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European Union moves to end smartphone patent wars

A Motorola Mobility logo is seen on a screen at the public unveiling of their global headquarters in Chicago, Illinois, April 22, 2014. REUT
A Motorola Mobility logo is seen on a screen at the public unveiling of their global headquarters in Chicago, Illinois, April 22, 2014. REUT

By John O'Donnell

BRUSSELS (Reuters) - The European Union's antitrust enforcer has told two top smartphone makers to stop filing aggressive patent lawsuits against rivals such as Apple, aiming to end a patent war and open the market to freer competition.

The European Commission reprimanded Motorola Mobility on Tuesday for taking such action against Apple, hoping the ruling will halt a rising tide of legal disputes among rivals vying for profit in the global smartphone market.

The EU's anti-trust enforcer also said that Samsung Electronics must keep a promise not to seek injunctions against rivals if they sign a licensing agreement.

"The so-called smartphone patent wars should not occur at the expense of consumers," said Joaquin Almunia, the European commissioner in charge of anti-trust enforcement.

The landmark ruling will help draw a line under a long-running feud between smartphone makers and a slew of legal action against rivals by manufacturers who claimed their designs had been copied.

Although no fine will be imposed on Google Inc's Motorola, the Commission ruled that the company had been wrong to seek an injunction against Apple in Germany for copying a 'standard-essential' patent, for which Apple had bought a license.

Such patents, which cover basic mobile technology such as the mechanism to make and end a phone call, have become the scene of bitter legal confrontation.

Phone companies often argue that their technology, such as Apple's slide-to-unlock keypad, should be covered by such legal protection to prevent rivals stealing a lead.

HIGH STAKES

Ever since Apple entered the market with its iPhone, smartphone makers have been seeking to mimic its success.

This has led to a series of claims and counter-claims by inventors that their technology had been stolen, including some of the basic building blocks of a mobile phone.

"The EU is being the voice of reason," said Ben Wood of advisory firm CCS Insight. "Smaller phone makers can no longer afford to get into protracted legal battles over patents. Essential patents, such as making a mobile phone connect to a mobile network, must be available.

"We forecast that over 1.2 billion smart phones will be sold worldwide this year and this means the stakes are high."

The Commission ordered Motorola to resolve its dispute with Apple in Europe at the negotiating table, not in the courtroom.

"While patent holders should be fairly remunerated for the use of their intellectual property, implementers of such standards should also get access to standardized technology," said Almunia.

The patent wars between tech companies, which also include Microsoft, Nokia and smaller rivals, underscore the fierce battle for market share in the lucrative mobile phone industry.

The world's top smartphone makers, Samsung and Apple, are suing each other in more than 10 countries.

(Additional reporting by Jan Strupczewski; Editing by Larry King and Susan Fenton)

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