Patent Aggressor Microsoft Files EU Complaint Against Google/Motorola For Charging Too Much To License Patents

from the live-by-the-sword dept

It's difficult not to look cynically at Microsoft's latest move to file an antitrust complaint in the EU over Motorola's patent royalty rates, and think about just how obnoxiously hypocritical Microsoft is being as a company on this particular issue. First off, Microsoft has become a pretty significant patent aggressor over the past few years, filing lawsuits and pressuring companies to pay up. It's also been a huge fan of patent FUD -- especially against open source competitors. Most people assume that Microsoft was the main player behind SCO's quixotic (but costly and distracting) legal battle against Linux. Then, of course, every so often Microsoft officials insist that Linux infringes on a bunch of its patents, but it never wants to make clear which ones. More recently, of course, Microsoft has been demanding license fees for its patents from a variety of companies making use of Android -- to the point that some have argued Microsoft makes more off each Android installation than each Microsoft Phone installation.

Of course it was partly Microsoft's aggressive patent position against Android that put Google in the position of feeling compelled to buy Motorola Mobility to get its patent portfolio, mainly for the sake of protecting itself and having a bunch of patents that it could use as a shield against a lawsuit from the likes of Microsoft. Of course, Microsoft was already suing Motorola over the company's use of Android.

A few weeks ago, we discussed the tough spot that Google was in over Motorola's patents. The company has indicated that would keep in place Motorola's current patent licensing strategy. While many of us would prefer that Google make a big statement by freeing or opening up many of these patents, the company is actually in something of a ridiculous position: if it does that... its competitors (mainly Microsoft) will claim anti-trust violations by saying that the company is using its market position to undercut the prices that other charge.

It's other choice? Keep the current rates. And that's what it's indicated it would do... so the second that the EU and the US approved the merger, Microsoft files this antitrust complaint, arguing that the rates Motorola charges for its patents is too high. It's a damned if you do, damned if you don't position for Google. Keep the rates as they are, and they're violating antitrust rules by charging too much. Cut the prices or free up some of the patents, and it's an antitrust issue for leveraging their position and "dumping" in the market.

Of course, Microsoft's almost gleeful blog post about its complaint ignores all of this reality and history, and tries to position it as if Motorola and Google are trying to "kill" web and mobile video by charging too high a royalty rate. Frankly, for anyone who knows anything about Microsoft's patent practices over the past few years, they'll see through this and recognize how laughable Microsoft's claims are.

Either way, the situation is ridiculous. Fighting over patents doesn't help bring any new innovations to market. It just diverts money to the lawyers.

Filed Under: android, antitrust, eu, frand, patents, smartphones
Companies: google, microsoft, motorola

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  1. icon
    Walt French (profile), 27 Feb 2012 @ 5:32am

    Name-Calling is OK for schoolchildren who don't know better

    …but it won't help you or your readers understand how these cases will work thru courts.

    Yes, Microsoft has been aggressive in insisting that others license its patents. But you don't have to ignore the fact that the whole mobile industry has been rife with this behavior since long before Microsoft was a player.

    Look to the citations that Motorola blocked Japanese rivals in the 1990's by refusing to license GSM patents. This appears to me the first realization that if a standard was going to be successful, the authors of its patents would have to declare them essential in the open, and guarantee that they would be fairly licensed. They have played hardball since their first involvement in standards, but the societal standards have changed.

    Motorola knows the obligations it made to the UN's ITU and the NGO ISO/IEC's MPEG (which “own” the h.264 standard) because a Moto rep at one time chaired the committee that brought the standard together. MPEG has a clear FRAND policy (“reasonable” was not explicitly defined, but NonDiscriminatory was clearly laid out as offering it on the same terms to all) and I can't imagine any tortured reasoning reading of history under which Moto has been charging the billions of other h.264 applications 2.X% . Nor can Motorola's targeting of a single rival for this ridiculous fee be seen any other way than a tit-for-tat discrimination that is explicitly what the h.264's non-discriminitation pledge was meant to preclude.

    Maybe there's some way that Moto will be actually able to defend this claim, but US courts have found industry FRAND pledges to be legally binding on all patent holders… look at the RAMBUS story for a famous error by a company illegally asserting standard-essential patents, or read the Western Wisconsin order in Apple v Moto for explicit citations. This looks like Moto heading into a PR disaster and possibly some serious damages (courts have stripped patent-holders of rights when they abuse FRAND), all for some short-term messing with Microsoft's legal team.

    So another read is that Moto has been aggressive with FRAND patents for a couple of decades, and while it should have no trouble asserting its non-standards-essential patents such as push email, this one looks like a big loser for a firm that knows it won't win.

    Despite Microsoft being a big bully that supposedly started it first. Waaaaah!

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