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Microsoft EU complaint attacks Google and Motorola Mobility over patent fees

by David Needle

February 22 2012

Microsoft's complaint to EU antitrust officials claims Motorola is demanding too much money to license video-related patents.
Microsoft's complaint to EU antitrust officials claims Motorola is demanding too much money to license video-related patents.

Claiming high patent royalty fees threaten to kill video on the Web, Microsoft filed a complaint today with European antitrust authorities against Google and Motorola Mobility.

The complaint to the European Union pits Microsoft against Google and Motorola Mobility, the mobile device maker the search giant is in the final stages of acquiring in a $12.5 billion deal announced last year. 

It’s also is far from the first legal wrangle between Microsoft and Google who have also battled over patent rights to technology in Google’s Android software. 

In this case, Microsoft claims Motorola Mobility is asking too much for patents related to the H.264 video standard, contrary to earlier agreements by Motorola and others that the patents be available on fair and reasonable terms, and would not use them to block competitors from shipping their products. Microsoft said it was prompted to complain to the EU because Motorola is attempting to block sales of Microsoft’s Windows PCs, Xbox game consoles and other products over the issue. 

"Microsoft's complaint is just another example of their attempts to use the regulatory process to attack competitors," Google said in a statement to TabTimes. "It's particularly ironic given their track record in this area and collaboration with patent trolls."

[UPDATE: After this article went live, Motorola provided a more detailed response you can see at the end of this article].

But Dave Heiner, deputy general counsel in Microsoft’s Corporate Standards & Antitrust Group, gave a very specific account of what his company’s objections are to the patent fees. In A blog post, Heiner said Motorola has refused to make its patents available at “anything close to a reasonable price.” 

For example, Heiner says Motorola expects a royalty of $22.50 for the 50 patents it owns related to the H.264 video standard for a $1,000 laptop. 

“As it turns out, there are at least 2,300 other patents needed to implement this standard,” said Heiner. “They are available from a group of 29 companies that came together to offer their H.264 patents to the industry on FRAND [Fair and Reasonable] terms. 

Heiner said that other set of patents only cost Microsoft $.02 for $1,000 laptop. 

“Motorola is on a path to use standard essential patents to kill video on the Web, and Google as its new owner doesn’t seem to be willing to change course,” said Heiner.

A New York Times article on the issue notes that Apple has filed a similar complaint to regulators over Motorola’s licensing terms.

Motorola Mobility responds

While it did not get into specific licensing payment terms, Motorola disputed Microsoft's charges in a statement emailed to TabTimes: 

"Motorola Mobility has an industry leading patent portfolio and a history of successful cross-licensing with a wide spectrum of companies in the U.S. and around the world.  Microsoft’s complaint and blog posting today are simply tactics in the patent battle that Microsoft initiated with surprise infringement actions against Motorola Mobility in October 2010 accompanied by press statements making clear the actions were aimed at Android.  And, Microsoft’s complaint with the International Trade Commission sought injunctive relief against Motorola Mobility based on Microsoft’s own standards essential patents.  With its recent actions, Microsoft has simply reversed its position on FRAND in order to suit its latest litigation tactic. 

"Contrary to Microsoft’s assertions, Motorola Mobility remains open to resolving the current licensing dispute with Microsoft in a mutually beneficial manner.  Microsoft has touted the value of patent licensing for its own patents, but a fair resolution requires that Microsoft also recognize the value of the Motorola Mobility patents it is using.  Motorola Mobility offered Microsoft the same FRAND terms it historically offered to other licensees, but Microsoft ignored the offer, preferring instead to use the litigation weapon."

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