Google Letter Seeks To Reassure Standards Groups About Plans For Motorola Patents

Google Inc. (GOOG) moved to reassure standard-setting groups that it will continue Motorola Mobility Holdings Inc. (MMI) practices for licensing patents should its deal to buy the company win regulatory approval.

But Google stopped short of ruling out the possibility of seeking injunctions against companies that infringe its patents. Such court orders, which can stop companies from selling offending products, loom as a key weapon in an array of patent suits that has broken out among big players in the smartphone market.

A letter sent by Google to more than a dozen standard-setting groups focuses on what the industry calls "essential" patents, which cover fundamental technologies necessary to make products overseen by the standards groups. Such groups usually require members to license essential patents to any company under a fair, reasonable and non-discriminatory basis, a commitment commonly known as RAND or FRAND.

In the letter, dated Wednesday, Google wrote that it would continue offering licenses for Motorola's essential patents on that basis and that it would maintain its maximum rates.

"This letter is intended to assure you and any potential licensees that, following Google's acquisition of MMI," Google wrote, referring to Motorola. "Google will honor MMI's existing commitments."

Google's letter comes as the Justice Department and European governing bodies weigh whether to allow its $12.5 billion acquisition of Motorola to move forward. Technology insiders and regulators alike have raised concerns about Google's commitment to continue licensing its patents on a fair and reasonable basis.

While Google has awaited support from regulatory agencies, Motorola has enforced at least one injunction based on a patent associated with a FRAND commitment. Last week, Apple Inc. (AAPL) was forced to temporarily suspend sales of some iPhones and iPads through its German online store. The injunction, which was handed down from a local court in Germany, was lifted in less than a day.

Google said in its letter that it would not seek injunctions against any "willing licensee," which meet certain conditions set out in the letter that include providing sales estimates and paying royalties into an escrow account. But the company added that it "reserves its right to seek any and all appropriate judicial remedies" against companies that refuse a FRAND license or breach their licensing commitments in other ways.

In its letter, Google also said it did not intend to transfer any of Motorola's FRAND patents to third parties. If it did, Google said it "will use its best efforts" to ensure that the new patent holder complies with Motorola's previous commitments.

The company also said it would maintain Motorola's maximum per-unit royalty of 2.25% of the net selling price of a device.

-Ian Sherr, Dow Jones Newswires; 415-439-6455; ian.sherr@dowjones.com

--Thomas Catan contributed to this article

Marcus and Millichap (NYSE:MMI)
Historical Stock Chart
From May 2024 to Jun 2024