European Commission sends charges to Motorola Mobility on misuse of standard-essential patents

On 6 May 2013 the European Commission stated that it has issued formal objections to Motorola Mobility, alleging that the company’s seeking and enforcing of an injunction against Apple in Germany on the basis of its mobile phone standard-essential patents (“SEPs”) for the GPRS standard amounts to an abuse of a dominant position prohibited by Article 102 of the Treaty on the Functioning of the European Union (“TFEU”).

While the Commission does not question the availability of injunctive relief for SEPs for patent infringements, for example in the case of unwilling licensees, however, in the circumstances the Commission’s view is that recourse to injunctions harms competition based on Motorola’s previous commitment to license SEPs on Fair, Reasonable and Non-Discriminatory (so-called “FRAND”) terms, and the agreement of Apple to accept a binding determination of the terms of a FRAND licence for SEPs by a third party.

In general, the FRAND commitment is designed to ensure effective access to those patents which are standard-essential, as a precondition for any company to sell interoperable products in the market. Such access allows consumers to have a wider choice of interoperable products while ensuring that SEPs holders are adequately remunerated for their intellectual property. The Commission is concerned that the threat of injunctions, which generally involve a prohibition to sell the product infringing the patent, can distort licensing negotiations and lead to licensing terms that the licensee of the SEP would not have accepted absent this threat. This would lead to less consumer choice. [Gabriele Accardo]

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