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It’s no surprise that the European Commission has today issued a preliminary opinion that in seeking and enforcing an injunction “against Apple in Germany on the basis of its mobile phone standard-essential patents ("SEPs")” Motorola Mobility was potentially abusing a dominant position. Whatever it says, the Commission’s competition regulator has shown time and again that it has a deep distrust of patents and will always look for ways in which their power can be restricted.
In a pithy sound-bite in which he comments on this case, Joaquin Almunia, the man who runs DG Competition, summed up the position quite nicely: “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.” He and his team get to decide what misuse amounts to, and it is pretty clear that they have a much greater problem with patent owners seeking to enforce their rights than they do with infringers appropriating them in the first place.
It takes two to tango. The Commission states that it believes Apple was a willing licensee of Moto’s patents; Moto disagreed, with a spokesperson today pointing out that “Apple had to make six offers before the court recognized them as a willing licensee”. Importantly, let’s remember, this case was not driven by Google; instead, it is based primarily on events which transpired before its acquisition of Motorola back in 2011.
A memo that the Commission has also put out today which contains Q&As relating to the case states:
In industries such as the IT sector, industry standards are key to ensuring interoperability and fostering innovation. They bring benefits to consumers and businesses. However, once a technology has been chosen and the standard has been set, it is important that the standard is accessible to all interested parties.
And so say all of us. But with competition and antitrust authorities on both sides of the Atlantic looking ever more closely at SEPs, FRAND, RAND and injunctions, you have to wonder whether a growing number of companies might decide to swerve getting involved with standard-setting. Instead, they may opt to leave the difficult, time-consuming leg work to others, keep their own patents to themselves so that they can enforce them on their terms, while taking what they need from those who are committed to standards in the knowledge that the worst that can happen is that they will have to agree a FRAND-based royalty payment. There’s no downside except the loss of SEP licensing revenues. But how much are they worth in the great scheme of things? If enough companies decide that the answer is “not very much when set against the strategic flexibility you lose”, then the interoperability, innovation and consumer choice the Commission believes in will be put at substantial risk.
Competition/antitrust, Licensing, IP litigation, Patents, IP business
This is what we should expect when an economist and a socialist is put in charge of competition policy. DG Competition's traditional, deep suspicion of IP rights is reinforced. Why don't the other DGs that are supposed to be supporting innovation fight back more against DG Competition? The answer is probably: because DG Competition is all-powerful within the Commission. And why is it all-powerful? Probably because it has got itself to the heart of the EU narrative, through its role in breaking down national barriers in favour of the single market.Mark Anderson, Anderson Law LLP on 06 May 2013 @ 17:52
It is hard to see why Motorola's conduct is anticompetitive. Injunctions are normally discretionary and permanent injunctions generally take into account the public interest and are hard to get. So how can merely seeking an injunction be anticompetitive? (see e.g. the eBay case in the US where this principle applied even for a non-SEP patent).
The problem, if anything, is with the rules that permit a court to grant an injunction where an infringer is willing to take a FRAND licence and how that offer is viewed by the court when considering remedies. It seems that a lot more good would be done if the Commission changed or clarified the rules in this regard and created more legal certainty for all SEP owners rather than attacking a single patent owner on dubious competition grounds.Fred Logue, New Morning IP on 07 May 2013 @ 07:08
"...to the detriment of innovation and consumer choice."
Really? Where is the evidence that innovation has been adversely affected, or consumer choice reduced? In the smartphone market, of all places! Most of us are frankly bemused by the array of products and features available to us. A little *less* choice might be no bad thing, sometimes.
These decisions are clearly driven by ideology, rather than evidence. Well done, Europe!Mark Summerfield, Watermark on 07 May 2013 @ 14:04
Not surprising to see that DG Competition encourages theft: it is consistent with their role in encouraging a free market...Stephen Potter, Iprova Sàrl on 08 May 2013 @ 15:23