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), 28 Feb 2012 @ 5:06pm

    Re: Re: Re: Re: Re: Re: Re: I have given MS enough money

    This article is based on a cockamamie legal theory that exonerates Motorola's behavior (by claiming that “better” behavior is impossible). It offers a judgement about Moto's actions. I challenged that mealy-mouthed apology for bad behavior.

    I offered reasons why I thought those actions would be slapped down. Those reasons were not so much my opinions about Moto as they were an attempt to understand what was happening. (My first hands-on experience was on a 1970's-era MC6800 breadboard computer; loved my RAZR; etc.)

    When a person offering an interpretation is met with, “that's it. End of discussion. You're done,” it's pretty obvious that, as I noted earlier, you are not interested in anything other than the answer that suits your preconceptions. We could talk about whether Moto was taking a risky course, based on what you've read or otherwise know. But you don't care because you don't like the idea that Moto doesn't walk on water.

    Anyhow, it seems unnecessary. Unexpected by me, the EU Competition Commission's chief Almunia laid out his organization's intention to stop predations by holders of standards-essential patents in a speech today:
    I have been following with keen interest the patent wars among mobile-device firms. It is clear to me that competition policy must intervene to prevent that patents that are essential for a standard are used strategically to block competitors.
    That would defeat the very purpose of the patent system, which is supposed to stimulate innovation.
    This is the crux of the case we have opened against Samsung on concerns that the company may have abused the standard-essential patents it holds and failed to honour its commitment to licence them at terms that are fair, reasonable and non-discriminatory.
    Standards are essential in this industry, because different devices can work with each other only thanks to commonly agreed technologies.
    And because to build a modern smart phone one needs thousands of standard-essential patents, their holders often have considerable market power.
    Any company that holds these patents can effectively hold up the entire industry with the threat of banning the products of competitors from the market. This sort of hold-up is not acceptable.
    This month, we have received two new similar complaints against Motorola and we will examine them very closely.
    (I added some emphasis for those who can't find the connection.) Bloomberg News, Business Week and others have the story but the press release of the official text is here.

    Usually I like to trumpet that my judgement allows me to see a better semblance of the future than those without it. But here, while I have had clear indications of both the US and EU bodies' concerns, I had no idea that 24 hours after I volunteered that Moto's actions might be illegal, the chief regulator for the EU — the head of the very group charged with balancing the continent's economic and business interests under their laws — would echo my concerns by saying that blocking rivals was “not acceptable.”

    So no, the fact that I said Moto's actions looked risky was NOT all you needed to know to dismiss my thinking. But the fact that you thought so sure ought to let others know how well-grounded your positions are.

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