FRAND

As if we needed someone to tell us that the ongoing patent lawsuits between Apple and Motorola in Germany were getting a little out of control… Today the European Commission has finally stepped up calling Motorola’s enforcement of an injunction against Apple with mobile standard essential patents “abuse of a dominant position prohibited by EU antitrust rules.” The EU Commission, however, does note that the statement of objections sent to Motorola does not reflect the final outcome of its investigation into its use of standard essential patents (SEPs):

The Motorola Mobility SEPs in question relate to the European Telecommunications Standardisation Institute’s (ETSI) GPRS standard, part of the GSM standard, which is a key industry standard for mobile and wireless communications. When this standard was adopted in Europe, Motorola Mobility gave a commitment that it would license the patents which it had declared essential to the standard on FRAND terms. Nevertheless, Motorola Mobility sought an injunction against Apple in Germany on the basis of a GPRS SEP and, after the injunction was granted, went on to enforce it, even when Apple had declared that it would be willing to be bound by a determination of the FRAND royalties by the German court.

The EU Commission essentially states that Apple should be able to license the technology under fair, reasonable and non-discriminatory terms decided by a third-party, and that Motorola’s approach with its latest injunction could “distort licensing negotiations and impose unjustified licensing terms.” Back in February of 2012, Apple was for a short while forced to remove all 3G devices from its online store in Germany following the injunction, and at the time Apple noted that “Motorola repeatedly refuses to license this patent to Apple on reasonable terms, despite having declared it an industry standard patent seven years ago.”
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After taking a beating by Motorola over FRAND patents this month, Apple issued a letter to the European Telecommunications Standards Institute asking the body to establish consistent royalty fees for patents deemed essential to wireless standards, reported the Wall Street Journal. The body has a role in setting the standards related to GSM, 3G UMTS, and 4G LTE radio technologies.

Apple is involved in nasty patent disputes with Motorola, HTC and Samsung in courtrooms around the world, and it previously asserted in court documents that handset maker Motorola refused to license its essential patents on “Fair, Reasonable, and Nondiscriminatory” (FRAND) nature at rates offered to Nokia, Samsung and other vendors. According to the Journal:

Many mobile technology companies, such as Motorola Mobility Holdings Inc. and Samsung Electronics Co. Ltd., hold patents that became part of industry-wide standards. Standards bodies often require the patent holders to offer to license their patents to any company on a basis known as Frand, or fair, reasonable and nondiscriminatory. Questions about such commitments have arisen amid a flurry of patent suits between rivals in the mobile-device market.

Apple’s lawyer wrote in the letter: “It is apparent that our industry suffers from a lack of consistent adherence to FRAND principles in the cellular standards arena.” A copy of Apple’s letter was posted online by the FOSS Patents blog. Motorola recently likened its enforcement of FRAND patents to bank robbery: “It only takes one bullet to kill.” Samsung and Motorola reportedly demanded that Apple pay a 2.4 percent and 2.25 percent royalty, respectively, illustrating what the iPhone maker called are unreasonable FRAND licensing terms.

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