Published: 2/13/12
The Commission reviewed Google’s acquisition of Motorola Mobility Holding (MMH), including its patent portfolio containing a number of SEPs, to determine the transaction’s compatibility with competition requirements. As to the acquisition of MMH’s SEPs, the European Commission explained that “FRAND commitments essentially oblige SEP owners: (i) to make the patent in question available to all interested third parties; (ii) not to discriminate between different licensees; and (iii) to offer a license to the patent on fair and reasonable terms.” The Commission stated that FRAND commitments may be breached through threats of injunctions, which may allow a SEP holder to extract excessive royalties, impermissibly require potential licensees to agree to a package license that includes non-SEPs, or impose other onerous terms. According to the Commission, FRAND commitments constrain unearned market power because they “can prevent IPR holders from making the implementation of a standard difficult by refusing to license or by requesting unfair or unreasonable fees (in other words excessive fees) after the industry has been locked-in to the standard or by charging discriminatory royalty fees.” The Commission concluded, however, that Google’s acquisition of Motorola’s SEPs was unlikely to produce anticompetitive effects because Google’s assertion of the SEPs would be constrained by the FRAND commitments attached to those SEPs.