John Paczkowski

Recent Posts by John Paczkowski

Regulators to Google: Watch It With Those Standards Essential Patents

The European Commission and the U.S. Department of Justice cleared Google’s purchase of Motorola Mobility on Monday, but not without an important caveat — one notably shared by both agencies.

Regulators warned Google that their approval of the $12.5-billion acquisition does not preclude continued monitoring of the company’s use of MoMo’s arsenal of 17,000 patents — particularly those deemed standards essential (SEP). Both agencies are clearly very wary of the possibility for their misuse, given Google’s recent endorsement of the not-really-fair-and-reasonable-at-all licensing terms Motorola Mobility has been trying to squeeze out of Apple and others — 2.25 percent of the net selling price in which its patented technology is used. And their dueling statements announcing the approval of the merger reflect this.

Here’s the DOJ:

“In light of the importance of this industry to consumers and the complex issues raised by the intersection of the intellectual property rights and antitrust law at issue here, as well as uncertainty as to the exercise of the acquired rights, the division continues to monitor the use of SEPs in the wireless device industry, particularly in the smartphone and computer tablet markets. The division will not hesitate to take appropriate enforcement action to stop any anticompetitive use of SEP rights.”

And the EC:

“Today’s decision does not mean that the merger clearance blesses all actions by Motorola in the past or all future action by Google with regard to the use of these standard essential patents. Our decision today is without prejudice to the legality under EU antitrust law of Motorola’s past and Google’s future actions. However, the question whether Motorola’s or Google’s conduct is compliant with EU antitrust law cannot be dealt with in the context of the merger procedure.”

In other words, neither agency feels that the SEP and FRAND licensing issues surrounding this acquisition have been properly dealt with. But they will be, if the need arises. And Google best tread carefully.

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