U.S., E.C. Clear Google’s Acquisition of Motorola Mobility

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

The U.S. Department of Justice Antitrust Division and the European Commission (EC) on February 13 approved Google, Inc.’s proposed acquisition of Motorola Mobility, Inc., and its patent portfolio.

At the same time, the Antitrust Division announced that it had cleared the acquisitions by Apple Inc., Microsoft Corp., and Research in Motion Ltd. (RIM) of certain Nortel Networks Corporation patents, and the acquisition by Apple of certain Novell Inc. patents.

In its statement announcing the closing of the three investigations, the Justice Department said that the transactions were “not likely to significantly change existing market dynamics.” The agency, however, pledged to continue monitoring the use of standard essential patents (SEPs) in the wireless device industry.

“During the course of the division’s investigation, several of the principal competitors, including Google, Apple and Microsoft, made commitments concerning their SEP licensing policies,” the Justice Department said.

“The division’s concerns about the potential anticompetitive use of SEPs was lessened by the clear commitments by Apple and Microsoft to license SEPs on fair, reasonable and non-discriminatory terms, as well as their commitments not to seek injunctions in disputes involving SEPs. Google’s commitments were more ambiguous and do not provide the same direct confirmation of its SEP licensing policies.”

Google entered into an agreement to acquire Motorola Mobility in August 2011. Google is a provider of Internet search and online advertising services. Google is the developer of the Android open source mobile operating system. At the end of 2011, Google’s Android accounted for approximately 46 percent of the U.S. smartphone operating system platform subscribers.

Motorola Mobility is a manufacturer of smartphones and computer tablets. It is the holder of a portfolio of approximately 17,000 issued patents and 6,800 applications, including hundreds of SEPs relevant to wireless devices that Motorola Mobility committed to license through its participation in standard-setting organizations (SSOs).

Apple, Microsoft, and RIM also have developed mobile operating systems for smartphones and tablets. While Apple and RIM manufacture and sell the smartphones and tablets that run on their proprietary mobile operating systems, Microsoft licenses its proprietary mobile operating systems.

Through a partnership entitled Rockstar Bidco, RIM, Microsoft, Apple, and others sought to acquire patents at the June 2011 Nortel bankruptcy auction for licensing and distribution to certain partners. Nortel’s portfolio of approximately 6,000 patents and patent applications includes many SEPs that Nortel committed to license through its participation in SSOs.

Apple sought approval to acquire patents held by CPTN Holdings LLC, formerly owned by Novell, following CPTN’s acquisition in April 2011 of those patents on behalf of Apple, Oracle Corporation, and EMC Corporation.