Bloomberg News

Google Pledges to Honor Commitments on Motorola Patent Licenses

February 09, 2012

Feb. 8 (Bloomberg) -- Google Inc., the largest maker of smartphone software, said it will honor Motorola Mobility Holdings Inc.’s commitments to license patents that are part of industry-standard technology.

Google would resolve “standard-compliant” patent disputes before taking any legal moves toward a court injunction, the company said in a letter to technology standards groups to answer questions from the European Commission about its planned $12.5 billion acquisition of handset maker Motorola Mobility. Motorola Mobility holds more than 17,000 patents that would help Google protect its Android software partners in licensing and legal feuds with competitors such as Apple Inc.

“Transparency and consistency in licensing practices are important with respect to standard essential patents,” Deputy General Counsel Allen Lo said in a letter to the European Telecommunications Standards Institute. “I am confident that Google’s acquisition of MMI will not disturb those goals or otherwise adversely affect” manufacturers or consumers.

Lo sent the letter a day after a deadline passed for Mountain View, California-based Google to submit remedies to the European Commission. The letter is a “good step” for Google, said Maulin Shah, managing director of patent research company Envision IP Inc. in New York.

“Having the blessing of wireless standards committees could help Google’s position,” Shah said in an interview. “The regulators might see that as a sign that this is not going to lead to a monopoly position.”

Royalty Fees

European regulators will rule on the acquisition by Feb. 13, Antoine Colombani, a spokesman for the commission in Brussels, said yesterday. The agency could clear the deal or open an in-depth probe that would last about 90 working days.

Google Chief Executive Officer Larry Page said in August the company’s bid for Libertyville, Illinois-based Motorola Mobility would help protect Android against “anticompetitive attacks” from Apple and Microsoft Corp.

Google would seek a royalty fee of a maximum of 2.25 percent of the net selling price of each product that licenses Motorola Mobility patents covering industry standards, according to the letter. Google said it would negotiate “in good faith for a reasonable period” as long as both parties agree not to initiate legal proceedings or seek a ban on use of the technology. It didn’t match a pledge by Microsoft to not seek any bans on technology that’s essential to industry standards.

Patent Lawsuits

Microsoft, the world’s largest software maker, said in a posting on its website today it would be “fair and reasonable” in licensing industry-standard technology, pledging to negotiate with competitors instead of trying to block sales of their products. The company also will make its industry-essential patents available without requiring companies to cross-license their own non-essential technology.

Motorola Mobility has sued Microsoft and Apple for infringing patents that are covered partly by standards in which companies agree to share technology that is common across their industry.

Niki Fenwick, a spokeswoman for Google, said Motorola Mobility’s patent-licensing approach won’t change after the acquisition. The company will continue to offer terms that are fair, reasonable and nondiscriminatory, or FRAND, she said.

“Since we announced our agreement to acquire Motorola Mobility last August, we’ve heard questions about whether Motorola Mobility’s standard-essential patents will continue to be licensed on FRAND terms once we’ve closed this transaction,” she said. “The answer is simple: They will.”

The acquisition -- the largest wireless-equipment deal in at least a decade, according to data compiled by Bloomberg -- makes Google a competitor to the other handset makers that make Android devices. In addition to running on Motorola Mobility phones, the software works on handsets made by Samsung Electronics Co. and HTC Corp.

--With assistance from Hugo Miller in Toronto and Susan Decker in Washington. Editors: Romaine Bostick, John Lear

To contact the reporters on this story: Edmund Lee in New York at elee310@bloomberg.net; Brian Womack in San Francisco at bwomack1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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