Motorola Mobility won’t appeal the European Commission’s decision on patent licensing

By Nicole Daniel

Motorola Mobility (Motorola) has decided not to appeal the European Commission’s decision holding that it was abusing the way it licensed standard essential patents for mobile-phone standards.

The Commission had investigated technology companies since it was concerned that consumers are forced to pay more for phones or that phones may be withheld from the market if patent holders use their market power to get higher royalty rates for licensing their patents.

In April 2014 the Commission adopted a decision that found that seeking and enforcing an injunction in a German court against Apple regarding a smartphone standard essential patent constituted an abuse of its dominant position.

The Commission found that it was abusive of Motorola to both seek and enforce an injunction in Germany against Apple based on a standard essential patent that it had committed to license on FRAND terms and where Apple had agreed to licence the patent in question and even agreed to be bound by a determination of the German court of the FRAND royalties.

 According to the Commission it was anti-competitive of Motorola – under the threat of enforcing an injunction – to insist that Apple give up its right to challenge the validity or infringement of Motorola’s standard essential patents by Apple’s mobile devices.

Since there is no case law dealing with the legality of standard essential patents based injunctions under Article 102 TFEU and there are diverging conclusions in national courts, no fine was imposed on Motorola. Motorola was ordered to eliminate the negative effects resulting from its anti-competitive behaviour.

As Motorola did not file a court challenge to the Commission’s finding, this means that its decision stands and no judge will have a chance to scrutinize the Commission’s approach.