Google pact with FTC could affect other patent disputes

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Google pact with FTC could affect other patent disputes

While the focus of last week's agreement between the Federal Trade Commission and Google Inc was search, the deal's restrictions on how Google uses its patents could have a broader impact on the technology industry.

Under the deal, which ended an antitrust investigation by the FTC and disappointed many critics, Google will make only minor changes to its search business.

But Google is also now limited in when it can seek injunctions against products from rival companies that use certain of its patents.

Throughout recent smartphone wars and other major patent litigation, holders of so-called standard essential patents have been accused of using them to bully competitors into paying high licensing rates or as leverage in patent disputes.

The FTC's deal with Google clarifies the uncertainty over how standard essential patents can be used, said Colleen Chien, a professor specializing in patent law at Santa Clara University School of Law in California.

The deal set out a process by which technology makers can avoid injunctions and patent holders know they are going to get compensated, Chien said. "The FTC has deflated the power of the injunction and also the incentives to not pay that have existed."

In its case against Google, the FTC claimed that Google and its subsidiary Motorola Mobility Inc had breached commitments to standard-setting bodies to license its patents on terms that are fair, reasonable and non-discriminatory. As part of the deal, Google agreed to drop claims for injunctive relief against competitors in certain patent disputes around the world. It also agreed to submit to the jurisdiction of a court or arbitrator when disputes over payment rates arise.

Throughout the FTC's investigation, Google was represented by Susan Creighton of Wilson Sonsini Goodrich & Rosati and John Harkrider of Axinn, Veltrop & Harkrider. The FTC retained Beth Wilkinson of Paul, Weiss, Rifkind, Wharton & Garrison.

'TEMPLATE'

The FTC said Thursday that the threat of injunction by a holder of an essential patent hurts competition. The agreement with Google could be used as a "template" for other patent disputes, it said.

Unlike a court decision, the FTC's agreement with Google is not binding on other companies. But it could give leverage to defendants in disputes with essential patent holders that could be used in court.

"We know in today's world, defendants are getting more aggressive," said Matthew Woods, an antitrust and patent attorney at Robins, Kaplan, Miller & Ciresi. "Defendants will seize on this and tell courts that injunctions are something the court should not even countenance."

But the agreement with Google may not be all good news for patent users, according to Jay Jurata, an antitrust partner at Orrick, Herrington & Sutcliffe, who said that it could have unintended consequences.

The elaborate agreement allows Google to seek injunctions against companies that are unwilling to pay for a license on fair, reasonable and non-discriminatory terms. But the question of when a company is considered an unwilling licensee is one that the FTC may have unwittingly allowed holders of essential patents to manipulate, said Jurata.

"They provided a road map for other standard essential patent holders to engage in opportunistic behavior to paint otherwise willing licensees as unwilling licensees," he said.

Miller of Robins Kaplan also cautioned that the FTC's deal with Google may be unique because of the company's giant size and dominance, which can attract the attention of regulators.

"There are a lot litigants who aren't going to see this agreement as restraining them, because they don't have the same portfolio as Google," Miller said.

US regulator quits searching for Google charges - 4th January 2013

United States regulators have announced they will not be charging Google over its internet search practices.

Google had been accused of manipulating search results and abusing its market dominance to snuff out competitors.

However, the Federal Trade Commission says that after a 20-month probe it could not bring a case against the internet giant.

Despite the absence of charges surrounding Google's search business, the Commission has found that Google misused its broad patents on mobile phone technology, acquired in its takeover of Motorola, and it has ordered the company to make that technology available to rivals through license arrangements.

Google has also agreed to change some of its search and advertising practices and give advertisers access to more information about their campaigns.

FTC chairman Jon Leibowitz says the decision protects competition for US consumers.

"It ensures Americans continued access to smart phones, tablet computers and computer gaming systems, as well as a fairer playing field in Internet search and search advertising," he said.

However, rivals including Microsoft are not happy with the changes.

Google is also still under investigation from European regulators and some US states.

News...

Google pact with FTC could affect other patent disputes...

While the focus of last week's agreement between the Federal Trade Commission and Google Inc was search, the deal's restrictions on how Google uses its patents could have a broader impact on the technology industry.

Under the deal, which ended an antitrust investigation by the FTC and disappointed many critics, Google will make only minor changes to its search business.

But Google is also now limited in when it can seek injunctions against products from rival companies that use certain of its patents.

Throughout recent smartphone wars and other major patent litigation, holders of so-called standard essential patents have been accused of using them to bully competitors into paying high licensing rates or as leverage in patent disputes.

The FTC's deal with Google clarifies the uncertainty over how standard essential patents can be used, said Colleen Chien, a professor specializing in patent law at Santa Clara University School of Law in California.

The deal set out a process by which technology makers can avoid injunctions and patent holders know they are going to get compensated, Chien said. "The FTC has deflated the power of the injunction and also the incentives to not pay that have existed."

In its case against Google, the FTC claimed that Google and its subsidiary Motorola Mobility Inc had breached commitments to standard-setting bodies to license its patents on terms that are fair, reasonable and non-discriminatory. As part of the deal, Google agreed to drop claims for injunctive relief against competitors in certain patent disputes around the world. It also agreed to submit to the jurisdiction of a court or arbitrator when disputes over payment rates arise.

Throughout the FTC's investigation, Google was represented by Susan Creighton of Wilson Sonsini Goodrich & Rosati and John Harkrider of Axinn, Veltrop & Harkrider. The FTC retained Beth Wilkinson of Paul, Weiss, Rifkind, Wharton & Garrison.

'TEMPLATE'

The FTC said Thursday that the threat of injunction by a holder of an essential patent hurts competition. The agreement with Google could be used as a "template" for other patent disputes, it said.

Unlike a court decision, the FTC's agreement with Google is not binding on other companies. But it could give leverage to defendants in disputes with essential patent holders that could be used in court.

"We know in today's world, defendants are getting more aggressive," said Matthew Woods, an antitrust and patent attorney at Robins, Kaplan, Miller & Ciresi. "Defendants will seize on this and tell courts that injunctions are something the court should not even countenance."

But the agreement with Google may not be all good news for patent users, according to Jay Jurata, an antitrust partner at Orrick, Herrington & Sutcliffe, who said that it could have unintended consequences.

The elaborate agreement allows Google to seek injunctions against companies that are unwilling to pay for a license on fair, reasonable and non-discriminatory terms. But the question of when a company is considered an unwilling licensee is one that the FTC may have unwittingly allowed holders of essential patents to manipulate, said Jurata.

"They provided a road map for other standard essential patent holders to engage in opportunistic behavior to paint otherwise willing licensees as unwilling licensees," he said.

Miller of Robins Kaplan also cautioned that the FTC's deal with Google may be unique because of the company's giant size and dominance, which can attract the attention of regulators.

"There are a lot litigants who aren't going to see this agreement as restraining them, because they don't have the same portfolio as Google," Miller said.