Key Takeaways
1. Google holds a 5.81% market share in Japan, significantly trailing behind Apple’s 62.46%.
2. Google’s Pixel 7 smartphones are banned in Japan due to a patent violation involving Pantech.
3. The Tokyo district court ruled that Google violated a standards essential patent related to LTE modem technology.
4. Google faced criticism for delaying license negotiations and not proposing a reasonable royalty rate.
5. If negotiations with Pantech fail, Google may be forced to exit the Japanese market entirely.
Japan holds a significant place in Google’s strategy. Data from StatCounter shows that Google possesses a market share of 5.81%, putting it in second place, but it’s still far behind the Apple iPhone, which dominates with an impressive 62.46%. Google’s position is slightly better than competitors like Samsung and Xiaomi. Unfortunately, the Pixel 7 smartphones have faced a sales ban in Japan due to a patent conflict with the South Korean firm Pantech.
Court Ruling Details
According to a report by MLex, a Tokyo district court has found that Google violated a standards essential patent linked to the LTE modem used in Pixel devices. These types of patents are crucial for product manufacturing, which is why they need to be licensed under fair, reasonable, and non-discriminatory criteria. Pantech claims that Google utilized the specific method outlined in the patent to facilitate communication between Pixel phones and cell towers without securing a license.
Google’s Negotiation Issues
The court pointed out that preliminary injunctions on standard essential patents (SEPs) can only be enforced if the defendant has not made an effort to obtain a license. Google postponed negotiations and pushed for terms like a confidentiality clause, which Pantech argued was wholly unnecessary. Furthermore, during the legal proceedings, Google did not offer a “reasonable” royalty rate, stating that determining one would be “too complex.”
Implications for Google
After Google declined to share sales data for Pixel smartphones in Japan, the court enforced a sales ban on the Pixel 7 series. Pantech has already initiated legal action to stop sales of the Pixel 8 and Pixel 9, including their Pro variants. If Google cannot negotiate a settlement with Pantech, it might have to exit the Japanese market entirely.
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