Proview Sues Apple in Santa Clara Taking IPad Trademark Fight to U.S.

Proview International Holdings Ltd. (334), seeking to block shipments of Apple Inc. (AAPL)’s iPad tablet computer in and out of China, separately asked a court in California to stop the U.S. company from using IPAD trademarks.
A December 2009 agreement in which a Proview unit agreed to sell IPAD trademarks to Apple’s IP Application Development Ltd. should be canceled, Proview said in a Feb. 17 filing to the California Superior Court in Santa Clara. IP Application made “false” statements to Proview in correspondence before the agreement, the filing said.
Apple acquired Proview’s worldwide rights to the iPad trademark in 10 countries, including China, the Cupertino, California-based company said Feb. 14. Proview is refusing to honor an agreement with Apple in China, Apple said. Carolyn Wu, a Beijing-based spokeswoman at Apple, declined to comment on Proview’s U.S. lawsuit beyond the statement last week.
Graham Robinson, an agent for IP Application, used the name Jonathan Hargreaves in correspondence with Proview before the Dec. 23, 2009 agreement to acquire all of Proview’s IPAD-related trademarks for 35,000 pounds ($55,267), the court filing said.
“This statement was false and untrue,” according to the filing. Proview is seeking unspecified damages from Apple, according to the document.
Proview applied to China’s Customs Bureau to block exports as well as imports of the iPad tablet computer, Roger Xie, a lawyer for Proview, said last week.
A court in Shanghai’s Pudong district yesterday rejected Proview’s application for an injunction against sales of the iPad tablet in the city, Xie said yesterday.
The iPad tablet was introduced by Apple in 2010 and is now the second-biggest revenue generator for the company, the world’s biggest by market capitalization.
Proview shares have been suspended from trading in Hong Kong since Aug. 2, 2010, and reported a HK$2.91 billion ($375 million) loss in 2009. The company last published its results in March 2010.
The case is Proview Electronics Co. v. Apple Inc. and IP Application Development, 12-cv-219219, California Superior Court, Santa Clara County.

source

Proview held iPad rights conference: suing Apple for rights

Li Su, dark, Yang Rong Mountain, founder of Proview today jointly Jun entrepreneurial president

Proview held iPad rights conference
media Source: Sina Technology
Shenzhen Proview attorney to Ma Dongxiao instructions iPad trademark disputes between the Proview and Apple iPad rights conference held in Beijing. Yang Rong Mountain, founder of Proview at the meeting pointed out, Apple had to buy the iPad trademark of the countries of the world, the existence of fraud, is now suing Apple to protect their interests.

Proview iPad Past and Present

Rights conference held in Shenzhen Proview attracted great concern to the packed conference room, a conference room in the the Guoco law firm Beijing office, more than 60 media, many media only station finally arrived participate in a meeting at the door.

Yang Rong Mountain, founder of Proview opening the Proview production iPad product. According to him, the iPad is a product name (full name is the internet the Personal Access the Device), is also a trademark. Proview in the second half of 1998 the company began to design the iPad product R & D investment over 30 million dollars.

According to Yang Rong Mountain, iPad the Proview iFamily one of the series, 2000 and officially released. "This is a conceptual product at the time." Proview iPad in the United States does not own the trademarks, product can only be sold on an OEM basis to Hewlett-Packard (microblogging) .

The LCD screen is not widely available and the cost of expensive Proview iPad using cathode picture tube CRT monitor. Yang Rong Mountain, in dry conditions, CRT touch screen is very prone to operational error, resulting in the iPad ultimately not very successful.

Proview Proview iPad presentation materials distributed to the media scene in today's conference. According to the information provided, Proview iPad is a small desktop with a mouse, keyboard, monitor, and now sold by the Apple iPad Tablet PC is completely different. In addition, the Proview iFamily Series products also include iNote, iPDA, iDVD, iClient.

Proview to sell the iPad trademark

According to Yang Rong Mountain, Proview after the introduction of the iPad was to do a global registration of the mark, mainly involving the 31 countries of the European Union, Mexico, in other areas not able to get the iPad trademark, Panasonic registered. Apple and Proview are at peace, but in 2003 the two sides to a lawsuit, but not because of the iPad trademark.

Yang Rong Mountain, 2003, Apple wants players trademark registered in Europe, iPod, iPod and Proview iPad trademark similarity, the Proview then initiate proceedings to prevent Apple from register.

"We have gone through three years of litigation, but also spent a lot, eventually we give up to continue litigation with Apple, we withdrew its defense, this is the first battle with Apple." Yang Rong mountain does not explain why did she abandon the prosecution of Apple.

Proview development is so smooth, was among the world's top five display manufacturers, the highest annual sales revenue has reached 10 billion yuan. However, the financial crisis of 2008 Proview into a corner.

Time of financial turmoil in 2008, Proview has been tremendous damage. "Yang Rong Mountain, rights at the meeting said that the collapse of not only the two largest U.S. customer, Proview has a significant backlog of display inventory. When the average price of LCD screen quickly fell from U.S. $ 250 140 dollars, has fallen by 60 percent, eventually leading to the Proview bank debt 2 billion yuan.

Yang Rong Mountain, then only crown began to restructure the assistance of the Bank, during a British company IP Application Development came into contact with Proview, seeking to buy the iPad trademark. Later, the company proved to be the Apple set up shell companies in order to obtain the iPad trademark.

Yang Rong Mountain, recalled that the UK IP lawyer active contact with Proview, said the company referred to with the iPad very similar to the trademark requires the purchase of the trademark. Both sides initially talks iPad trademark of the European region, followed by the two sides to discuss the transfer of the global brand.

"UK IP's initial bid of £ 20,000, because that was not enough registration fee, I initially did not agree to sell." Said Yang Rong Mountain. Rejected, the UK IP if Proview does not sell, will use legal proceedings to apply for revocation of the trademark iPad Proview Proview e-mail said.

Yang Rong Mountain, Proview financial crisis in 2009, is going to shrink overseas operations, at the same time because it was the litigation "threat", so Proview Taipei companies claim to sell the iPad trademark. "Selling there is money to take, if the litigation, then I do not know how much attorney fees."

In December 2009, Yang Rong Mountain authorized employees wheat Shihong signed the relevant agreements, trademark rights and interests of 10 the price of £ 35,000 transferred to the UK IP, which involves iPad trademark.

A month later, on January 27, 2010, Apple officially released to the world the product iPad Tablet PC. Yang Rong said that at that time was "deceived" and know that the UK IP is actually Apple.

He said in today's conference, Proview is now a financial crisis, but we still did not disclose require specific compensation figures. "We are now under Chinese law to protect their interests. Claims circulating on the network of 10 billion yuan, not only the crown of the requirements, it is the views of professionals."

He also said, "Many people believe that our registered trademark, but in fact, the iPad from 1998 accompanied by Proview to today. Proview wronged," he revealed, Proview is seeking a new opportunity to stand up again, now have a restructuring plan and investment.

iPad Chinese trademark dispute

Yang Rong Mountain, iPad trademark of the transfer process, Ma Dongxiao lawyers then began iPad trademark case. He said that the iPad trademark ownership litigation, a key issue is the trademark of Apple established IP companies to buy in the end the package does not include the Chinese mainland trademarks, and Taiwan Proview can not sell the Chinese mainland trademarks.

Ma Dongxiao a live demonstration of one year Yang Rong Mountain authorize the only crown wheat Shihong, Ministry of Justice Director of Taipei company signed iPad trademark of the transfer authorization. He said that the power of attorney can prove just Proview Taipei registered iPad trademark was purchased by the UK IP, and does not include the Shenzhen Proview registered trademark iPad.

He added that the Proview Taipei and the United Kingdom IP signed a trademark transfer agreement attachments which out of several countries iPad trademark, which does include the Chinese trademark, but even if this contract is valid, but if you just signed a contract, did not fulfill the trademark the right to transfer the program, the transfer of the trademark did not take effect.

He believes that only a 'no' fruit ', Apple did not get the trademark license, openly use to today iPad trademark transfer. "So I tell you, in this case, the Trade and Industry Bureau to investigate and deal with any problems if not addressed, but is an administrative omission."

He also put aside the Shenzhen Proview as an agent to make a comment on the matter. He believes that Apple very low-level errors committed in the whole process, no due diligence of intellectual property.

"Apple is so great a company, such a stupid mistake I feel very sorry. Its lawyers may be planning in the transaction which is very good, but the intellectual property rights a link omissions, did not investigate the trademark in the end who should, this is a very a painful lesson, "said Ma Dongxiao.

He also said that the disputes between the Proview and Apple is actually a commercial war between the merchant, independent of moral. Proview is done only to protect their legitimate rights and interests according to law, there is no need to accuse it of how large level; as Apple is concerned, there is no need to accusations from the moral level, that it is how high or how low, in fact, The problem is that the commercial warfare between businessmen. "

And Jun start to refute Apple's statement

In after Ma Dongxiao speech, and Jun start Li Su, president released a statement a letter to Apple, and fight back Apple had reiterated the statement of China's trademark rights and interests. And Jun start of the statement are as follows:

Proview from 2004 to 2006 for the iPod and the iPad trademark approximation litigation with Apple in the UK, from the lawsuit after never and can not negotiate with Apple to sell the iPad mark. Apple set up a false company spent £ 35,000 bought iPad trademark obtained fraudulently improper, we commissioned a U.S. company is preparing to sue Apple.

Second, the iPad mark does not sell to Apple when Apple acknowledged that the fact that the two sides on the time of the transfer negotiations, in 2010 eight banks seized Proview Shenzhen, Apple also sent lawyers and eight banks coordination paid transfer of the trademark, is now admitted that the negotiations after Apple forced to use the iPad trademark. As for the iPad trademark is not sold to Apple, and Apple can use the iPad on the mainland trademark is not Proview companies admit does not recognize the problem, China permitted by law not allowed. When Wahaha and up can sign the contract to sell trademark dismissed by the State Administration for Industry and Commerce, iPad trademark of both fraud dispute is not a trademark holder Shenzhen Proview signed contract, Apple's present and future are impossible to China's trademark to be recognized.

Third, the courts of Hong Kong for the contract dispute between the two sides simply have not yet hearing, Apple has openly said that Hong Kong courts to support their trademark owners the right to advocate, which is to deceive public opinion of the behavior is contrary to the legal knowledge.

Fourth, Apple grounds of proceedings are under way between the two sides, citing the Hong Kong courts of temporary restraining order to prevent the enforcement of China's business sector is China's judicial contempt, when Wahaha and Danone during the proceedings up to be able to take in the BVI court provocation to the Chinese judicial sovereignty to an injunction against Wahaha, by an intermediary organization, Wahaha litigation liability to the other party to admit its mistakes ended. China's business sector according to Chinese law enforcement is a legitimate law enforcement, not serious law enforcement departments should not act, our lawyers to prosecute.

Statement of the Department of Justice’s Antitrust Division on Its Decision to Close Its Investigations of Google Inc.’s Acquisition of Motorola Mobility Holdings Inc. and the Acquisitions of Certain Patents by Apple Inc., Microsoft Corp. and Research in Motion Ltd.

WASHINGTON – The Department of Justice’s Antitrust Division issued the following statement today after announcing the closing of its investigations into Google Inc.’s acquisition of Motorola Mobility Holdings Inc., 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:

“After a thorough review of the proposed transactions, the Antitrust Division has determined that each acquisition is unlikely to substantially lessen competition and has closed these three investigations.  In all of the transactions, the division conducted an in-depth analysis into the potential ability and incentives of the acquiring firms to use the patents they proposed acquiring to foreclose competitors.  In particular, the division focused on standard essential patents (SEPs) that Motorola Mobility and Nortel had committed to license to industry participants through their participation in standard-setting organizations (SSOs).  The division’s investigations focused on whether the acquiring firms could use these patents to raise rivals’ costs or foreclose competition.  

“The division concluded that the specific transactions at issue are not likely to significantly change existing market dynamics.

“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 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.

“In light of the importance of this industry to consumers and the complex issues raised by the intersection of the intellectual property rights and antitrust law at issue here, as well as uncertainty as to the exercise of the acquired rights, the division continues to monitor the use of SEPs in the wireless device industry, particularly in the smartphone and computer tablet markets.  The division will not hesitate to take appropriate enforcement action to stop any anticompetitive use of SEP rights.”

BACKGROUND

Google/ Motorola Mobility

On Aug. 25, 2011, Google entered into an agreement to acquire Motorola Mobility, a manufacturer of smartphones and computer tablets and 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 SSOs.

Rockstar Bidco

Rockstar Bidco, a partnership that includes, among others, RIM, Microsoft and Apple, was formed to acquire patents at the June 2011 Nortel bankruptcy auction, and to license and distribute them 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 and that are relevant to wireless devices (the Nortel SEPs).  

Apple/Novell

Apple also proposes 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.  As a member of the Open Invention Network (OIN), Novell committed to cross-license its patents on a royalty-free basis for use in the open source “Linux system,” a defined term in the OIN.

Competitive Landscape

Google, Apple, Microsoft and RIM have each developed mobile operating systems for smartphones and tablets. Apple and RIM manufacture and sell the smartphones and tablets that run on their proprietary mobile operating systems.  In contrast, Microsoft licenses its proprietary mobile operating systems, Windows Phone 7 and Windows Mobile, to non-affiliated wireless handset original equipment manufacturers (OEMs).  Google, in turn, sponsors Android, a mobile operating system that it distributes to OEMs without monetary charge under an open source license.  These operating systems provide platforms for a variety of products and services offered by competing handset and tablet manufacturers, as well as, application developers.

At the end of 2011, Google’s Android accounted for approximately 46 percent of the U.S. smartphone operating system platform subscribers and Apple’s iOS was used by about 30 percent of subscribers.  RIM and Microsoft accounted for approximately 15 percent and 6 percent of the share of smartphone subscribers, respectively.

Apple’s iPad is the leading tablet in the market, although the recently introduced Android-based tablets are rapidly gaining share.  Thus far, tablets running RIM’s and Microsoft’s operating systems have a minimal presence in the marketplace.

The Importance of Standard Setting in the Wireless Industry

Today’s wireless device industry, which includes smartphones and tablets, relies on complex operating systems that allow seamless interaction with wireless communications technologies while providing audio, video and computer functionalities.

To facilitate seamless interoperability, industry participants work through SSOs collectively to develop technical standards that establish precise specifications for essential components of the technology.  For example, wireless devices typically implement a significant number of telecommunication and computer standards, including cellular air interface standards (e.g., 3G and 4G LTE standards), wireless broadband technologies (e.g., WiFi and WiMax) and video compression technologies (e.g., H.264).  As with other industries, these standards facilitate compatibility among products and provide consumers with a wider range of products and capabilities than would otherwise be available.

Often, many technologies adopted by the SSOs fall within the scope of existing patents or patent applications.  Once a patent is included in a standard, it becomes essential to the implementation of that standard, thus the term “Standard Essential Patent.”  After industry participants make complementary investments, abandoning the standard can be extremely costly.  Thus, after the standard is set, the patent holder could seek to extract a higher payment than was attributable to the value of the patented technology before the standard was set.  Such behavior can distort innovation and raise prices to consumers .  A comparable harm may also arise in situations outside of the SSO context where a patent holder’s prior actions, such as open source commitments, lead others to make complementary investments (See U.S. Department of Justice and Federal Trade Commission, Antitrust Enforcement & Intellectual Property Rights:  Promoting Innovation and Competition, April 17, 2007 at 35-6).

Most SSOs therefore require the owners of patents essential to the proposed standard that are participating in the SSO’s standard-setting activities to make disclosure and licensing commitments with respect to their essential patents.  These commitments are intended to reduce the subsequent inappropriate use of the patent rights at issue, and thus prevent disputes that can inhibit innovation and competition.  One com mon licensing requirement is to require SSO members to commit to license patented technologies essential to a standard on reasonable and nondiscriminatory (RAND) terms (for SSOs based in the United States) or on fair, reasonable and nondiscriminatory (FRAND) terms (for SSOs based outside the United States) (collectively F/RAND).  In practice, however, SSO F/RAND requirements have not prevented significant disputes from arising in connection with the licensing of SEPs, including actions by patent holders seeking injunctive or exclusionary relief that could alter competitive market outcomes.

ANALYSIS

The division’s investigations regarding the acquisitions of the Motorola Mobility and Nortel SEPs focused on whether the acquiring firms would have the incentive and ability to exploit ambiguities in the SSOs’ F/RAND licensing commitments to hold up rivals, thus preventing or inhibiting innovation and competition (The division’s analysis was limited to SEPs encumbered by F/RAND commitments).  Such hold up could include raising the costs to rivals by demanding supracompetitive licensing rates, compelling prospective licensees to grant the SEP holder the right to use the licensee’s differentiating intellectual property, charging licensees the entire portfolio royalty rate when licensing only a small subset of the patent holder’s SEPs in its portfolio, or seeking to prevent or exclude products practicing those SEPs from the market altogether.  In this analysis, the critical issue is whether the patent holder has the incentive and ability to hold up its competitors, particularly through the threat of an injunction or exclusion order.  The division’s analysis focused on how the proposed transactions might change that incentive and ability to do so.

The division concluded that each of the transactions was unlikely to substantially lessen competition for wireless devices.  With respect to RIM’s and Microsoft’s acquisition of Nortel patents, their low market shares in mobile platforms would likely make a strategy to harm rivals either through injunctions or supracompetitive royalties based on the acquired Nortel SEPs unprofitable.  Because of their low market shares, they are unlikely to attract a sufficient number of new customers to their mobile platforms to compensate for the lost patent royalty revenues.  Moreover, Microsoft has cross-license agreements in place with the majority of its Android-based OEM competitors, making such a strategy even less plausible for it.

Apple’s and Google’s substantial share of mobile platforms makes it more likely that as the owners of additional SEPs they could hold up rivals, thus harming competition and innovation.  For example, Apple would likely benefit significantly through increased sales of its devices if it could exclude Android-based phones from the market or raise the costs of such phones through IP-licenses or patent litigation.  Google could similarly benefit by raising the costs of, or excluding, Apple devices because of the revenues it derives from Android-based devices.

The specific transactions at issue, however, are not likely to substantially lessen competition.  The evidence shows that 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.  As Google’s acquisition of Motorola Mobility is unlikely to materially alter that policy, the division concluded that transferring ownership of the patents would not substantially alter current market dynamics.  This conclusion is limited to the transfer of ownership rights and not the exercise of those transferred rights.

With respect to Apple/Novell, the division concluded that the acquisition of the patents from CPTN, formerly owned by Novell, is unlikely to harm competition.  While the patents Apple would acquire are important to the open source community and to Linux-based software in particular, the OIN, to which Novell belonged, requires its participating patent holders to offer a perpetual, royalty-free license for use in the “Linux-system.”  The division investigated whether the change in ownership would permit Apple to avoid OIN commitments and seek royalties from Linux users.  The division concluded it would not, a conclusion made easier by Apple’s commitment to honor Novell’s OIN licensing commitments.

In its analysis of the transactions, the division took into account the fact that during the pendency of these investigations, Apple, Google and Microsoft each made public statements explaining their respective SEP licensing practices.  Both Apple and Microsoft made clear that they will not seek to prevent or exclude rivals’ products from the market in exercising their SEP rights.

Apple outlined its view of F/RAND in a letter to the European Telecommunications Standards Institute (ETSI) on Nov. 11, 2011, stating among other things:

“A party who made a FRAND commitment to license its cellular standards essential patents or otherwise acquired assets/rights from a party who made the FRAND commitment must not seek injunctive relief on such patents.  Seeking an injunction would be a violation of the party’s commitment to FRAND licensing.” (emphasis supplied)

Microsoft stated publicly on Feb. 8, 2012, among other things:

“This means that Microsoft will not seek an injunction or exclusion order against any firm on the basis of those essential patents.”

If adhered to in practice, these positions could significantly reduce the possibility of a hold up or use of an injunction as a threat to inhibit or preclude innovation and competition.

Google’s commitments have been less clear.  In particular, Google has stated to the IEEE and others on Feb. 8, 2012, that its policy is to refrain from seeking injunctive relief for the infringement of SEPs against a counter-party, but apparently only for disputes involving future license revenues, and only if the counterparty:  forgoes certain defenses such as challenging the validity of the patent; pays the full disputed amount into escrow; and agrees to a reciprocal process regarding injunctions.  Google’s statement therefore does not directly provide the same assurance as the other companies’ statements concerning the exercise of its newly acquired patent rights.  Nonetheless, the division determined that the acquisition of the patents by Google did not substantially lessen competition, but how Google may exercise its patents in the future remains a significant concern.

For these reasons the division continues to have concerns about the potential inappropriate use of SEPs to disrupt competition and will continue to monitor the use of SEPs in the wireless device industry, particularly as they relate to smartphones and computer tablets.  The division’s continued monitoring of how competitors are exercising their patent rights will ensure that competition and innovation are unfettered in this important industry.

All three of the transactions highlight the complex intersection of intellectual property rights and antitrust law and the need to determine the correct balance between the rightful exercise of patent rights and a patent holder’s incentive and ability to harm competition through the anticompetitive use of those rights.

Agency Cooperation

During the course of its investigation of the Google/Motorola Mobility transaction, the Department of Justice cooperated closely with the European Commission.  In addition, the Department of Justice had discussions with the Australian Competition and Consumer Commission, Canadian Competition Bureau, Israeli Antitrust Authority and the Korean Fair Trade Commission.  In connection with the investigations relating to the Nortel patent assets, the division worked closely with states of New York and California and with the Canadian Competition Bureau.

The Antitrust Division’s Closing Statement Policy

The division provides this statement under its policy of issuing statements concerning the closing of investigations in appropriate cases.  This statement is limited by the division’s obligation to protect the confidentiality of certain information obtained in its investigations.  As in most of its investigations, the division’s evaluation has been highly fact-specific, and many of the relevant underlying facts are not public.  Consequently, readers should not draw overly broad conclusions regarding how the division is likely in the future to analyze other collaborations or activities, or transactions involving particular firms. Enforcement decisions are made on a case-by-case basis, and the analysis and conclusions discussed in this statement do not bind the division in any future enforcement actions.  Guidance on the division’s policy regarding closing statements is available at: www.usdoj.gov/atr/public/guidelines/201888.htm.

Mergers: Commission approves acquisition of Motorola Mobility by Google

The European Commission has cleared under the EU Merger Regulation the proposed acquisition of Motorola Mobility, a developer of smartphones and tablets, by Google, the world's largest internet search and search advertising company and developer of Android, one of the most popular mobile operating systems. The Commission approved the transaction mainly because it would not significantly modify the market situation in respect of operating systems and patents for these devices.

Joaquín Almunia, Commission Vice President in charge of competition policy, said: "We have approved the acquisition of Motorola Mobility by Google because, upon careful examination, this transaction does not itself raise competition issues. Of course, the Commission will continue to keep a close eye on the behaviour of all market players in the sector, particularly the increasingly strategic use of patents".

All smartphones and tablets need an operating system. The Commission considered whether Google would be likely to prevent Motorola's competitors from using Google's Android operating system. The Commission's investigation showed Android helps to drive the spread of Google's other services. Consequently, given that Google's core business model is to push its online and mobile services and software to the widest possible audience, it is unlikely that Google would restrict the use of Android solely to Motorola, a minor player in the European Economic Area (EEA)1, as compared to operators such as Samsung and HTC.

All smartphones also need to adhere to certain telecommunications standards such as 3G or 4G/LTE. Motorola, as some other market participants, holds patents that are essential for these standards to operate. Access to such "standard essential" patents is therefore crucial for players on the smartphone market. However, the Commission concluded that the proposed transaction would not significantly change the existing market situation in this respect.

Finally, the Commission also examined whether Google would be in a position to use Motorola’s standard essential patents to obtain preferential treatment for its services, including search and advertising. The Commission found that Google already had many ways in which to incentivise customers to take up its services and that the acquisition of Motorola would not materially change this.

The Commission therefore concluded that the transaction would not significantly impede effective competition in the EEA or any substantial part of it.

Today's decision is without prejudice to potential antitrust problems related to the use of standard essential patents in the market in general. However, any such issues would not arise specifically as a result of the proposed transaction.

The proposed transaction was notified to the Commission on 25 November 2011. In its review, the Commission cooperated with a number of competition authorities and in particular with the U.S. Department of Justice.

Standard essential patents
Access to standard essential patents is crucial for all market players. It is for this reason that standard setting organisations require the holders of standard essential patents to license these patents to any interested third parties on fair reasonable and non-discriminatory ("FRAND") terms. The absence of such licences would hinder competitors or indeed the entire industry to the detriment of consumers and innovation. The Commission's guidelines on horizontal cooperation agreements adopted last year (see IP/10/1702 and MEMO/10/676) make clear that commitments to license on FRAND terms are crucial to ensure access to standardised technology for all interested parties.

Companies
Google is a provider of internet search and online advertising services. It also provides a number of additional online services and software products. Google's revenue is mostly derived from online advertising and to a certain extent from mobile online advertising. Google also develops and makes available an open source mobile operating system called Android, and is the leading member of the Open Handset Alliance ("OHA"), an alliance of 84 mobile and technology companies.

Motorola is a supplier of mobile devices, TV set-top boxes (STBs), end-to-end video solutions and cable broadband access solutions.

Merger control rules and procedures
The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.

The vast majority of mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).

More information on the case is available at:

http://europa.eu.int/comm/competition/mergers/cases/index/m83.html#m_6381

Full text of European Commission Vice President Joaquín Almunia's statement on Google-Motorola

I got asked on Twitter where to find the full text of European Commission Vice President Joaquín Almunia's statement, from I quoted in my previous post. While the Commission's press release is on its website, that statement was distributed to journalists but not published. So I thought I'd just post it here as a service.

Before I do, I would also like to strongly recommend reading the statement that the U.S. Department of Justice issued yesterday. Just like I did, the DoJ notes that Google's position on the use of standard-essential patents, particularly but not only in connection with injunctions, is not as unambiguous as Apple's and Microsoft's statements were. There's clearly a lot of concern over Google's stance in Washington DC as well as in Brussels.

Here's the full text of Vice President Almunia's statement:

The Commission adopted today a clearance decision in the case Google/Motorola. We concluded that the acquisition would not as such raise competition concerns. Our assessment is largely based on an analysis of whether the transaction would modify market conditions with respect to operating systems on the one hand, and patents on the other hand. Our conclusion is that there is no substantial modification as a result of the acquisition itself.

One of the issues examined by the Commission is the likely impact of the transaction on the licensing of patents. Through the acquisition of Motorola's mobile handset business, Google would acquire a large number of Motorola's patents necessary for the manufacturing of smartphones and tablets. Many of Motorola's patents which will be transferred to Google are so called "standard essential patents" relating to mobile telephony standards.

Standard essential patents and competition

Before a standard is set different technologies can compete. But once a standard has been agreed and widely adopted, the market is often de facto locked into that standard.

Certain underlying patents are necessary to produce products that comply with the standard. These "standard essential patents" are essential for the proper functioning of a particular device and are therefore essential for a product to be marketable.

"Standard essential patents" give their holders market power. This may create competition concerns because it enables them to "hold up" competitors or even an entire industry to the detriment of consumers and innovation.

To alleviate these competition concerns, standard setting organisations require that the holder of SEPs licence their SEPs to any interested third parties on fair reasonable and non discriminatory ("FRAND") terms. The Commission's Horizontal Guidelines adopted last year make clear that such FRAND commitments are crucial to ensure access to the standardised technology for all interested parties.

Our assessment of the Google/Motorola transaction
With this in mind our assessment of the Google/Motorola transaction focused in particular on the standard essential patents which will be acquired by Google.

It is important to emphasise that in assessing the merger we can only take into account the changes in market conditions which result directly from the merger. In other words: the changes which are merger specific. Motorola has already enforced standard essential patents prior to the transaction. Its maximum per-unit royalty rates are consistent and well known throughout the industry and this transaction will not change them. Our assessment is therefore that the market situation is not significantly changed by the transaction.

Today's decision does not mean that the merger clearance blesses all actions by Motorola in the past or all future action by Google with regard to the use of these standard essential patents. Our decision today is without prejudice to the legality under EU antitrust law of Motorola's past and Google's future actions. However, the question whether Motorola's or Google's conduct is compliant with EU antitrust law cannot be dealt with in the context of the merger procedure.

I have already identified issues relating to the enforcement of standard essential patents against competitors as a potential competition concern. We are aware of the increasingly strategic use of patents in the sector and are vigilant. The Commission has recently opened an antitrust investigation against Samsung with regard to its use of standard essential patents and in particular its recourse to injunctions against competitors in national courts. That review is on-going and is being dealt with as a priority.

In summary, the Commission has cleared the Google/Motorola transaction largely on the basis that the transfer of Motorola's patents to Google does not result in competition problems specifically related to the merger.

But I can assure you that the Commission will take further action if warranted to ensure that the use of standard essential patents by all players in the sector is fully compliant with EU competition law and with the FRAND commitments given to standard setting organisations. This is important so that the standard-setting process works to promote innovation for the benefit of industry and consumers.

source

Apple iPad was due to trademark issues in a multi-frame processing and industrial and commercial seized

Apple (Apple Inc) Proview Technology (Shenzhen) Co., Ltd. " iPad "trademark battle speech, and ultimately to Apple the first instance the losing end. Apple filed an appeal, but the country much of the business sector involved in the investigation around the Apple store and agents not only frame the iPad, will face a fine of an unspecified amount.

The impact of the case: many industrial and commercial departments to the investigation of violations iPad

Proview Technology (Shenzhen) Co., Ltd. v. United States Apple iPad trademark infringement case is still fermenting. According to domestic media reports, the end of last year, the Shenzhen Intermediate People's Court of first instance verdict, Apple refused to accept the appeal. The case is pending.

Although the case is still pending, but Proview Technology (Shenzhen) Co., Ltd. has Beijing Xicheng Branch Trade and Industry complaints, the department accept such infringement on Apple iPad investigation jurisdiction Apple Xidan Joy City store, or facing the industry and commerce departments out of billion tickets.

In addition to Beijing industrial and commercial departments have accepted the complaints' Proview Technology (Shenzhen) Co., Ltd., the reporter learned that Shanghai, Shenzhen, Xuzhou, Jiangsu, and more industrial and commercial departments have been infringing on Apple iPad expand the investigation.

Majority of businesses around the shelf iPad2

Apple of First Instance sentenced the iPad trademark infringement, whether to affect their sales? In this regard, the reporter visited the capital of Tai Wo Electronic City as well as some Apple product sales stores in the afternoon of yesterday (the 10th) found the counter to see less than the iPad figure.

Apple products in the Taihe Electronic City, a sales counter, the person in charge of Mr. Zhang told reporters that want to buy iPad 2 have to go to the Treasury to take the counter there is no prototype, because the business sector found will be seized.

Not dare to be placed at the counter iPad series of products, not just this one Apple product sales counter, reporter visited the the Taihe electronic city the rest of several Apple products sales counters learned not prescribed a selling iPad product because the alleged trademark infringement, the business sector is being seized.

Hebei Paul Long Carrefour Commercial Co., Ltd. Berlin store the original Apple product sales counter, the reporter did not see the iPad figure. The sales staff explained that the business sector has just checked, the iPad 2 temporary shelf sale.

Trade and Industry department seized 45 sets of infringing the iPad

Yesterday, reporter learned from the provincial capital, Xinhua District Industrial and Commercial Bureau of Economic Inspection Brigade, February 8, they received a Proview Technology (Shenzhen) Co., Ltd. attorney letter, said "Apple iPad trademark infringement.

Gao Wei, the vice-captain of the Economic Inspection Brigade, received to this letter and the other side of the trademark certificate and proof of ownership of other materials issued in view of the Apple store in Shijiazhuang market immediately with the State Administration for Industry and Commerce to verify the information.

Investigation that substantiated Proview Technology (Shenzhen) Co., Ltd. issued February 9, the Economic Inspection Brigade franchise area Apple stores and Apple sales stores to carry out immediately investigate and deal with actions of the infringing products.

Gao Wei, the alleged trademark infringement of goods shall be confiscated according to law, and impose illegal gains five times the fine.

After two days of Mopai investigated, as of 17:00 yesterday, the Economic Inspection Brigade had seized the Apple iPad 45, all of Series 2 for the iPad.

"Due to the amount of penalties for trademark infringement case as the basis for calculating the amount of illegal business, therefore, we are finishing the past two days to the confiscation of infringing the iPad several Apple stores sales records." Gao Wei, temporarily unable to disclose the specific penalties which may .