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Motorola escapes fine in EU patent abuse case

The EU today announced that Motorola abused its power in seeking patent-related injunctions against Apple in Germany, but stopped short of imposing a fine on the phone maker.

Instead, the commission said that companies like Motorola - which hold standard essential patents (SEP) - must agree to licensing deals if the opposing party is willing, rather than seeking product bans.

"These principles strike the right balance between the interests of patent holders, who should be fairly remunerated for the use of their intellectual property, and those of the implementers of standards, who should get access to the standardized technology without being 'held up' through abuses of market power," Joaquin Alumina, EU vice president for competition policy, said in a statement. "The prohibition decision against Motorola should set a precedent and provide guidance to the industry."

Standard essential patents cover technology that is necessary to run many of today's top gadgets - in this case, 3G technology. According to the EU, Motorola sought to ban Apple products using its patented 3G technology in Germany, even though Apple agreed to pay a licensing fee determined by a German court.

"However, Motorola persisted in using the threat of an injunction to force Apple into a settlement agreement with very restrictive conditions," the EU said today.

In theory, licensing deals should be struck on a fair, reasonable, and non-discriminatory (FRAND) basis, but Motorola was accused of seeking fees that licensees like Apple said were exorbitant.

The EU's formal patent abuse investigation dates back to 2012 and was prompted by complaints from Apple and Microsoft. Last year, the commission issued a preliminary ruling that found Motorola had abused its power.

Why did the EU opt not to impose a fine? "There is no Commission decisional practice or EU court case law regarding injunctions based on SEPs; and (ii) national courts within the EU have reached different conclusions on this question," the EU said today.

The EU also investigated Samsung for similar behavior, and in October, Samsung proposed a moratorium on requesting injunctions against devices that use its SEPs. Today, the EU outlined the final deal.

"Samsung commits not to seek injunctions for five years in Europe on the basis of SEPs for smartphones and tablets against any potential licensee who agrees to accept a specified licensing framework," the EU said. "This licensing framework consists of: a mandatory negotiation period of up to 12 months; and, if the negotiation fails, a determination of FRAND terms by a third party – either by a court or arbitration."