The Fair Trade Commission (FTC), South Korea’s antitrust authority, has conditionally approved Microsoft’s acquisition of Nokia’s handset business. The conditions attached to the merger require Microsoft to cap the royalties payable by major Korean handset manufacturers \u2014 Samsung and LG \u2014 for Nokia patents. The agreement between Microsoft and Nokia permits Microsoft to manufacture handsets and tablets directly on the basis of its broad patent portfolio.<\/p>\n
Microsoft submitted its request for the acquisition of Nokia’s mobile division in November, 2013. The regulator accepted the request and initiated a formal review process to assess potential market distortions and ensure fair competition. Microsoft’s Windows phones did not directly compete with domestic handset manufacturers; however, the post-merger entity would be in direct competition with Android device manufacturers such as Samsung and LG. The FTC sought to ensure that Microsoft did not discriminate against local handset manufacturers by exploiting its broad portfolio of Standard Essential Patents (SEP), which bear upon the operation of Android-based devices.<\/p>\n
Microsoft has agreed to charge Korean handset manufacturers royalties on the basis of the fair, reasonable and non-discriminatory (FRAND) principle for a period of seven years. No charges above the agreed cap will be levied during that period. The Chinese Ministry of Commerce had earlier approved the deal subject to a similar condition that royalty payments for domestic smartphone manufacturers would not increase.<\/p>\n
Industry observers suggest that the FTC’s conditional approval may also assist Microsoft in resolving its ongoing patent dispute with Samsung. Microsoft had filed proceedings against Samsung in relation to outstanding royalty payments. Samsung paid royalties to the tune of $1 billion to Microsoft for the use of Android patents held by Microsoft.<\/p>\n
This article is for general information and does not constitute legal advice. Readers should consult a qualified attorney before acting on any matter discussed here.<\/p>\n","protected":false},"excerpt":{"rendered":"
The South Korean FTC conditionally approved Microsoft\u2019s acquisition of Nokia\u2019s handset business, limiting patent royalties for local manufacturers. The deal mandates Microsoft to adhere to FRAND terms for the next seven years, ensuring fair competition for Korean handset makers.<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":34,"footnotes":""},"categories":[6,22],"tags":[7028,7027,7024,7023,7025,149,1087],"class_list":["post-21129","post","type-post","status-publish","format-standard","hentry","category-intellectual-property","category-ip-commercialization-licensing","tag-antitrust-regulation","tag-frand-principle","tag-ftc-approval","tag-microsoft-nokia-merger","tag-patent-royalties","tag-samsung","tag-standard-essential-patents"],"_links":{"self":[{"href":"https:\/\/www.bananaip.com\/intellepedia\/wp-json\/wp\/v2\/posts\/21129","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bananaip.com\/intellepedia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bananaip.com\/intellepedia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bananaip.com\/intellepedia\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bananaip.com\/intellepedia\/wp-json\/wp\/v2\/comments?post=21129"}],"version-history":[{"count":4,"href":"https:\/\/www.bananaip.com\/intellepedia\/wp-json\/wp\/v2\/posts\/21129\/revisions"}],"predecessor-version":[{"id":149737,"href":"https:\/\/www.bananaip.com\/intellepedia\/wp-json\/wp\/v2\/posts\/21129\/revisions\/149737"}],"wp:attachment":[{"href":"https:\/\/www.bananaip.com\/intellepedia\/wp-json\/wp\/v2\/media?parent=21129"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bananaip.com\/intellepedia\/wp-json\/wp\/v2\/categories?post=21129"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bananaip.com\/intellepedia\/wp-json\/wp\/v2\/tags?post=21129"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}