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 @ 10:53am

    Re: Re: Re: Re: Re:

    It's only hypocritical if you believe that there are not BIG DIFFERENCES between FRAND and non-Standards-Essential patents.

    The US Constitution explicitly calls for giving inventors a (time-limited) monopoly on their work. Patent-holders are given TOTAL FREEDOM to sit on an invention, sell a zillion widgets that competitors can't build, (or uniquely run a dataing service based on Singlar Value Decomposition!), or license to other firms at vastly “unfair” terms. In the Constitution.

    But Moto voluntarily signed away those rights when they declared their h.264 work essential to that standard. Within h.264, they have promised to let any and all use it on FRANDly terms.

    *YOU* may not like Microsoft's stance, but that is not to say it is hypocritical for Microsoft to exercise its constitutionally-guaranteed right, while accusing Motorola of breaking its contract with all potential customers of h.264, by suing somebody they want to play rough with. Many companies *ARE* hypocritical but it's all legal and people who call out hypocrisy never seem to balance all the players; they're playing a children's game of “he did it first!” that we parents try to help them grow out of.

    If Microsoft's complaints are judged unworthy, the EU will reply, “tough. You can stew over how you don't want to pay Motorola many billions of dollars a year, and either rip out h.264 support from your products, or work it out.”

    That won't be your or my call, however; it'll be done by the EU and US regulators who we have given the power to enforce the laws this way. So let Microsoft make all the false claims they want. If they are racketeering, they'll get slapped down. It's just that the evidence we all see suggests just the opposite. Moto hasn't said a word why what they're doing is legal/fair, and when Google wrote about Moto's policies, the EU expressed explicit concern about patent abuse. So I think the “tough” scenario is pretty unlikely. I can't imagine what Moto/Google thinks it's gaining here.

    PS breaking news that a German appeals court has overturned Moto enforcing its FRAND-pledged patent against Apple. Despite what either of us think about Apple's and Moto's patent aggressiveness, they couldn't support an injunction based on the same type of patent — one pledged as FRAND — that Microsoft complained about.

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