Bloomberg News

Apple Files Competition Claim Against Motorola Mobility

February 20, 2012

(Updates with company comment in fifth paragraph.)

Feb. 17 (Bloomberg) -- Motorola Mobility Holdings Inc. said Apple Inc. filed a complaint with the European Union’s competition authority accusing the company of violating a pledge to license industry-standard patents on fair terms.

Motorola Mobility said in a regulatory filing that it was notified of the complaint today by the European Commission. Jennifer Erickson, a Motorola Mobility spokeswoman, said the company is willing to negotiate a patent license with Apple.

Apple and Motorola Mobility have sued each other in the U.S. and Europe over technology used in smartphones, a market that researcher IDC said grew 55 percent last year. Motorola Mobility won two out of three rulings in lawsuits it filed against Apple in a Mannheim, Germany, court, and in one case forced Apple to remove some older iPhone and iPad models from its online store in Germany.

Companies often collaborate on standards that are used to make products work together, with participants pledging to fairly license any patents on the standards they help create. Apple contends Motorola Mobility is violating that commitment. Motorola Mobility, which has said it’s been in licensing talks with Apple since 2007, denied the charge.

“MMI has a long-standing practice of licensing our patents on fair, reasonable and non-discriminatory terms and we offered those to Apple,” Erickson said.

German Courts

German courts have become the focal point of litigation between the two companies, with each seeking orders that would limit sales of the others’ products. Yesterday, a court in Munich said Motorola Mobility’s mobile phones infringe an Apple patent for a method of unlocking touch screens.

Google Inc., which is buying Libertyville, Illinois-based Motorola Mobility for $12.5 billion, pledged to continue the company’s licensing practices. Regulators in Europe and the U.S. granted approval to the purchase while expressing some reservation about how industry-standard patents are handled.

Both Apple and Microsoft Corp. have said they wouldn’t seek any court order to block use of technology covered by industry- standard patents even as they pursue infringement claims over non-essential patents against Motorola Mobility.

Google said it would seek a royalty fee of no more than 2.25 percent of the net cost of devices using its patents, and would try to resolve any disputes through negotiation before asking courts to block use of the Motorola Mobility technology.

“We are aware of the increasingly strategic use of patents in the sector and are vigilant,” EU’s antitrust chief Joaquin Almunia said Feb. 13. “We can avoid a continuation of this patent war.”

--With assistance from Aoife White in Brussels and Karin Matussek in Berlin. Editors: Michael Shepard, Romaine Bostick

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net

To contact the editor responsible for this story: Michael Shepard at mshepard7@bloomberg.net


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