Microsoft joins Apple in Motorola patent war

Published on 23/02/2012 00:00

TECHNOLOGY giant Microsoft yesterday lodged a formal complaint with the European Union’s competition regulator against Motorola Mobility and its soon-to-be owner Google, claiming Motorola’s aggressive enforcement of patent rights breaks EU anti-trust rules.

The complaint follows a similar step by another US tech giant, Apple, against Motorola last week. Analysts said yesterday that the regulatory developments were not unexpected given that Apple and Microsoft have been hit by legal cases in Europe and the US. Motorola claims that its big rivals are using key patents it owns without permission.

But Apple and Microsoft have hit back with allegations that Motorola overcharges for the use of these patents, which cover technologies necessary to connect wirelessly to the internet or stream video online.

Dave Heiner, Microsoft’s deputy general counsel, said yesterday: “We have taken this step because Motorola is attempting to block sales of Windows PCs, our Xbox game console and other products.

“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.”

Motorola is being taken over by search engine Google for $12.5 billion (£8bn), the biggest acquisition in the Californian company’s history. Analysts said Microsoft fears that Google will continue Motorola’s tight hold on key patents.

A spokesman for Google said that the company had not seen the Microsoft complaint. Motorla was not immediately available for comment.

The complaints are the latest development in increasingly bitter disputes between global technology giants over patents on standardised technologies.

When the European Commission, the EU’s competition watchdog, cleared Google’s takeover of Motorola earlier this month, it indicated concern over Motorola’s aggressive patent enforcement. The US justice department in its clearance of the merger made similar comments.

Microsoft says Motorola is demanding an unreasonable fee for using its patents, amounting to 2.25 per cent of the products’ total price. For a $1,000 laptop that would mean a royalty of $22.50 for using 50 patents related to a video standard. Microsoft says a group of 29 companies that hold the other 2,300 patents related to this standard charge a total of 2 cents for using them.

Heiner said yesterday: “If every firm priced its standard essential patents like Motorola, the cost of the patents would be greater than all the other costs combined in making PCs, tablets, smartphones and other devices. Obviously, this would greatly increase prices for consumers.”