When Nokia completes the sale of its telephone business to Microsoft, a transfer of its substantial patent portfolio will be conspicuously absent from the deal. Microsoft got licenses to those patents but won't buy the patents themselves. That situation immediately led to speculation that Nokia was interested in doing standalone patent-licensing when it would be mostly immune to counterattack.
As Nokia's management must surely have been aware, creating businesses that do nothing but license patents has become controversial. Whatever Nokia does, it isn't just going to become the chatter of the Internet—in Europe, antitrust regulators are watching as well.
EU antitrust chief Joaquin Almunia said in a speech on Monday that Nokia had better think twice before trying to "extract higher returns" from its patents, according to an AP report. "In other words...behave like a patent troll, or to use a more polite phrase, a patent assertion entity."
Almunia will open an antitrust lawsuit against Nokia if the company tries to take "illegal advantage" of its patents, he said.
The kinds of licensing that would be illegal, in Almunia's view, appears to be a gray area. Nokia, unlike many real "patent trolls," has a history of licensing patents to competitors as a big operating company. Almunia may expect the company to stick to those rates.
Patent attacks by a different defunct telephone company got some serious attention last month. Rockstar Consortium, which continues to be owned by Microsoft, Apple, and Blackberry, sued Google over Nortel patents purchased at auction. It looks like Almunia doesn't want to see a situation like Rockstar pop up across the pond.
UPDATE: The AP report, which says Almunia "warned Nokia not to try to become a patent troll," reflects a different tone than the text of the speech. The relevant section reads:
Since Nokia will retain its patent portfolio, some have claimed that the sale of the unit would give the company the incentive to extract higher returns from this portfolio.
These claims fall outside the scope of our review. When we assess a merger, we look into the possible anti-competitive impact of the company resulting from it. We cannot consider what the seller will do.
If Nokia were to take illegal advantage of its patents in the future, we will open an antitrust case – but I sincerely hope we will not have to.
In other words, the claims we dismissed were that Nokia would be tempted to behave like a patent troll or – to use a more polite phrase – a patent assertion entity....
You can rest assured that we are watching this space very carefully. DG competition will hold patent trolls to the same standards as any other patent holder.
A Nokia spokesperson said the company will continue to honor its patent-licensing agreements, adding:
Nokia has a long-established licensing program for our standard-essential patents, with more than 50 licensees. In most cases the licenses were agreed amicably and no regulators have yet identified any issues with how we license our patents.
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