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  (Source: PressWire)
The next step in this process is typically a billion dollar fine

It has been a pretty bad week for new Google Inc. (GOOGsubsidiary and top Android phonemaker Motorola Mobility.  On Monday it learned that a senior U.S. Circuit Court of Appeals judge had ruled that Apple essentially has an exclusive patent on any functional mobile touch device (any device with error checking or "heuristics", as Apple calls it) until 2028.  The ruling clears the way for Apple to potentially ban all Motorola U.S. handset sales.

Now to add insult to injury, the European Union has announced that it is opening proceedings against Motorola for FRAND patent abuse, following an initial probe phase. Past proceedings against Microsoft Corp. (MSFT) and Intel Corp. (INTC) have resulted in billion dollar fines.

The EU writes:

Following complaints by Apple and Microsoft, the Commission will investigate, in particular, whether by seeking and enforcing injunctions against Apple's and Microsoft's flagship products such as iPhone, iPad, Windows and Xbox on the basis of patents it had declared essential to produce standard-compliant products, Motorola has failed to honour its irrevocable commitments made to standard setting organisations. In these commitments, Motorola engaged to license those standard-essential patents on fair, reasonable and non-discriminatory (FRAND) terms. The Commission will examine whether Motorola's behaviour amounts to an abuse of a dominant market position prohibited by Article 102 of the Treaty on the Functioning of the EU (TFEU).

Motorola is between a rock and a hard place here.  On the one hand some nations -- including the U.S. -- are about ready to ban its handsets thanks to very vague and broad interface patents granted to Apple.  On the other hand, Motorola's patent library is largely tied up in mobile standards -- patents that have mandatory licensing under the "fair, reasonable, and non-discriminatory" (FRAND).

Motorola hq
It's been a very bad week for Android phonemaker Motorola. [Image Source: Jack Agency]

Motorola gambled and sued Apple using its FRAND IP anyways; Samsung Electronics Comp., Ltd. (KS:005930) -- another top Android phonemaker -- made a similar move.  While one might think these suits to be reasonable, on the premise that that it's impossible to have "fair" and "reasonable" licensing with a company that's trying to remove you from the market with punitive patent litigation, the EU court system does not see it that way.

Both Microsoft (also sued by Motorola Mobility) and Apple filed EU complaints against Motorola over alleged FRAND abuse.  Microsoft's attorneys accused Motorola of asking for 1,125 times the industry standard for its video codec patents.

Apple alone filed a similar allegation against Samsung (Samsung agreed to license Microsoft's patents).  The EU has not announced yet whether it will open formal proceedings against Samsung.

But to all appearances the worst-case scenario just became a whole lot worse for Android.  While it still has legal options to avoid such a doomsday scenario, the worst case is it could see itself banned from sale in the U.S., while two of the top Android phonemakers are forced by the EU to pay billion dollar fines.

This is a very wild and chaotic time in the market (and intellectual property).  It should be interesting, if a bit disturbing, to see how this all plays out.

Source: EU [press release]



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You forgot to talk about Microsoft
By MrAwax on 4/3/2012 9:51:22 AM , Rating: 2
You framed this story as "evil Apple vs poor Motorola".
However, EU antitrust investigation was triggered by MMI behavior agains Apple (for 3G patents) AND Microsoft (for H.264 patents).

So Motorola isn't the nice poor little guy you drafted in your story. And while Motorola is "free" to return to non-touch screen smartphones as they were before the iPhone, Apple and Microsoft can NOT work around 3G/H264 essential patents.

So if Apple is abusive with its too broad patent, it can/should be invalidated. While Motorola abusive behavior for FRAND licences commitments can be controled by antitrust organizations.




RE: You forgot to talk about Microsoft
By JasonMick (blog) on 4/3/2012 10:11:27 AM , Rating: 3
quote:
You framed this story as "evil Apple vs poor Motorola".
However, EU antitrust investigation was triggered by MMI behavior agains Apple (for 3G patents) AND Microsoft (for H.264 patents).

Err no, I specifically mention Microsoft's role and its claims...
quote:
Both Microsoft (also sued by Motorola Mobility) and Apple filed EU complaints against Motorola over alleged FRAND abuse. Microsoft's attorneys accused Motorola of asking for 1,125 times the industry standard for its video codec patents.

Apple alone filed a similar allegation against Samsung (Samsung agreed to license Microsoft's patents). The EU has not announced yet whether it will open formal proceedings against Samsung.

The point is that the EU is currently also probing Samsung and is very likely to launch similar proceedings against Samsung, even though Samsung (unlike Motorola) agreed to license from Microsoft.

And you wholly misunderstand my general sentiments on the issue. My point was never to say it was right for Samsung or Google to sue using FRAND. My point is merely that I see where they're coming from.

It's like I don't believe in murder, but I can UNDERSTAND why someone whose child is raped by a pervert might kill that person out of vengeance. As the Count of Monte Cristo showed us, you can be doing the wrong thing, yet justified (somewhat) in your vengeful behavior at the same time. There's both wrong and right to such actions. I hope I don't need to spell out the moral intracies for you.

Ultimately the situation as it stands is this. Apple is the clearest evil in terms of consumer interests as it seeks to ban any competitor who cannot out-duel it in court. Apple claims to have offered licensing, but its purposefully vague about exactly what it offered and has made no follow up offers to the public's knowledge.

Microsoft, Samsung, and Motorola's actions all fall into a more gray area of quasi-evil.

Is it wrong for Microsoft to charge exploitive licensing fees of $10-15 on Android handsets? Sure. But at least it's not looking to completely destroy the market and harm consumers with a ban. The issue is the patent system. Microsoft, like any good capitalist company is just looking to milk the rules to its maximum financial advantage.

Likewise is it wrong for Motorola or Samsung to ask $15, $20 per device in licensing fees for FRAND patents? Absolutely. But when the system tells you that a collection of FRAND patents is worth $0.02 and a collection of non-FRAND patents is worth $10-$15 (in the case of coerced licensing) or effectively $200+ (in the case of a ban), it creates a tough situation for anyone who played nice and focused their time on FRAND-covered areas.

I expect the idealism to wear off quickly and for FRAND/standards development to be abandoned, should this situation wear on.

The overarching problem is the EU and U.S. patent systems AND justice system w.r.t. enforcement are broken in that they allow overly vague software patents, and don't reward true invention/innovation to the degree they should. Also, the notion that the patent system supports government-enforced monopolies is inherently anti-competitively. While I agree having patent protections in place is better than a purely laissez-faire system a la Adam Smith's capitalism, I believe that licensing -- in the spirit of competition -- should be mandatory (as with FRAND), fair, and consistent.


RE: You forgot to talk about Microsoft
By Tony Swash on 4/3/12, Rating: -1
RE: You forgot to talk about Microsoft
By fredgiblet on 4/3/2012 4:28:07 PM , Rating: 3
So trying to scare off the richest company in the world is going to harm the market more than try to completely destroy competition?

You are delusional.


RE: You forgot to talk about Microsoft
By Pirks on 4/3/2012 4:40:41 PM , Rating: 2
It's you who are delusional, not Tony. If Apple were really destroying competition, they'd attack MS and Windows Phone as well, but they did not. So stop lying.


By sprockkets on 4/3/2012 8:36:02 PM , Rating: 2
We'll see how that plays out if WP7/8 gains any significant market share. They never sued palm and of course had no need to.


RE: You forgot to talk about Microsoft
By whoisnader on 4/3/2012 7:53:30 PM , Rating: 2
Jason;

Although Apple's practice of litigate to obliterate is well understood; you do come across 'willing to turn a blind eye' to what Motorola is doing because it is Microsoft and especially Apple, who are complaining. FRAND is FRAND, you can't do what Motorola is doing and think that there would be no repercussions.

What is happening now to Motorola is their own doing with regards to this particular complaint.


By Reclaimer77 on 4/3/2012 9:18:01 PM , Rating: 1
quote:
Although Apple's practice of litigate to obliterate is well understood; you do come across 'willing to turn a blind eye' to what Motorola is doing because it is Microsoft and especially Apple, who are complaining.


So am I. The ends justify the means. Apple is behaving in a truly menacing fashion and must be stopped. Whatever the costs or consequences, they cannot be worst than a world where Apple has a monopoly on mobile devices.

As someone who owns a Samsung phone running Android, Apple DIRECTLY seeks to ruin my user experience and take away my right to choose which platform is best for me. This I cannot abide. FRAND SHMAND. I ask you which has the potential to do more harm to us? Apple, clearly.

I'm sure if you labored and spent millions developing a concrete and specific technology patent and were told it was only worth pennies on the dollar, while someone who came up with rounded corners makes 40 times more in licensing fees, you would feel the same way too.

That's where I stand. And I don't give a damn what FOSS patents or anyone else has to say about it.


By Calin on 4/4/2012 4:24:55 AM , Rating: 2
Apple is "free" to return to iPods.


"You can bet that Sony built a long-term business plan about being successful in Japan and that business plan is crumbling." -- Peter Moore, 24 hours before his Microsoft resignation














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