple
In a preliminary ruling, the European Commission has determined that Google's Motorola Mobility abused its dominance in mobile patents when it sought an injunction against Apple's iPhone in Germany.
The EU's ruling made on Monday could set the stage for antitrust charges to be filed against Google, according to The New York Times. Motorola had initially sought a legal injunction against Apple's iPhone over a standard-essential patent related to GSM technology.
Motorola had initially committed the patent to be subject to Fair, Reasonable and Non-Descriminatory licensing, or FRAND. That means the company must offer a licensing agreement to competitors asking for it.
Because of that, Apple argued that Motorola's injunction efforts were illegally leveraging patents the company was obligated to license. The heated matter even prompted mobile rival Microsoft to join the fray with Apple against Motorola.
On Monday, the European Union's executive body declared Motorola's injunction was "an abuse of a dominant position prohibited by E.U. antitrust rules." Google officially acquired Motorola Mobility for $12.5 billion a year ago.
"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," Joaquin Almunia, the E.U. competition commissioner, said in a statement on the matter on Monday.
The EU's ruling made on Monday could set the stage for antitrust charges to be filed against Google, according to The New York Times. Motorola had initially sought a legal injunction against Apple's iPhone over a standard-essential patent related to GSM technology.
Motorola had initially committed the patent to be subject to Fair, Reasonable and Non-Descriminatory licensing, or FRAND. That means the company must offer a licensing agreement to competitors asking for it.
Because of that, Apple argued that Motorola's injunction efforts were illegally leveraging patents the company was obligated to license. The heated matter even prompted mobile rival Microsoft to join the fray with Apple against Motorola.
On Monday, the European Union's executive body declared Motorola's injunction was "an abuse of a dominant position prohibited by E.U. antitrust rules." Google officially acquired Motorola Mobility for $12.5 billion a year ago.
"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," Joaquin Almunia, the E.U. competition commissioner, said in a statement on the matter on Monday.
Comments
What I do hope happens is that lines are drawn on how the EU views SEP's in general, and how all the holders will be expected to proceed in the future. Just recently we've seen more injunction demands being made by Ericsson over SEP's and they're far from the only ones. Nokia's gone there before and may do so again as their money problems get worse.
"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," Joaquin Almunia, the E.U. competition commissioner, said in a statement on the matter on Monday.
Page laments the tendency among technology companies to sue each other over intellectual property. “The general trend of the industry towards being a lot more litigious somehow has been a sad thing,” he says. “There is a lot of money going to lawyers and things, instead of building great products.”
http://www.businessweek.com/articles/2012-04-04/the-education-of-googles-larry-page#p3
It is pleasing to see two people of like minds!
Quote:
Originally Posted by festerfeet
"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," Joaquin Almunia, the E.U. competition commissioner, said in a statement on the matter on Monday.
Page laments the tendency among technology companies to sue each other over intellectual property. “The general trend of the industry towards being a lot more litigious somehow has been a sad thing,” he says. “There is a lot of money going to lawyers and things, instead of building great products.”
http://www.businessweek.com/articles/2012-04-04/the-education-of-googles-larry-page#p3
It is pleasing to see two people of like minds!
It is indeed, the irony.
And remember - Do NOt Be Evil.
Nonetheless, It is humans that run companies.
It would be even nicer to see two actions of like minds -- i.e., for Google to agree with the EU and stop this nonsense once and for all.
So your view is that there should be no IP and companies should be able to freely copy, clone and replicate the designs of other companies without limit?
It is easy and "noble" to declare "to much is being spent on litigation and more should be going to innovation" but it is short-sighted and naive. The only way a company will invest the 10's of millions or 100's if millions in developing new products is there is some assurance others won't ape their designs once they are successful. There needs to be a happy middle ground somewhere and I don't know where it is or how to find it. I do know this:
Google is on one end that believes "All your data are belong to us" and has less respect for IP than any other company in the tech industry.
Apple is on the other end that believes every minor uniqueness they create is special and no one should be able to "copy" it in any form.
Somewhere in the middle is a more realistic reality.
Quote:
Originally Posted by AppleInsider
In a preliminary ruling, the European Commission has determined that Google's Motorola Mobility abused its dominance in mobile patents when it sought an injunction against Apple's iPhone in Germany.
Correct, for this particular situation. It was not about all injunctions.
Quote:
Because of [FRAND], Apple argued that Motorola's injunction efforts were illegally leveraging patents the company was obligated to license.
Not quite correct, because it leaves out the most important criteria. The key here was Apple's being able to prove their claim that they were willing to negotiate. Among other things, Motorola had claimed that Apple's attempts to prove that the patents were invalid, amounted to being unwilling.
The Commission has always said that injunctions were available to FRAND patent holders if a licensee refused to negotiate. In this current preliminary finding, the Commission reiterated this position:
Quote:
"Today's Statement of Objections sets out the Commission's preliminary view that under the specific circumstances of this case - a previous commitment to license SEPs on FRAND terms and the agreement of Apple to accept a binding determination of the terms of a FRAND licence for SEPs by a third party - recourse to injunctions harms competition. The Commission is concerned that the threat of injunctions can distort licensing negotiations and lead to licensing terms that the licensee of the SEP would not have accepted absent this threat. This would lead to less consumer choice.
"The preliminary view expressed in today's Statement of Objections does not question the availability of injunctive relief for SEP holders outside the specific circumstances present in this case, for example in the case of unwilling licensees."
- EU Commission (Full Memo Here - kd)
Quote:
Originally Posted by Steven N.
So your view is that there should be no IP and companies should be able to freely copy, clone and replicate the designs of other companies without limit?
It is easy and "noble" to declare "to much is being spent on litigation and more should be going to innovation" but it is short-sighted and naive. The only way a company will invest the 10's of millions or 100's if millions in developing new products is there is some assurance others won't ape their designs once they are successful. There needs to be a happy middle ground somewhere and I don't know where it is or how to find it. I do know this:
Google is on one end that believes "All your data are belong to us" and has less respect for IP than any other company in the tech industry.
Apple is on the other end that believes every minor uniqueness they create is special and no one should be able to "copy" it in any form.
Somewhere in the middle is a more realistic reality.
Steven, please don't tell me what my view is or presume to pretend you know what it is when you have completely misunderstood my comment.
Obviously it wasn't beyond the wit of man to see I was being facetious as all the other commentators got it. It was on the other hand beyond your's
Motorola's legal advisors: What were they thinking!
Or if the advice came from Google's legal advisors: What the F@CK were they thinking!!!
Of course, Google's just cleaning up the mess that Motorola started. Is that why they bought them over for $12.5b? Or was it to add weight to their lawsuits?
http://www.theverge.com/2013/4/26/4271432/does-anyone-know-why-google-bought-motorola
But who determines fair licensing terms? What if the FRAND patent holders demand $30/device? Every vendor would not agree to that. They could then claim the vendors are refusing to negotiate.
Quote:
Originally Posted by GTR
Now, a question's gotta be asked over the initiation of this in the first place:
Motorola's legal advisors: What were they thinking!
They were going partly by what various EU judges had ruled.
For example, a German judge recently ruled that FRAND only meant the patent holder must offer the patent, and did not otherwise remove any patent holder rights such as injunctions.
The UK High Court likewise had said that injunctions were valid, but that they preferred the parties to negotiate instead. (A position that some US judges had taken as well.)
The ETSI FRAND agreement itself makes no mention of injunctions, pro or con.
(A lot of observers thought the EU Commission would never get around to actually ruling, due to its overall lethargy and perceived weakness. Of course, this is still just a preliminary ruling, subject to change. It's more about the Commission stretching its power across the EU, more than anything else.
A similar thing is happening in the US, where the ITC has repeatedly maintained that injunctions are always a valid relief, even though the DOJ says otherwise. Like the EUC, the ITC is trying to preserve their power.)
Quote:
Originally Posted by Gatorguy
I'm not terribly surprised. Mr Almunia has been flexing his muscles the past few months against all the big techs from Apple to Microsoft and Samsung to Google. Like with Motorola's mobile products there's going to be some "flushing" and re-direction that needs to be done. At least Google hasn't started anything new since taking over and the old Moto-filed lawsuits are slowly being dealt with. That's a relief.
If Google was so noble it would have had Motorola stop the lawsuits instead of letting them continue.
Quote:
Originally Posted by jungmark
But who determines fair licensing terms? What if the FRAND patent holders demand $30/device? Every vendor would not agree to that. They could then claim the vendors are refusing to negotiate.
I suppose in this case, it's the EU who has the legally sanctioned right to determine what is fair. They might be guided by 'What are the licensing terms like for other FRAND patent licensees?' This is not as tricky and complicated a question as you seem to imply.
There goes $12.5 billion down the drain. Oops. The lawyer who told Google top brass "Yes! We can do this-- use Moto's FRAND patents as a weapon against our competitors by demanding unprecedented and ridiculously high royalties then arguing they refused to negotiate in good faith" deserves to lose his or her job.
Quote:
Originally Posted by jungmark
But who determines fair licensing terms? What if the FRAND patent holders demand $30/device? Every vendor would not agree to that. They could then claim the vendors are refusing to negotiate.
The rate is whatever the SEP holder can get. It's obviously necessary to recoup their R&D costs and to make some profit, while at the same time avoiding being so high that the Standards group gets together and finds an alternative method.
Note that "fair" does not mean everyone gets the same terms. License quantity, contract length, credit worthiness, past deals, and patent sharing, all figure into the rate.
For example, if you go by just the starting published negotiation rate, a full ETSI patent license could be up to 30% of the price of the phone. In real life, it's lower due to deals. Nokia is famously said to only pay 3% per device, due to its extensive cross-licensing.
Some judges have also determined that attempts to invalidate the patent can also raise the rate. Note that the EUC has the opposite opinion on that.
Notably, ETSI does not set rates. However, they provide a committee to help negotiate them. (Apple has gotten dinged by judges for not making use of that option, instead of going straight to court.)
To answer your question, courts can set a rate, but they usually prefer not to get that deeply involved. Nor do most companies want the government to decide that. Remember last year when that judge offered to figure out FRAND rates for Apple to pay Motorola? Apple refused unless the rate ended up less than $1 per unit, so the judge threw out Apple's case with prejudice.
In the US, the DOJ has set out new SEP parameters wherein, IIRC, after about six months of failed negotiations, both sides will have no choice but to enter into binding arbitration from a third party set up by a judge. This should alleviate court cases and speed up resolutions. Hopefully.
Edit: I didn't answer the part about refusal to negotiate. In general, as long as the licensee had made rate offers, it's okay. Motorola claimed that Apple was not in serious negotiations in part because it was also trying to invalidate the patents and pay nothing at all.
Quote:
Originally Posted by festerfeet
Steven, please don't tell me what my view is or presume to pretend you know what it is when you have completely misunderstood my comment.
Obviously it wasn't beyond the wit of man to see I was being facetious as all the other commentators got it. It was on the other hand beyond your's
I never once said what you believed. In fact, had you read what I wrote, you would have seen I specifically ASKED what your view was and did TELL you what your view was. Do not presume to know what I thought I wrote when you obviously had no clue.