Federal Judge Hangs Up On Apple’s Smartphone Antitrust Claims

Judge Barbara B. Crabb of the Western District of Wisconsin has granted Motorola Mobility Inc. partial summary judgment on antitrust counterclaims that Apple Inc. has been asserting against Motorola in the patent infringement case of Apple Inc. v. Motorola Mobility Inc.

The case stems from Apple’s release of the iPhone in 2005 without first seeking a license for the use of 3G technology developed and patented by Motorola.  Motorola proposed a patent license but, according to Apple, a high royalty rate kept Apple from signing an agreement.  

Motorola also terminated agreements it made with Qualcomm Inc., the company providing Apple with chipsets used to connect iPhones to cellular networks.  When Apple continued to sell those phones, Motorola filed the patent infringement lawsuit.

In response, Apple claimed Motorola’s actions were a violation of the Sherman Act.  According to Apple, Motorola’s high license fees and alleged interference with the Qualcomm agreement prevented fair and timely use of the 3G technology.

Apple said Motorola’s actions were especially of concern because the technology in Motorola’s patents has been deemed essential to set standards for other companies industry wide, by the European Telecommunications Standards Institute.

Judge Crabb rejected the antitrust claims because Apple – which continued to sell its popular iPhones – never suffered from an increase in costs or loss of its market share, indicating that it had not suffered any antitrust injury.

The court also reasoned that Motorola did not violate antitrust law by bringing a patent infringement action against Apple because Motorola has a First Amendment right to petition the courts for relief and the litigation was not objectively baseless.

Although the ruling removes the threat of antitrust liability, Motorola still faces Apple’s counterclaims that Motorola failed to grant patent licenses for 3G smartphone technology in a timely and nondiscriminatory manner in violation of its obligation to offer licensing under “Fair, Reasonable and Nondiscriminatory” terms (“FRAND”).   Judge Crabb agreed that Apple benefits from Motorola’s essential patents and therefore has a stake in enforcing Motorola’s promise to abide by ETSI’s intellectual property licensing rules which “protect companies that need to obtain licenses in order to practice the standards adopted by the organizations.”