Wednesday, December 4, 2013

After U.S. DoJ, European Commission also grants fast-track clearance to Microsoft-Nokia deal

The Microsoft-Nokia transaction, which comes with a 1.65 billion euro patent license agreement, has now been approved by antitrust regulators in both partners' home jurisdictions. On Monday it became known that the United States Department of Justice (DoJ) unconditionally approved Microsoft's acquisition of Nokia's wireless devices business. The article I just linked to also mentioned approvals by regulators in India, Russia, Israel, and Turkey. Now the deal has also been cleared, unconditionally and on the fast track (Phase 1), by the European Commission. Here's the official European Commission press release. On November 22, Reuters already reported on information from sources close to the proceedings who predicted this outcome.

In my initial reaction I had already said that this deal is clearly procompetitive. No patents, except for highly product-specific design patents that affect only extreme copyists, change hand under the deal. In a mobile devices world led by Google's Android and Apple's iOS platforms, it's in the interests of competition and innovation that more muscle be put behind a third platform. While there are always companies who oppose a deal, no official complaints about the transaction were known -- presumably because it was clear from the beginning that this deal raised no issues unless competition law is suddenly turned on its head.

The deal is expected to close in early 2014, and everything appears to be on schedule.

This transaction has interesting implications from a patent licensing and ltigation perspective. In September I discussed one important effect: the creation of a cost-effective combination of patent license agreements.

Nokia will have three major strategic business areas: patent monetization, the Here maps business, and the NSN network infrastructure products. With respect to the first of these fields, Nokia is clearly making headway in its dispute with HTC. It's only a question of when, not if, HTC will have to take a royalty-bearing patent license from Nokia. On Tuesday the England and Wales High Court granted Nokia an injunction against various HTC devices. Another important Nokia v. HTC patent ruling is scheduled to come down in Munich on Friday, and I will attend the announcement.

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