Analyst: Apple Deals A Blow To Motorola, Google In Germany

Apple’s victory over Motorola Mobility in a German appeals court allows it to keep selling the iPhone and iPad online. Apple apparently made an offer for patent-licensing terms that the court found agreeable; and according to one analyst, if Motorola turns down that revised agreement, it could pose substantial risks for both it and soon-to-be-parent-company Google.

“Motorola was hoping to gain near-term leverage against Apple and Microsoft through the aggressive pursuit of injunctive relief based on standard-essential patents,” patent expert Florian Mueller wrote in a 27 February posting on his FOSS Patents blog. “Google, which was totally in agreement with MMI’s litigation strategy, was hoping to buy that leverage for $12.5 billion (£7.8bn).”

New proposal

But if Motorola fails to accept Apple’s new proposal, Mueller wrote, then it risks a potential antitrust violation, with penalties, including fines from the European Commission, the European Union’s antitrust watchdog.

Meanwhile, until the actual appeal works its way through the system, Motorola is apparently “barred from further enforcement of its standard-essential patent injunction against Apple in Germany”. (Motorola’s other injunction against Apple in Germany – apparently not based on a standard-essential patent – isn’t affected by this particular battle.)

The overall impact on Google could be far larger than the outcome of a German court case. “With today’s ruling, Googlorola’s strategy has failed even before the companies have formally merged,” Mueller added. “This is such a major blow to Google’s patent strategy that… it should now give serious consideration to the possibility of coughing up the $2.5 billion breakup fee.”

Apple isn’t Motorola’s only opponent in Germany. Microsoft recently filed a formal complaint with the European Commission against Motorola Mobility and Google, arguing that the latter broke an earlier promise to make patents available on fair terms.

Broken promises

“We have taken this step because Motorola is attempting to block sales of Windows PCs, our Xbox game console and other products,” Dave Heiner, vice president and deputy general counsel of Microsoft’s Corporate Standards & Antitrust Group, wrote in a 22 February posting on the Microsoft on the Issues blog. “Their offence? These products enable people to view videos on the web and to connect wirelessly to the Internet using industry standards.”

In Microsoft’s telling, Motorola and other companies agreed to common technical standards for video and Wi-Fi, the better for building compatible products. In exchange, patents governing those standards would be made available to participants on “fair and reasonable terms”.

If Microsoft, Apple and Google can’t beat their respective opponents on store shelves, in other words, each is more than willing to continue to fight in court.

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