EU Says Motorola Injunction Against Apple is 'An Abuse of a Dominant Position'

The European Commission has informed Motorola Mobility that its injunction against Apple in Germany based on mobile phone standard-essential patents amounts to an abuse of a dominant position prohibited by EU antitrust rules.

The determination is a preliminary one; however, the EU found that since Apple was willing to license Motorola's patents on Fair, Reasonable and Non-Discriminatory (so-called "FRAND") terms an injunction made to distort licensing negotiations and impose unjustified licensing terms on patent licensees would ultimately harm consumers.

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The Motorola Mobility SEPs in question relate to the European Telecommunications Standardisation Institute's (ETSI) GPRS standard, part of the GSM standard, which is a key industry standard for mobile and wireless communications. When this standard was adopted in Europe, Motorola Mobility gave a commitment that it would license the patents which it had declared essential to the standard on FRAND terms. Nevertheless, Motorola Mobility sought an injunction against Apple in Germany on the basis of a GPRS SEP and, after the injunction was granted, went on to enforce it, even when Apple had declared that it would be willing to be bound by a determination of the FRAND royalties by the German court.


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. 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.
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Microsoft and Apple filed complaints against Motorola early last year for making outrageous demands for use of its FRAND patents. Recently it was reported that the company demanded 2.25% of Apple sales.

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