The European Commission has been investigating Motorola Mobility's patent licensing practices for more than a year now following allegations of potential abuses of power. This week, the EU's regulatory body formally revealed its preliminary judgment that the company was likely out of line when demanding a sales ban on Apple products in Germany on account of an infringement dispute.
Motorola contests that Apple was given ample opportunity to negotiate patent licensing agreements on fair, reasonable and non-discriminatory (FRAND) terms, yet Apple contends that the 3G connectivity patents in question are standards-essential and objected to what it viewed as exorbitant royalty demands. The case has only taken on added intrigue since Google acquired Motorola Mobility just one month after the EU antitrust investigation was initially opened.
"In such a situation, the Commission considers at this stage that dominant SEP (standards-essential patent) holders should not have recourse to injunctions, which generally involve a prohibition to sell the product infringing the patent, in order to distort licensing negotiations and impose unjustified licensing terms on patent licensees," the EC statement read. "Such misuse of SEPs could ultimately harm consumers."
Regulators were careful to note that their preliminary notification is not a final judgment on the matter, and informed reporters that the majority of behaviors under review occurred before Motorola partnered with Google. Nevertheless, according to Ars Technica, the company could incur a fine upwards of $400 million if the violations are deemed serious enough.