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FTC Clarifies Essential Patents Licensing in Google Dispute

The Federal Trade Commission (FTC) this week issued a modified final order regarding Google's standard-essential patents (SEPs) licensing practices.

The case last goes back to January, which is when Google had agreed with the FTC, in response to a final order, that it would not seek injunctions against parties wanting to license Google's SEPs. In a letter dated July 23, 2013 (PDF), the FTC described 25 comments it had received on the final order, as well as the modifications it made in response to those comments.

One change noted by the Commissioners in the letter is that negotiating parties can't delay on agreeing to a SEP license, which has to be offered under "fair, reasonable and nondiscriminatory" (FRAND) terms.

"An implementer can negotiate licensing terms without facing the threat of an injunction, but Google is not barred from responding to an implementer that misuses the protections in the Order to delay rather than facilitate entering into a FRAND license," the letter explained.

Google also can't delay its response to a FRAND licensing request. It has 60 days to respond. The letter also clarified that Google can only rescind its commitments under FRAND licensing if the associated standard has been revoked.

The backdrop to this case is Motorola Mobility's battles with Apple and Microsoft over SEPs. Google acquired Motorola Mobility last year, but Motorola Mobility before that time had locked horns over SEPs with Apple and Microsoft. The three companies -- Google, Apple and Microsoft -- essentially are fighting a mobile platform technology war that has spilled into the courts in the form of intellectual property disputes. At issue, are alleged Google Android OS patent infringements, but SEPs got dragged into the mix, too.

According to the SEP concept, intellectual property that's common to a technology standard is supposed to be available for licensing to other parties under FRAND terms. The Commission saw Google's injunction threats as being not in the public's interest per SEP and FRAND concepts, and so it got Google to back down.

Disputes over SEPs and FRAND licensing have prompted greater federal oversight of late, including a statement from the U.S. Department of Justice and the U.S. Patent and Trademark Office on how FRAND disputes should get handled. The value of SEPs is also in dispute. For instance, a U.S. district court judge overseeing an SEP dispute between Microsoft and Motorola Mobility has tried to formulate a process for assessing the royalties that should be paid.

Microsoft and Apple have separately complained to the European Commission about Google's FRAND licensing practices. So far, it's unclear how that body, which oversees the European Union's competition laws, may respond.

About the Author

Kurt Mackie is senior news producer for 1105 Media's Converge360 group.

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