European regulators said in a preliminary ruling that Motorola may have abused its “dominant position” in the mobile phone market by suing Apple to protect a patent that covers technology deemed necessary for a device to work with industry standards. Companies that hold these kinds of “standard essential” patents are supposed to work with competitors to designate fair licensing rates for these necessary technologies. If Motorola is found to have violated those rules, it could face a fine from the E.U.
“The protection of intellectual property is a cornerstone of innovation and growth,” said E.U. antitrust commissioner Joaquin Almunia. “But so is competition. I think that companies should spend their time innovating and competing on the merits of the products they offer — not misusing their intellectual property rights to hold up competitors to the detriment of innovation and consumer choice.”
In a statement, Motorola spokeswoman Katie Dove said that the company has followed the procedures established by German courts and that the firm agrees that these patents should not be subject to dispute when a licensing agreement can be arranged. Apple did not respond to a request for comment.
Google acquired Motorola Mobility in February 2012 for approximately $12.5 billion, in part for the firm’s deep patent portfolio. The E.U. began investigating the case in April 2012.
Strong support for fair licensing on these patents is good for the technology industry, said Robert Stoll, a partner at Drinker Biddle & Reath and a former U.S. patent office commissioner. Allowing technology companies to sue over these patents, he said, would “stymie innovation” and hurt consumers by discouraging companies to make technology that works on a common standard.
Officials in the United States and Europe have criticized companies that use these kinds of patents, which cover technologies such as the ability to connect to a mobile network or have Internet capabilities, as ammunition in their legal battles.
“This is is a pretty small step in what’s been a long dispute,” said Jorge Contreras, an associate professor and a patent law expert at American University. “What regulators have said here is that seeking an injunction is an abuse of your market powers.”
The preliminary ruling follows a January agreement between Google and the Federal Trade Commission on a similar issue. As part of that agreement, Google agreed to withdraw suits around the world that cite essential patents and to stop using these patents in new complaints. That settlement has not been finalized.