German court bars Motorola from enforcing potentially FRAND-abusing patents against Apple
A German appeals court has issues a temporary ruling that prevents Motorola (currently in the process of being acquired by Google) from enforcing a ban on Apple iPhones and iPads based on what may be FRAND-absuing terms. Bloomberg reports:
“At the current state of the proceedings, it is to be assumed that Motorola Mobility would violate its duties under antitrust rules if it continues to ask Apple to stop the sales,” the court said in a statement.
FRAND patents are considered essential to standards-based implementations of technology, and in exchange for a patent becoming part of a standard, they're expected to be licensed to anyone and everyone under Fair, Reasonable, and Non-Discriminatory (FRAND) terms.
Apple, which is suing many other companies based on non-FRAND (i.e. proprietary) patents, has been counter sued by Motorola and Samsung based on FRAND patents, something the European Union is now investigating.
It's probably too soon to tell how big a blow this is for Motorola, though Florian Mueller of FOSS Patents thinks it could be a deal breaker, especially in terms of how much value it takes out of the Motorola acquisition for 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. Google, which was totally in agreement with MMI's litigation strategy, was hoping to buy that leverage for $12.5 billion, and Germany was a key part of that plan because its legal system places a relatively high burden on implementers of standards invoking the FRAND defense. In fact, Google's public statement on the post-acquisition use of MMI's patents proposed the German approach to FRAND as the way forward for the whole world. With today's ruling, Googlorola's strategy has failed even before the companies have formally merged. This is such a major blow to Google's patent strategy that, from a mere shareholder value point of view, it should now give serious consideration to the possibility of coughing up the $2.5 billion break-up fee agreed upon with MMI's board of directors and walk out on this deal. After all, that $2.5 billion payment would be an affordable subsidy for the only totally Google-aligned company among the major handset makers. But in all likelihood, Google will nevertheless try to close the deal, if only to avoid a colossal embarrassment for its CEO and other decision-makers.
This doesn't affect Motorola's other cases against Apple, including the non-FRAND win on pager sync patents that forced Apple to stop providing push email for German iCloud and MobileMe users.