European Commission has raised objections for misuse of Standard-Essential Patents (SEPs) by Google’s Motorola Mobility. Its preliminary statement says that EU rules does cover Intellectual Property Rights but also stops misuse of it like Google's Motorola did against Apple's iPhone in Germany
The European Commission has made a ruling today, on Monday, against Motorola Mobility according to EU antitrust rules. Motorola had initially sought a legal injunction against Apple's iPhone over a standard-essential patent related to GSM technology.
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The Vice President and In-Charge of Competition Policy of European Commission, Joaquin Almunia, said that companies who are owners of large number of SEPs are not allowed to misuse them. It is strongly discourage as it would affect the market competition and customer trends. Joaquin said that initial remarks of commission do not judge for final decision. It will be analyzed in detail later.
SEP holders are bound to allow its use by other companies on “FRAND” basis. It means license will be shared on Fair, Reasonable and Non Discriminatory basis. EC rules stops infringement and also injection in terms customer protections and keeping competition in market.
Google acquired Motorola Mobility in February 2012 for $12.5 billion. And it resolved all major licensing and patent issues in 2012 too. Now after acquisition of Motorola and setting SEPs in its favor, Google is in position to impose certain restriction on leading companies.
In Germany, it tries to impose restriction to stop using it SEP in iPhone. The standards are an essential and part of GSM protocols. They are important to use else communications can be effected which will result in customer dissatisfaction.
Motorola Mobility agreed upon the GPRS standard’s approval in Europe that its use to other companies will be allowed on FRAND basis. EU has given injection to company against Apple Inc. And in Germany, they started to ban Apple from using protocol on the base of GPRS SEP’s sole owner. Apple even agreed to pay FRAND royalties under the German court.
The investigations are going on since April 2012 for Anti-Trust against Google. The use of SEPs is allowed under EU rules under FRAND terms. The licensing and patent cannot be used to affect market competition under Article 102 TFEU. And it is discussed in more detail in Antitrust Regulation (Council Regulation No 1/2003).
The preliminary decision is only given today. Commission will issue final orders after both companies use their right of defense. Right now, it seems that there are clear evidences of anti-trust and infringement which can result in fine of 10% annual sales.
The leading companies are in war. Microsoft seems to join fray with Apple against Google. After official acquisition of Telecom Company, Search Giant now owns largest number of SEPs for mobile and internet communication standards.