HispanicBusiness

The European Union believes that Motorola violated the law when it used mobile phone patents to block products by competitor Apple in Germany, the bloc's executive said Monday in a preliminary opinion that could lead to hefty fines.

"The protection of intellectual property is a cornerstone of innovation and growth. But so is competition," EU Competition Commissioner Joaquin Almunia said in a statement.

"I think that companies should spend their time innovating and competing on the merits of the products they offer - not misusing their intellectual property rights to hold up competitors to the detriment of innovation and consumer choice," he added.

At issue are so-called standard essential patents, which firms must license to others in a "fair, reasonable and non-discriminatory" way because of their importance to the industry. They cover standards for wireless communication, video compression and wireless networks.

As a mobile phone pioneer, US-based Motorola had a treasure chest of some 17,000 patents and 6,800 patent applications. Its wireless arm, Motorola Mobility, was acquired by Google last year.

In a statement, the European Commission said that it believed Motorola violated EU competition rules by enforcing a court injunction against Apple in Germany even though the technology giant had agreed to pay patent royalties to its rival.

Motorola can now respond to the allegation before the commission makes its final decision.

The institution enforces the EU's competition rules, which state that no company that dominates a given market should be allowed to use its power to shut rivals out. Violators risk fines that can amount to 10 per cent of their company's annual global turnover.

Despite the Motorola acquisition, Google is not likely to have to cover such a fine, commission spokesman Jonathan Todd said.

"The fact is that most of the behaviour in question took place before the company was acquired by Google."

Microsoft has also complained to the commission over inappropriate patent use by Motorola. That case is "still under active consideration," Todd said.

The EU's top court is set to take up the industry war surrounding standard essential patents too, after a German regional court recently asked it to weigh in on a case involving the Chinese telecoms equipment makers Huawei and ZTE.