Google On Patent Licenses, Justice Dept. To Clear Motorola Deal
Last year, mid-August, Google announced its intentions to acquire Motorola Mobility in a $12.5 billion deal. Towards the end of November, Motorola stockholders approved the merger and now the U.S. Justice Department is preparing to clear the acquisition. According to recent reports, this might happen as early as next week, but, according to sources close to the matter, the Department will keep a close eye on Google and how it manages the 17,000 patents it wins as an effect of the merger.
On the topic of patents, the Mountain View company sent out a couple of letters to several standards organizations; Google promises to license patents won from Motorola, related to key standards like 3G and H.264, after the acquisition is completed. The move comes hot on the heels of recent discoveries where, contrary to FRAND (fair, reasonable and non-discriminatory terms) Motorola is believed to ask for 2.25% out of Apple’s sales for licensing out.
“MMI is prepared to grant licenses for Essential Patent Claims with a maximum per-unit royalty of 2.25%”, said Google in its letter to the IEEE (Institute of Electrical and Electronics Engineers). Furthermore, Google “will continue to honor MMI’s past practice with regard to MMI’s maximum go-forward per-unit royalty rate.”
Apple is fighting accross courtrooms to prevent such thing from happening and clearly rejects Motorola’s demand for 2.25% of sales for the products which imply the licensed patents. Instead of requiring a fee for the Qualcomm chips inside devices, Motorola is asking for an amount relating to the final product. Apple is also trying to use the Qualcomm-Motorola license agreement in its own defense in order to show the court that the patent has been exhausted. This would mean that Apple couldn’t be sued because Qualcomm, its supplier, already has a license.