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back to article EU competition chief threatens patent war smackdown

European anti-competition chief Joaquin Almunia has warned that the EU won't stand for any messing about with technology standards-related patents. Almunia, giving a speech today at the Concurrences conference in Paris, said that he was prepared to use the EU's enforcement measures, such as fines of up to 10 per cent of a biz's …

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Silver badge

When will they decide...

...that the rectangle shape (may or may not include rounded corners) is an essential piece of intellectual property and should be licensed, under FRAND, to other manufacturers of electronic devices?

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Yag
Joke

Licensed?

And I thought there were millenias-years-old prior art on the rectangle shape...

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Anonymous Coward

ETSI is pretty good about FRAND

at all meetings I've attended there is a bit of a Royal Anthem moment at the beginning of the technical committee meeting as the concept of sharing and making available on reasonable terms of key patents is reinforced, whilst we all salute, or something like that, maybe we ceremoniously check our e-mails?

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Mushroom

No mention of Motorola?

It's Motorola where all the action's been in the last few weeks, although we've only heard of Samsung getting a good probing so far. They managed to get various iPhones + iPads withdrawn from sale briefly in germany last week, based on a 3G-essential patent. Summary of what happened:

- They asked for 2.25% to license a FRAND 3G patent.

- That's not 2.25% of the cost of the 3G chip, but 2.25% of the retail price of the final product. Putting that in perspective, if BMW put a 3G chip in the satnav system in a 50k car, Motorola would demand 2.25% of 50k as fair value on one of the hundreds of patents, just for 3G satnav capability.

- There are a LOT of companies with these FRAND declared patents. If they all demand 2.25%, apple would have to pay >100% of the retail price of an iPhone if they want it to support 3G.

- These are essential patents for the 3G standard, unlike apple's "rounded rectangle" crap you can't work around it if you want a working phone.

- They've not even said it's 2.25% for everything. This is for 3G patents - they also have video patents, and probably GPRS and the like. Does that BMW have video screens in the back of the seats? 4.5% of 50k please!

- Samsung were after 2.4%, even more than motorola.

- Google are buying motorola, and have basically said they'll continue with this.

I really hope they stamp this out and fast, it's bad for everyone. The rest of the patent wars are bad too, but FRAND abuse is on a whole other level.

Oh yes, and google... while apple and MS have issued pretty clear statements saying they won't try to get products banned based on FRAND patents, google have said they'll play fair, and 2.25% and getting products banned is fair. Like they say, "Do evil".

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Headmaster

Read before you write

@ Chris 19

No need to mention Motorola as its all covered by Google, their statement however you interprate it is all about what they will do if the deal to buy Motorola goes ahead.

And why shouldn't they or anyone else now have the right to get banned anything even if its an Apple product if the maker is refusing to sign a deal for the patents which is what Apple have done.

If Apple have not signed a deal and the offer was fair and non descrimatary then they deserve to have the book throuwn at them.

What we really need is for this to be widened to all pathetic patent cases with the holder having to pay full costs if they loose.

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Anonymous Coward

Why motorola: because google haven't bought them yet.

Why they shouldn't have the right to get them banned: because it's a standards-essential patent which shouldn't be abused, it's too powerful a weapon.

If as you'd suggested apple had turned down a fair offer? Motorola could take them to court and force them to pay. So long as the offer is fair they don't have any choice but to take a license. This is the way it's traditionally worked (and worked pretty well), and this is what apple + MS have confirmed that they'll stick to.

On the other hand, what happens if motorola's offer wasn't fair at all? What if they'd demanded a figure so high that if every owner of a 3G patent demanded the same every phone with 3G instantly doubled or tripled in price, because the cost of the patents alone is higher than the current retail price?

That second scenario is where we're at with motorola right now, and the law on FRAND patents in germany is such that they can take such a claim to court and win. Apple will presumably keep fighting it, and eventually (after many years) it'll get to the european courts on appeal and get rejected - but along the way motorola will likely get many products banned. For many companies that would be a mortal blow, and they'd have to pay up, fair or not. This is why the EU is stepping in.

One other thing: the article mentions that all 3 companies (apple, ms + google) have left themselves some wiggle room. Google clearly left the door wide open, but apple's position is interesting. They said they won't get any products banned based on essential patents - unless somebody else tries it on them first. I seem to recall a consortium including apple + MS buying a whole lot of LTE 4G patents not long ago, and google being extremely angry about losing the auction.

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Holmes

@Big_Ted

What we need is for companies like Samsung and Motorola to be slapped down when they break their legally binding FRAND agreements. What Motorola and Samsung are trying to do is called extortion, hence the EU investigation.

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Facepalm

Come and see the inconsistency inherent it the system

The EU has promised to make sure that state-sponsored monopolies will be made available for everyone.

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g e
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Seems to me the system worked fine

Till Crapple started dicking around.

This just in from Joaquin's bank statement:

09-Feb-2012 Credit from Apple Inc: $2,000,000.00

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Anonymous Coward

Oh really, the system was working great when Googlorola sets royalties on single essential 3G patents at 2.25% of sales of the product.

Then Motorola gives and takes away patent licenses to 3G chip manufacturers depending on who's buying them.

That's why we had to get 3G dongles for everything, if you put the 3G chip *inside* the computer/tablet/etc the manufacturer has to pay 2.25% of the it's price to Motorola! <sarcasm>That really shows the system was working fine and encourages innovation.</sarcasm>

But now you "mildly" make accusations that regulators - you know nothing about - are corrupt?

*Some* fandroids can really be a bitter, clueless, lot.

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@Seems to me the system worked fine

You do realise that if Joaquin or a lawyer from Apple were actually to read what you have posted you would probably have to stump up the 2M yourself.

You may think it's a joke but the law could well decide otherwise.

Be careful what you say online - you are not as anonymous as you think.

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Facepalm

As is expected

When the facts are against a googltard they resort to slander.

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Pint

FIGHT!!!

Has they ordered new handbags for the morning?

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I wonder how much consideration they have given to the possibility that these companies would cease to contribute their patents to standards bodies if it requires FRAND?

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Holmes

No consideration at all because it wouldn't happen.

There's no point in holding a patent that would allow higher data rates if nobody adopts it, there's no point in putting it into one's own handsets if it's not in the base-stations. There's no point putting it into the base-stations if it won't be in a large fraction of handsets. This is the reason why industry bodies grew up in the first place, this is the reason why companies like Moto and Nokia joined them and submitted their patents.

This isn't bait and switch - this is what Moto signed up for.

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Devil

Funny noone finds this disturbing.

So the EU threatens companies on a 10 percent revenue tax on rules they make up themselves? So where does that 10% go to then? The Greek money pit?

It seems like standards are now some new kind of card used in the old economic war card game.

I trump your state controlled rating agencies downgrading our countries card, with our self made anti-competition laws? Oh but then I'll trump yours with my: you violate human rights card..

Slick.. Wait while I get my beer and chips to see how this thing will unfold.. This is going to be good.

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Open Document Format

The EU regulator didn't care when MS had the ISO standard for ODF bent to their requirements. He now seems to be championing the cause of a large organisation whose patent portfolio reflects a preference for form over function, against those companies that have invested heavily in R&D to develop the actual technologies necessary to make mobile phones work.

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@Majid: "So the EU threatens companies on a 10 percent revenue tax on rules they make up themselves?"

Not much different from the US making up rules imposing penalties against other countries/non-US companies that do business with people the US deems "evil". It has long abused its dominant economic status to bully other countries. And if economic bullying doesn't do the job quick enough they have no qualms about using their dominant military status to speed things up.

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Hang on

As I understood it, part of the problem was:-

a) One company using patented tech, without acknowledgment or payment

b) Patent holder catches them doing it & demands payment

c) Company offers FRAND rates (retrospectively)

It's a fairly standard understanding in patent/copyright that you don't get the cheap rates when you blag the goods and then get caught.

Am I wrong?

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