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May 09, 2013

Google and Motorola Found Guilty of Patent Abuse by European Commission

Several weeks ago we took note of Microsoft winning a significant patent lawsuit against Google - one in which Google had sought billions of dollars in licensing fees for patents held by Motorola Mobility. We've always been on Microsoft's side in this particular patent lawsuit. Further, we've long considered Google's belief that Motorola Mobility's patent portfolio is worth multiple billions of dollars to be misguided, and Microsoft's patent win underscores this. In this case the suit rested on what are known as Fair, Reasonable, and Non-Discriminatory (FRAND) patents and "standards-essential" patents (SEP).

Our article on Microsoft trumping Motorola on this FRAND and SEP patent issue also noted a rather long list of Google patent losses of late. Little did we know that just a short week later Google and Motorola would add to this rather significant losing streak. This past Monday, following about a year of inquiry, the European Commission (EC) sent what is known as a Statement of Objections (SO - which is a preliminary antitrust ruling) to Motorola Mobility. The SO essentially finds Moto guilty of SEP and FRAND patent abuse, and is in response to a complaint that Apple filed back in February 2012.

The very same EC also happens to be investigating the very same Microsoft complaint relating to Motorola Mobility's pursuit of injunctive relief over H.264 video codec SEPs that Microsoft won in Washington state, which we noted above (refer to the referenced article for additional details). Given the Washington state victory and the EC's finding this week regarding the Apple complaint, we seriously doubt that Microsoft won't also see an SO sent Motorola's way in this case.

Apple's original complaint was filed in response to the Mannheim Regional Court in Germany granting Motorola a cellular SEP injunction in December 2011 that Motorola managed to enforce for a short period that resulted in Apple having to Apple to remove certain products from its German online store.

We do need to note that the EC decision that was handed down on Monday is preliminary and subject to a final ruling. Google is entitled to provide a defense for its (and Motorola's) actions, though given the current thinking by the EC we doubt that the final ruling that will be issued following Google's defense turn will be any different than the preliminary ruling.

There are in fact some very interesting patent issues that are involved in this particular case (they are also related to an EC grant of an SO against Samsung that Apple also was able to obtain). The EC's preliminary decision hinges on Apple's willingness to enter into a FRAND license, which it was clearly willing to do. This line of thinking also includes the viewpoint that because a potential licensee may challenge the validity, essentiality or infringement of a SEP or FRAND patent does not automatically indicate an unwillingness to enter into a licensing agreement.

Of such twists and turns of legal jargon does a patent suit often hinge upon. The interesting thing to us is that the entire affair continues to underscore that Motorola's patent portfolio Google has placed so much value on - from both a dollar and strategic/tactical perspective - is hardly worth the $12 billion or so the company shelled out to buy it and Motorola. All of the major players in this space - from Nokia to BlackBerry to Samsung to HTC to Microsoft and finally to Apple (and every other vendor in between) needs to return to original innovation and needs to stop playing patent troll. We certainly note that there are legitimate patent issues that arise - we continue to believe that Apple had numerous valid patent points in its original suits against Samsung. Since then, the entire mobile patent world has spiraled out of control and needs to regain its sanity.

As is almost always the case for those interested, Florian Mueller's Foss Patents website provides deeply detailed analysis of the above issue, as well as how other patent issues relate to it.

Edited by Alisen Downey

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