Microsoft Nokia merger case focuses on domestic manufacturers ' restrictions

Sch Jian, a high-profile Microsoft Nokia merger case, is currently being reviewed by the Chinese Ministry of Commerce after a review by several countries and regions such as the US and the European Union. "Chinese companies should learn to use the rules of the game. "March 6, a mobile phone manufacturer of the industry in the" 21st Century Economic report, said that if intellectual property rights are the world's recognized rules of the game, then the use of such a merger review opportunity to express their aspirations, is the use of the rules of the game in the meaning. 21st century Economic Report reporter learned that March 3, China's antimonopoly authorities in response to Microsoft's takeover of the Nokia case, held a seminar, including the Chinese mobile phone industry companies, as well as relevant experts and industry associations. The relevant participants in the Chinese mobile phone industry chain have expressed a lot of demands, among which the core includes, firstly, the restriction on the licensing rate and the use of Frand and prohibitions, and the unreasonable use of patent rights by the Nokia and its patent assignee; second, for Microsoft to impose restrictions, The requirement is limited to Microsoft's license fee for the Android patent and the use of the ban. The Ministry of Commerce may decide on the restrictive conditions for the addition of a reduced concentration to adversely affect competition, in accordance with the "Centralized operator Review Scheme", which began in January 2010. Local corporate patents worry that Microsoft and Nokia signed a deal on equity and asset purchases on September 2 last year, which involved $7.2 billion trillion, in which Microsoft bought most Nokia equipment and services for about 5 billion dollars and paid about 2.2 billion dollars for the Nokia 10-year non-exclusive patent license. Because Nokia did not sell its vast portfolio of patents to Microsoft in the deal, it took a licensing approach to patent use, which has left many handset makers worried about their potential future as "patent rogues". Patent Rogue (Patent Troll), also known as patent cockroaches, patent sharks, refers to those who do not have substantial business, mainly through the active launch of patent infringement lawsuits to survive the company. As there is no entity business, it is also known internationally as NPE (non-practicing Datastore, not a practising entity). Nokia's sale of its handsets to Microsoft will change the balance of patent licensing in the mobile phone industry. That is because Nokia, which still has a patent, is not engaged in handset manufacturing, is no longer worried about the patent counterclaims of other handset makers, nor does it need to consider cross licensing with other peers, potentially raising its licensing fees. In fact, Nokia Legal spokesman Mark Darant said after the deal was announced: "Until now, Nokia has not a lot of licenses to its own patents, but when the handset business is stripped, we will try to license the technology." "At the Commerce Department seminar, local handset companies wanted to limit Nokia in both areas. "A mobile phone industry insiders told reporters to avoid Nokia itself become a patent rogue, while its future related patent assignee should also be within the limits. NeedleThe restrictions on Microsoft are reflected in its current patent fees for the Android phone operating system. Although the Android system is free of charge, the Microsoft core patents used in the system, including file management, communications management, and so on, still need to pay Microsoft Patent license fees. According to industry insiders, Microsoft and HTC, ZTE and other 20 companies signed the license agreement. Under the agreement, Microsoft charges about 5-20 dollars per device for mobile phones and Tablet PCs. By 2017, only Chinese companies are expected to pay Microsoft at least 3.8 billion dollars in royalties (including past sales). As competition intensifies and the rise of low-end smartphones, smart-phone prices are falling, while Microsoft's patent-charging standards are virtually unchanged, meaning that it accounts for a growing share of the cost of Chinese handset companies. A mobile phone industry source said that many of Microsoft's patents are not standard patents, but the formation of a de facto standard, hoping that the Ministry of Commerce to review the case of the acquisition of Microsoft conditions, hope that Microsoft in the future on the licensing of these patents follow the frand principle. Frand is the initials of Fair (fair), reasonable (reasonable) and non-discriminatory (non-discrimination). At present, many telecommunications organizations, including the 3GPP, when incorporating patents into telecommunications standards, require patent owners to sign statements on Frand to ensure that patent holders gain the benefits while restricting their rights, otherwise users will pay a huge price. "Some local companies want Microsoft's Android licensing fee to be kept to a certain limit, a reasonable patent license, and no discretionary use of the ban." "The mobile phone industry mentioned above said. "Restrictive terms" option in Microsoft's takeover of the Nokia deal, Microsoft's associated business was Windows Phone's mobile operating system, which Nokia sold as a mobile phone manufacturing business, a vertical integration of the industry chain. With Microsoft's mobile operating system in the global market share of only 3.4%, and the market share of up to 80% of the Andorid system is available to mobile phone manufacturers to choose, so Microsoft's acquisition after the transaction stop to authorize Windows Phone to other handset manufacturers is not high. Some industry insiders speculate that the acquisition of the Chinese Ministry of Commerce in the outcome of the review is also likely to be passed, but given the above practical concerns, do not rule out the adoption of the review at the same time, the proposed restrictive provisions. According to the Ministry of Commerce, "the concentration of business operators," the first review of such trade fairs up to 30 days, the "further review" of the time limit of 90 days, special circumstances can be extended for 60 days. China's Taiwan-related institutions have made their own decisions before the Commerce Ministry decided. February 19, Taiwan's "Fair Trade Commission" through Microsoft's acquisition of Nokia-related assets of the transaction, but added restrictions. Specifically: Microsoft is required to license mobile equipment related to the patent should not be unreasonable pricing or to give differencesThe right of the mobile device manufacturer to freely choose the mobile operating system may not be interfered with by any other means. At the same time, Nokia should be required to license the necessary patents in accordance with the principles of fairness, reasonableness and non-discrimination (Frand). If Nokia transfers its own standard-necessary patents to other companies, it should ensure that the company licenses the licensed patents in accordance with the above principles. "The licensing fees that Chinese mobile phone companies face are really too high. "One of the top five mobile phone manufacturers in the world, said to reporters. In fact, there are precedents in the US, even in the United States, when markets fail and cannot be resolved through corporate power. The decision by the U.S. Federal Court in early 2013 in the Microsoft v. Motorola case sharply reduced Motorola's claim for royalties from Microsoft. "It is obviously a more efficient choice to restrain and restrain the operators during the period of concentration review, compared with the ex-post relief to waste judicial resources and law enforcement resources." One industry insider said.