Motorola not playing Fair, Microsoft Claims

by Jeff Wiener on February 23, 2012

Should Google’s impending acquisition bid for Motorola Mobility finally go through I would guess that the latter will have a difficult time ingratiating itself with its new Google family who pride themselves on their ‘Don’t Be Evil’ philosophy…unless Google really is evil of course.

I say this in light of two recent events, the first being the Department of Justice and its European Union regulatory counterpart giving Google approval for its Motorola acquisition, approval that came with the stipulation that the search engine giant must maintain fair and equitable practices when it comes to licensing its newly acquired patents; the second event being Motorola’s apparent blatant disregard for these stipulations.

While it remains to be seen whether Google is actively involved, Motorola has come under fire from Microsoft in a FRAND (fair, reasonable, and nondiscriminatory) patent abuse claim, the latter arguing that Motorola is demanding unreasonable compensation for Microsoft’s use of industry standard patents related to viewing video on the Web that Motorola holds claim to.

Regardless of how this particular case plays out, I’m sure it can’t make the Federal regulatory bodies happy to see their decisions so quickly disregarded.

When the DOJ approved both Google’s acquisition bid for Motorola and Apple’s auction bid for the last vestiges of Nortel’s once glorious patent trove, the decisions came with one clear message, play fair. In a statement the DOJ acknowledged the latent potential for either company to abuse its newfound power by using such intellectual property to hamstring competitors who depend on the patented technology in question, but promised to uphold market competition and enforce fair competitive practices.

Simply put, in a technology sector where everyone uses everyone else’s patented technology to make smartphones and tablets, the regulatory bodies involved have designated certain patents as industry standards, meaning that the companies who hold those patents have to make them available to their competitors at a fair price. The problem, according to Microsoft, is that Motorola isn’t playing fair, and it’s trying to drive Microsoft out of certain key markets.

To wit, Microsoft contends that Motorola is demanding the Redmond PC giant cough up $22.50 in royalties for each $1,000 laptop sold that utilizes patents related to viewing video content over the Web. By comparison, Microsoft says that it uses patents from 29 other companies in its laptops as well, patents that under FRAND terms cost Microsoft two cents per unit for access to some 2300 patents.

This isn’t the first time Motorola has been hit with a FRAND abuse claim either, as Apple levied such a charge last month after losing a patent case to Motorola in Germany.

While Microsoft is certainly taking the opportunity to make its voice heard in opposition to the impending Google/Motorola acquisition, don’t’ think that Microsoft is simply a victim here either, as Motorola is one of the only Android vendors to resist Microsoft’s own demand for royalties, a demand that to date has Microsoft receiving money from 70 percent of the Android devices sold globally.

Despite the fact that on the face of it Motorola looks to be violating fair competitive practices, with Microsoft bilking thousands of companies out of hard earned revenues its hard to feel sorry for either side, with this ongoing patent Cold War raising feelings of annoyance and boredom (and a little nausea as well) instead.

{ 3 trackbacks }

Microsoft Hires Google Watchdog —
August 20, 2012 at 5:46 am
How do you solve a Problem like Motorola? —
August 20, 2012 at 8:23 am
Microsoft Wins FRAND Patent Battle against Motorola —
September 9, 2013 at 5:40 am

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