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European Commission investigates Motorola over alleged patent rights abuses

Motorola Mobility is being investigated by EU competition regulators following complaints about the company's use of standards-essential patents.05 Apr 2012

The European Commission said it has launched two investigations to discover whether Motorola has abused a dominant market position in breach of EU competition laws.

The regulator said it had received complaints from Apple and Microsoft about the way Motorola had asserted patent rights over the use of standards-essential technology.

"Following complaints by Apple and Microsoft, the Commission will investigate, in particular, whether by seeking and enforcing injunctions against Apple's and Microsoft's flagship products such as iPhone, iPad, Windows and Xbox on the basis of patents it had declared essential to produce standard-compliant products, Motorola has failed to honour its irrevocable commitments made to standard setting organisations," the European Commission said in a statement.

"In these commitments, Motorola engaged to license those standard-essential patents on fair, reasonable and non-discriminatory (FRAND) terms. The Commission will examine whether Motorola's behaviour amounts to an abuse of a dominant market position prohibited by ... the Treaty on the Functioning of the EU (TFEU). In addition, the Commission will also assess the allegation by both Apple and Microsoft that Motorola offered unfair licensing conditions for its standard-essential patents in breach of ... [the] TFEU," it said.

Standards are agreed technical specifications to ensure that a single technology is used across an industry, often with the goal of achieving interoperability of products regardless of the manufacturer. Companies can opt to send experts to help develop standards but, in return, most standards setting organisations insist that companies agree to licence any intellectual property they own that is essential to implementation of that standard on fair, reasonable and non-discriminatory (FRAND) terms.

Motorola owns approximately 17,000 patents and has made a further 6,000 applications in relation to mobile devices. The company's portfolio includes "hundreds" of standards-essential patents, the US Department of Justice has previously said.

The European Commission is responsible for investigating possible abuses of dominant market position under the Treaty on the Functioning of the European Union (TFEU).

Such abuse can include by "directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions; limiting production, markets or technical development to the prejudice of consumers; applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage" amongst other possible abuses, the TFEU states.

The European Commission is already investigating whether Samsung has also abused a dominant market position in the mobile phone industry. The Commission said that Samsung was obliged to licence the use of patents relating to 3G mobile and wireless technology to rivals on FRAND terms but may have breached this requirement when trying to enforce its patent rights against those rivals in court.