Motorola Mobility in double Euro probe over patent warfare The European Commission's anti-competition division has opened two formal investigations into Motorola Mobility after complaints from Apple and Microsoft about how it uses its patents against them. The commission said in a canned statement that it wants to figure out if Motorola Mobility has "abusively, and in contravention of …
Hopefully they'll sort this out quickly, motorola + samsung need a good kick in the balls over this.
And here's a quick rundown of why FRAND abuse is so bad, for everyone about to post up that apple + MS should be first in the firing line for trying things like the rounded rectangle debacle:
1. Apple + MS are both suing motorola over a bunch of patents. But *NOT* standard-essential patents (SEPs). Apple are suing over their slide-to-unlock patent for example. Moto have a few options: do a different unlock screen, use it anyway and risk a bad outcome in court, or ask politely for a license (which apple may or may not grant, on whatever terms they feel like).
2. Motorola are suing apple over SEP patents for 3G. Apple *can't* work around this, except by removing 3G (and probably 4G and 2G) from their phones, because it's part of the 3G standard and a 3G phone must implement the patent. They can license it, or they can not license it and go to court.
3. Because it's a SEP, motorola agreed to FRAND licensing. They must offer a cash-only deal, it must be fair, and it must be reasonable. Otherwise they could demand stupid amounts of cash and threaten to get rival's products banned if it's not paid, and the 3G standard would never have been workable.
4. The german courts have decided that FRAND isn't really important, and companies like motorola can ask any fee they like so long as it's not REALLY extortionate. They also decided to make the rules such that apple have to take very unreasonable steps like paying the license before they argue about it in court. It's a mess in .de to say the least, no other countries have come to this kind of legal conclusion.
5. Moto are therefore suing everyone in germany, and demanding billions in licensing. They're demanding something like 2% of the retail cost of a PC just to cover a few H264 playback patents in windows for example. If the other few hundred H264 patent holders demanded the same, H264 playback in windows would cost more than an entire PC.
Add the same for wifi and the other standards used in PCs and you're looking at a few grand in patent fees. Note that linux implements wifi too - if motorola are right, then in future linux as an OS only might cost more than a mac in 2012.
6. Naturally motorola can't actually 'win' on this. If they succeeded in germany, apple/ms/etc. would appeal to a higher court, then a higher court, .... , then the EU. They EU would put things right, many years in the future. After many years of products like windows, iPhones, xboxes etc. being banned. MS/apple/etc would lose out massively in this scenario - which gives motorola huge power over them, which they can use to demand massive payments and access to any other company's patents. This is pretty obvious market abuse, hence the EU investigation.
First of all, let's just drop the pretense that this is at all about fairness and standardisation no matter who the patent holder is... it's about using regulation as a tool to beat up the competition, nothing more. A bit like Al Capone, the Winter Hill Gang or the Lucchese would use the police and FBI to damage rival gangs.
Now with that out of the way, if Apple and Microsoft succeed here then it will be a Pyrrhic victory indeed... say goodbye to future SEPs and more format-wars and incompatibility.
Essentially Apple and MS are doing what a corp does naturally, lobbying for regulations that favour them, lobby against regulations that harm them. That's why MS can force 5% POS on Android device vendors for their non-FRAND patents, but whine when asked to fork out 2.5% POS on FRAND patents (oh and I think most people would consider some of the patents Apple and MS hold to be 'essential' even though they are not offered on FRAND terms).
So, forgetting the SEP/non-SEP for a moment, essentially MS and apple are saying 2.5% POS charge is not fair, but 5% POS charge is fair (as long as they are the one's collecting)!
With regards to Apple, rectangular shapes? Seem pretty standard design to me, works for TV's digital photo phrames, monitors and all sorts of other VDUs, but suddenly because it's a smart phone the rectangular shape needs to be protected? Or icon layout... FFS! I would say in any modern OS icons are pretty standard and essential.
So the question should be, why aren't Apple and MS forced to offer some of these particular patents they hold as FRAND, since they cover things which are now pretty standard and pretty essential?
Instead, what we have is Corp A and Corp B reserving the right to charge extortionately (cuz, y'know, we're not offering them as FRAND), but wailing about the less than extortionate price offered by Corp C, who long ago offered FRAND patents in order for the technology and market to standardise and thus progress.
If companies with FRAND patents are going to be abused in such a way by those competing in the same market with non-FRAND patents, guess what's going to happen to the next generation of tech?
Less and less will be standardised as companies are going to be hesitant to offer their patents as FRAND, when they know (a) They need to hold onto them as a MAD defense and (b) there's more money to be made from the competition non-FRAND than FRAND.
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It's actually worse than that. What Moto have done is revoke the license that a chip supplier has already paid FRAND licensing on, for every chip sold to Apple. In other words, Moto have discriminated at the component supplier level, specifically to target Apple. Instead of the 2c a chip (or whatever the FRAND patent fees are for the chip manufacturer) Moto is demanding 2.5% of the retail price of an iPhone!!!
So, Apple bought fully licensed components for their products, and Moto withdrew the licence from the chip supplier for just the chips Apple use.
I cannot describe how nefarious this act is, and the courts should crucify Moto, the executives involved and their Google "masters"
Dweeb
5. Moto are therefore suing everyone in germany, and demanding billions in licensing. They're demanding something like 2% of the retail cost of a PC just to cover a few H264 playback patents in windows for example. If the other few hundred H264 patent holders demanded the same, H264 playback in windows would cost more than an entire PC.
I thought that software patent such as those covering H264 weren't valid in the EU, hence why software such as VLC and linux distro's that are not based in the US can decode H264 videos 'out of the box'
Much as I'm loathed to add another layer of bureaucracy, I'm increasingly of the opinion that essential standards patents (those of the FRAND variety) should be administered though a third party via menu pricing to ensure they are being issued on a fair and non-discriminatory basis.
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