Motorola Draws EU Scorn for Apple Injunction

     (CN) – Motorola’s insistence on enforcing a German injunction against Apple over essential patents violates EU antitrust laws, the European Commission said.
     The regulatory action comes less than two weeks after the U.S. Trade and Patent Office dismissed the last of Motorola Mobility’s claims that Apple infringed several of its patents in the construction of the iPhone. And last week, a federal judge awarded the Google-owned Motorola a fraction of the $4 billion it demanded from Microsoft in Xbox-related royalties.
     EU commissioners said Motorola violated its commitment to Fair, Reasonably and Non-Discriminatory (FRAND) terms in seeking and enforcing an injunction in Germany for its standard essential patents. Such actions also amount to an abuse of its dominant position in the market, regulators said.
     “The protection of intellectual property is a cornerstone of innovation and growth. But so is competition,” said Commission Vice President Joaquin Almunia, who heads competition policy. “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.”
     Under its commitment to the European Telecommunications Standardization Institute (ETSI), Motorola agreed to license essential patents, known as SEPs, related to the GSM standard at FRAND rates.
     Despite that commitment, the company – which Google purchased in 2012 -sought and won an injunction against Apple over the patents in a German court.
     Motorola now wants the German court to enforce the injunction, even after Apple consented to the court’s determination of an appropriate FRAND royalty. That move could hamper competition and harm the market, the commission said.
     “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,” commissioners said in a statement. “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 commission added: “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.”
     A statement of objections from the European Commission counts as a formal step in an antitrust investigation. Motorola can now ask for a formal hearing to defend itself prior to the commission’s final decision.
     If the commission concludes Motorola broke antitrust rules, the company could face a fine of up to 10 percent of its annual worldwide revenue.

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