Bloomberg News

Motorola Mobility, Samsung Escape EU Fines in Apple Clash (1)

April 29, 2014

Motorola Mobility (MMI:US) and Samsung Electronics Co. (005930) avoided fines as European Union antitrust regulators said “patent wars” with Apple Inc. (AAPL:US) shouldn’t allow consumers to get caught in the crossfire.

Motorola Mobility, which Google Inc. (GOOG:US) is selling to Lenovo Group Ltd., broke EU antitrust law when it sought and enforced a German legal injunction against Apple over patents for technology for industry-standard products such as mobile phones, the European Commission said. Samsung and the EU finalized a settlement that ends a similar antitrust probe.

“The so-called smartphone patent wars should not occur at the expense of consumers,” Joaquin Almunia, the EU’s competition chief, said today in an e-mailed statement. The EU’s decisions provide “legal clarity on the circumstances in which injunctions to enforce standard essential patents can be anti-competitive.”

The EU is cracking down on patent abuses as Motorola Mobility, Microsoft Corp., Apple and Samsung trade victories in courts across the world on intellectual property. Industry-standard technology helps ensure products such as mobile-phone antennas and global-positioning system software can operate together when made by different manufacturers.

Motorola Mobility wrongly forced Apple to give up its rights to challenge the validity of the patents or whether its products infringed the patents as part of an agreement to settle some litigation, the EU said. The Libertyville, Illinois-based company must now strike out any “anti-competitive” clauses.

Apple iPads

Motorola Mobility briefly made Apple remove some older iPhone and iPad models from its online store in Germany when it won a patent ruling at a court in Mannheim in 2011.

“We agree with the European Commission that injunctions should only be sought against unwilling licensees and, in this case, Motorola Mobility followed the procedure established by the German courts,” said Katie Dove, a spokeswoman for the phone manufacturer.

The EU opened a formal probe into Motorola Mobility, which makes smartphones that run on Google’s Android software, in April 2012, following complaints by Microsoft and Apple. The two U.S. companies accused Motorola Mobility of seeking injunctions over patents they had promised to license on terms that are “fair, reasonable and non-discriminatory.”

While the EU ruled that Motorola Mobility breached EU law, it wasn’t fined because there is no EU court-case law on the legality of legal action over such patents. National courts have “so far reached diverging conclusions” on the issue.

Five Years

Samsung’s pledge to avoid injunctions in Europe over standard-essential patents for five years was separately finalized by the EU and made legally binding. Under the pact, a court or an arbitrator will rule on what terms are fair and reasonable to license Samsung’s key patents.

Samsung’s settlement “implies no wrongdoing” by the company and ends the EU’s antitrust probe, Rhee So-eui, a spokeswoman for the Suwon, South Korea-based company, said in an e-mailed statement. The agreement “will reduce uncertainties and create greater clarity in the industry.”

To contact the reporters on this story: Gaspard Sebag in Brussels at gsebag@bloomberg.net; Aoife White in Brussels at awhite62@bloomberg.net

To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net Peter Chapman, Mark Beech


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