Innovation Asset Blog

Microsoft-Nokia deal raises IP concerns in China

Microsoft Corp. has made a $7.5 billion bid to take over Nokia Oyj's handset operations. Chinese mobile-phone makers Huawei Technologies Co. and ZTE Corp. asked China's Ministry of Commerce to ensure Microsoft does not increase patent licensing fees on wireless technology, according to two government officials who asked not to be named. The ministry is now conducting an anti-monopoly review of the deal, according to Bloomberg.

The European Union approved Microsoft's bid on Dec. 4, and regulators said they would monitor the licensing practices of Nokia.

The EU "will remain vigilant and closely monitor Nokia's post-merger licensing practices under EU antitrust rules," according to a statement the organization issued when it approved the bid. Microsoft and Nokia are already embroiled in an EU antitrust complaint, which Google filed last year alleging the companies are using their intellectual property to avoid competition.

Nokia holds more than 7,000 patents for handset and communications devices, and has filed complaints against many cell phone manufacturers for patent violations. Blackberry pays the company royalties for use of its intellectual property. The fear in China is that Nokia may seek licensing fees from Chinese manufacturers after its hardware business belongs to Microsoft.

Peter Ackerman

Peter Ackerman

Founder & CEO, Innovation Asset Group, Inc.