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Google-Motorola deal approved on both sides of pond

US antitrust regulator also green-lights purchase of Nortel patents by group including Microsoft, Apple as patent battle lines firm up

By CAROLINE GABRIEL

Published: 14 February, 2012

READ MORE: M&A | Google | Patents/IPR | Regulator | Android

The major mobile players solidified their positions in the patents arms race, as Google's IPR-driven acquisition of Motorola Mobility was cleared on both sides of the Atlantic, and the US Department of Justice also approved the purchase of Nortel's huge pile of patents by a group led by Microsoft, Apple and RIM.

The DoJ ruled that the Google-Motorola marriage - itself partly a response to the search giant's loss of the Nortel IPR to its key rivals - would not have a negative effect on wireless competition. The antitrust regulator said the acquisition was unlikely to give Google a dominant advantage over its competitors in key mobile IPR. While the Apple-driven consortium paid $4.5bn for Nortel's 6,000 patents, trumping Google's $900m offer, the Android controller stumped up $12.5bn for Motorola's handset and set-top box arm, which has about 17,000 mobile patents and 6,800 applications, many essential to standards.

However, in showing the green light, the DoJ was certainly not anticipating a ceasefire in the wake of the closure of 2011's major IPR transactions. In its summary report, it wrote: "Motorola Mobility has had a long and aggressive history of seeking to capitalize on its intellectual property and has been engaged in extended disputes with Apple, Microsoft and others… Google's acquisition of Motorola Mobility is unlikely to change that policy."

However, the DoJ did fire some shots across the bows of the increasingly litigious patents players. The agency said it had become concerned about the growing trend for companies to file lawsuits rather than seek licensing deals with rivals, and promised to continue to keep an eye on firms which take this route. In its statement, the DoJ said it "will not hesitate to take appropriate enforcement action to stop any anti-competitive use" of essential technology, while the European Union's Competition Commissioner, Joaquin Almunia, told reporters that vendors must not abuse their power with injunctions, and that he had not ruled out future antitrust investigations into companies employing such tactics.

Despite the strong words, the European Union's competition regulatorsalso approved the Google-Motorola merger, and imposed no conditions - even though there had been opposition to the deal from open source and consumer groups in Europe, and there are various other probes into the search leader's businesses. "If Google is allowed to dominate the mobile market it will result in higher prices for consumers and stifle innovation," John Simpson, of the Consumer Watchdog group, had warned recently, echoing the anti-Google submissions of many parties.

In a bid to reassure regulators, Google last week issued an official pledge to license Motorola's standards-essential patents according to 'Frand' (fair, reasonable and non-discriminatory) guidelines, though in a letter to 15 standards bodies, it did list various exceptions to this rule, where it would reserve the right to sue alleged infringers and ask for product bans.

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