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2/22/2012
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Microsoft Hits Google, Motorola With Antitrust Action

Microsoft wants Motorola required to make key patents available on reasonable terms once Google completes $12.5 billion acquisition.

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Microsoft said it filed a formal complaint with European antitrust regulators Wednesday, charging that Motorola Mobility is unfairly using patents to block competition in the personal computing and mobile device markets. The complaint also named Google, which is in the process of acquiring Motorola for $12.5 billion.

Microsoft charged that Motorola is refusing to make patents essential to online video and Wi-Fi available to other vendors, including Microsoft, on what's known in the industry as fair and reasonable terms.

"Motorola and all the other firms that contributed to these standards also made a promise to one another: that if they had any patents essential to the standards, they would make their patents available on fair and reasonable terms," Microsoft deputy general counsel Dave Heiner said in a blog post Wednesday, in which he disclosed the action.

"Motorola has broken its promise," said Heiner. "In legal proceedings on both sides of the Atlantic, Motorola is demanding that Microsoft take its products off the market, or else remove their standards-based ability to play video and connect wirelessly." Motorola has sued Microsoft for patent infringement in a number of courts.

Microsoft is asking the European Commission, the European Union's antitrust body, to compel the Android phone maker to make its patents available on fair and reasonable terms, according to a source familiar with Microsoft's filing, which has not been made public. Apple, which Motorola has also targeted with patent suits, recently filed a similar action with the EC.

[ Microsoft is challenging Google in numerous areas. See Microsoft Says Google Bypasses IE Privacy Controls. ]

Microsoft said that the fees that Motorola is currently seeking for its patents relating to an online video standard known as H.264 could put the cost of computers and mobile devices out of reach for the average consumer. "For a $1,000 laptop, Motorola is demanding that Microsoft pay a royalty of $22.50 for its 50 patents on the video standard" and double that for a $2,000 laptop, said Heiner.

By comparison, Microsoft is paying a total of just 2 cents per laptop to 29 other companies who also own H.264-related patents. "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," said Heiner.

EC and U.S. antitrust authorities approved Google's $12.5 billion acquisition of Motorola Mobility last week, with approvals still pending in other jurisdictions. "Google has a chance to make a change," said Heiner.

Microsoft has filed patent claims of its own against Motorola, but Heiner said those actions related to cases of alleged infringement involving patents that do not support industry standards.

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