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Wednesday, February 08, 2012, 11:25 am PT (02:25 pm ET)

Microsoft joins Apple in pledging support for injunction free, FRAND patent licensing

Microsoft has issued a public statement outlining its position regarding standards essential patents, committing itself "to always adhere to the promises it has made to standards organizations to make its standard essential patents available on fair, reasonable and nondiscriminatory terms." The move joins an effort initiated by Apple last fall, and begs for comment from Google to do the same.

Microsofts' "Support for Industry Standards" page published earlier today also outlines how the company participates in patent pools that it views to be "vitally important to the development of the Internet and to interoperability among mobile devices and other computers."

It further notes, "The international standards system works well because firms that contribute to standards promise to make their essential patents available to others on fair, reasonable and nondiscriminatory terms. Consumers and the entire industry will suffer if, in disregard of this promise, firms seek to block others from shipping products on the basis of such standard essential patents ."

Microsoft subsequently states that in addition to honoring its commitments to FRAND licensing terms for such standards-essential patents, the company "will not seek an injunction or exclusion order against any firm on the basis of those essential patents."

The company also says it "will make those essential patents available for license to other firms without requiring that those firms license their patents back to Microsoft, except for any patents they have that are essential to the same industry standard," and that "Microsoft will not transfer those standard essential patents to any other firm unless that firm agrees to adhere to the points outlined above."

Microsoft's February 2012 = Apple's August 2011

Microsofts view of standards essential patents and how they should be licensed is nearly identical in the views and recommendations Apple outlined in a letter last August addressed to the European Telecommunications Standards Institute.

Apple similarly noted that it "owns a portfolio of cellular standards essential patents relevant to certain cellular standards of ETSI and other standards setting organizations," adding that since 2007, Apple has committed to license these patents to other companies under FRAND terms

"It is apparent that our industry suffers from a lack of consistent adherence to FRAND principles in the cellular standards arena," Apple's intellectual property head Bruce Watrous wrote in the letter (embedded below).



Apple similarly outlined the need for owners of patents that are "standards essential" and "made a FRAND commitment to license its cellular standards essential patents […] must license those patents at an appropriate rate," that is, "one that is reflective of the party's portfolio of cellular standards essential patents and patent applications as compared to the total industry-wide pool of such patents and applications."

"This commitment should guide each party's initial offer, as well as the final terms of any license."

Apple also stated "a party who made a FRAND commitment to license its cellular standards essential patents […] must not seek injunctive relief on such patents. Seeking an injunction would be a violation of the party's commitment to FRAND licensing."

Apple also noted that since first disclosing a series of FRAND committed telephony patents to open mobile standards in 2007, it would be disclosing a supplemental listing of 140 Apple patents and patent applications expected to be considered essential to LTE, MTS, EDGE, GPRS and GSM. Apple notes that the patents it is contributing "include newly issued Apple patents and published applications, as well as assets acquired from third parties."

Google promises not to shake things up

Yesterday, Google issued a letter to standards organizations in what is reported to be an assurance to EU regulators and standards bodies that it will continue to license Motorola's patents under the same fair reasonable and non discriminatory or "FRAND" terms Motorola has.

The problem is that Motorola is currently waging patent wars that make a mockery of FRAND licensing, recently demanding from both Apple and Microsoft a 2.25 percent royalty on their sales related to a single patent involved with 3G/UMTS wireless standards in the case of Apple, and a single H.264 video standard patent in the case of Microsoft.

Motorola's legal strategy appears to be reflected the words of one of its legal experts, who claims that a single patent is worth at lest as much as the entire patent pool collectively, because, in his words forwarded by Motorola, "it only takes one bullet to kill."

Given the 250,000 potential patents that could be claimed against any given smartphone design, were each patent holder to make demands like Motorola already has, manufacturers would owe absurd royalties amounting to hundreds of times the cost of the device. Motorola appeared to be gunning for $1billion of Apple's revenues just for its participation in crafting one element of the design of the 3G data network the iPhone needs to connect to in order to function as a smartphone.

Google will need to clarify what it means by its promise to continue Motorola's actions, because so far, if taken literally, this would make Google into the very "hostile, organized campaign" "waged through bogus patents" weaponized to stop innovation rather than promote it, the very concerns Google made public in its "When patents attack" blog last August.

However, if Google joins Apple and Microsoft in actually honoring FRAND licensing commitments, it will have to scuttle Motorola's claims now in progress and accept that it has very little bargaining power to refuse to pay Microsoft royalties for its legacy mobile technologies, and will have to accept restrictions from Apple that limit which of the company's unique features Motorola could appropriate in its own devices.

Such a move would also further devalue Motorola as a patent trove capable of "defending Android" from its own infringement cases and winning concessions from other smartphone makers (including other Android licensees), causing Google's already incredibly large acquisition valuation for Motorola to look even more irrational.