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Motorola Suffers Losses|in EU & Federal Circuit

(CN) - Motorola broke EU competition rules by seeking and enforcing a sales ban against Apple over standard essential patents in Germany, the European Commission said Tuesday.

While injunctions are normally a legitimate remedy for patent infringement, Motorola has committed to licensing these most basic of patents, known as standard essential patents, or SEPs, on fair, reasonable and nondiscriminatory terms, regulators said.

"The so-called smartphone patent wars should not occur at the expense of consumers," commission vice president for competition Joaquin Almunia said in a statement. "This is why all industry players must comply with the competition rules. Our decision on Motorola provides legal clarity on the circumstances in which injunctions to enforce SEPs can be anticompetitive. This will also contribute to ensuring the proper functioning of standard-setting in Europe. While patent holders should be fairly remunerated for the use of their intellectual property, implementers of such standards should also get access to standardized technology on fair, reasonable and non-discriminatory terms. It is by preserving this balance that consumers will continue to have access to a wide choice of interoperable products."

Motorola must immediately drop its injunction against Apple and "eliminate the negative effects resulting from it," according to the commission.

Since no EU court has ever definitively tackled SEP-based injunctions, however, and national courts have issued wildly divergent opinions on the issue, the commission declined to impose a fine.

The decision comes days after the Federal Circuit in Washington ruled against Motorola with regard to now-ubiquitous touch screens on smartphones and tablets.

Apple and Google-owned Motorola Mobility sued each other for patent infringement in 2010, but both suits fell apart before trial after the Northern District of Illinois found that neither Apple nor Motorola could prove their sales had suffered because of the copying.

Granting a sales ban would hurt consumers more than either company, according to the ruling from Judge Richard Posner, who normally sits in the 7th Circuit.

Apple and Motorola went on to duke it out before the U.S. International Trade Commission and in Europe. And while Motorola successfully got Apple products off German shelves - for which it now faces reprisal - Apple has been largely successful with the ITC and the Federal Circuit in its skirmishes with Motorola.

On Friday, a three-judge panel with the Federal Circuit weighed in on the dismissal, finding that Poser had improperly sidelined testimony from the companies' damages experts. The panel also found that Posner had defined Apple's '949 patent - which covers the swipe, double-tap and pinch finger movements across a touch screen - too narrowly.

"The claims at issue differ from those that simply recite a generic means or mechanism, without further description in the remaining claim language or the specification," Judge Jimmie Reyna wrote for the court. "Instead, the claim language and specification outline the rules that the heuristics follow, based upon the initial angle of a finger contact, the number of fingers making contact, the direction of movement of a finger contact, a specific swiping gesture, tapping a certain location on the screen, or the angle of movement of a finger on the screen. Thus, the '949 patent recites a claim term with a known meaning and also describes its operation, including its input, output and how its output may be achieved."

Posner also should have allowed Apple's damages expert to testify as to the '949 patent, according to the ruling.

"The District Court erred by not considering the full scope of the asserted claims, questioning the conclusions of Apple's expert, and substituting its own opinion rather than focusing on the reliability of the principles and methods used or the sufficiency of the facts and data relied upon," Reyna wrote, adding that Apple's expert used "reliable principles and methods" that deserved a full examination.

Posner also incorrectly decided that Motorola was not entitled to damages for Apple's infringement of one of its patents, according to the ruling. But while Motorola cannot seek an injunction against Apple, since its patent is basic and licensed already, the court found that Posner should reconsider whether the reversals entitle Apple to an injunction.

"Infringement of multiple patents by a single device may strengthen a patentee's argument for an injunction by supporting its argument that the infringed features drive consumer demand or are causing irreparable harm," Reyna wrote. "By the same token, we also consider the impact on the general public of an injunction on a product with many noninfringing features."

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