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FTC, Google finalize antitrust settlement over Motorola's standard-essential patents

post #1 of 33
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The U.S. Federal Trade Commission announced on Wednesday that it has reached an agreement with Google in which it will license standard-essential patents it obtained from Motorola under FRAND terms.

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Google faced charges from the FTC asserting that the search giant's business practices could stifle competition among competing manufacturers of electronic devices, such as Apple. The company was accused of backing off commitments to license standard-essential patents under fair, reasonable and non-discriminatory terms.

Instead, Google either pursued or threatened to pursue injunctions against competing products for alleged patent infringement, rather than offering FRAND licensing deals for those patents in question.

In a letter sent out to those who provided public comment on the case, the FTC said the order "strikes a balance" that enables Google to negotiate FRAND rates while protecting outside parties from "opportunistic behavior" that does not align with the principles of FRAND.

"An implementer can negotiate licensing terms without facing the threat of an inunction, 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 FTC said. "In addition, Google has recourse if an implementer refuses to take steps to obtain a FRAND license, or to enter into a license after a FRAND rate is determined. Like any other licensor, Google also has the right to seek treble damages for willful infringement."

The finalization of the case formally brings to a close the antitrust investigation. Google had agreed to license Motorola's FRAND patents back in January, but its concessions required FTC approval.

Last year, Google was also slapped with the largest fine in FTC history for bypassing privacy settings in Apple's Safari browser. The record $22.5 million fine was assessed for ignoring security settings designed to prevent advertisers from tracking users with cookies.
post #2 of 33
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post #3 of 33
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Originally Posted by AppleInsider View Post

Last year, Google was also slapped with the largest fine in FTC history for bypassing privacy settings in Apple's Safari browser. The record $22.5 million fine was assessed for ignoring security settings designed to prevent advertisers from tracking users with cookies.

And, yet, the shills still defend everything Google does.
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post #4 of 33
So what, exactly, did Google get for their $12.5 billion when they bought Moto?
A bunch of FRAND-encumbered patents that will earn a mere trickle of licensing fees.
And a hardware maker that bleeds cash (5th straight quarter of losses, by the way.)
Good job. Keep it up.

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post #5 of 33
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Originally Posted by SockRolid View Post

So what, exactly, did Google get for their $12.5 billion when they bought Moto?
A bunch of FRAND-encumbered patents that will earn a mere trickle of licensing fees.
And a hardware maker that bleeds cash (5th straight quarter of losses, by the way.)
Good job. Keep it up.

The purchase was never intended to give Google a war-chest of patents to assert against competitors. In fact there's not been a single new patent infringement case filed by Moto since Google became the owner. It's just not in their DNA to be aggressive with IP. The purchase was defensive.
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post #6 of 33
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Originally Posted by Gatorguy View Post

The purchase was defensive.

Defensive? I thought Larry said he liked the clamshell phone design of the 90's, and wanted it back (if memory serves me)
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post #7 of 33
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Originally Posted by PhilBoogie View Post

Defensive? I thought Larry said he liked the clamshell phone design of the 90's, and wanted it back (if memory serves me)

Could be. Maybe Google just wanted to buy them to resurrect flip-phones.1smile.gif

Edit: Sammy is reportedly releasing one in the next few weeks!
Edited by Gatorguy - 7/24/13 at 12:45pm
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post #8 of 33

The FTC order clarifies under what conditions Google can request an injunction. Simplified:

 

  1. Google must present an offer to the licensee.  They can offer the licensee a better deal if there is cross-licensing, but they cannot require it.   If negotiations last more than six months, Google can then go to the next step:
  2. Google can request binding arbitration... and the licensee must agree to accept whatever a court or an arbitrator determines as a FRAND rate.
  3. If the licensee refuses to negotiate, or fails to respond to the arbitration request, or refuses to honor the decided rate, then Google can pursue an injunction.

 

This is the same basic concept that other legal entities such as the ITC have already used.

 

For example, when the ITC recently ruled for a ban on Apple products, they commented that it was because Apple had failed both to negotiate or to take advantage of ETSI arbitration aid.

 

This is a win for common sense.  Instead of potential licensees delaying payments indefinitely by dragging cases through the courts complaining about "unfair" rates, or SEP holders asking for high rates using an injunction threat, they both now have to make a deal in a rather short period of time.  

 

In addition, the SEP holder's basic patent rights are maintained, by allowing injunctive relief if a fair deal and payments are not eventually made.


Edited by KDarling - 7/24/13 at 1:00pm
post #9 of 33
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Originally Posted by Gatorguy View Post


The purchase was never intended to give Google a war-chest of patents to assert against competitors. In fact there's not been a single new patent infringement case filed by Moto since Google became the owner. It's just not in their DNA to be aggressive with IP. The purchase was defensive.

No the purchase was supposed to help them break into the hardware market and screw their OEMs all under the guise of protecting them. Google was hoping the Android market would mirror the PC market with many OEMs in the game but none becoming dominant. They could then launch Google/Motorola branded hardware and slowly eat their young.

 

Samsung ruined this plan by beating them to the punch and crushing the other OEMs. Now Google is screwed because unless they can suddenly and miraculously get their hardware plans together it is only a matter of time before Samsung forks Android and takes over the market. At the very least Samsung has too much muscle to now be shoved out of the market by Google as they have all the Android profits falling into their coffers!!!

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post #10 of 33
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Originally Posted by KDarling View Post

The FTC order clarifies under what conditions Google can request an injunction. Simplified:

 

  1. Google must present an offer to the licensee.  They can offer the licensee a better deal if there is cross-licensing, but they cannot require it.   If negotiations last more than six months, Google can then go to the next step:
  2. Google can request binding arbitration... and the licensee must agree to accept whatever a court or an arbitrator determines as a FRAND rate.
  3. If the licensee refuses to negotiate, or fails to respond to the arbitration request, or refuses to honor the decided rate, then Google can pursue an injunction.

 

This is the same basic concept that other legal entities such as the ITC have already used.

 

For example, when the ITC recently ruled for a ban on Apple products, they commented that it was because Apple had failed both to negotiate or to take advantage of arbitration aid.

 

This is a win for common sense.  Instead of potential licensees delaying payments indefinitely by dragging cases through the courts complaining about "unfair" rates, or SEP holders asking for high rates, they both now have to make a deal in a rather short period of time.  

 

So the FTC ruling says that Google has to basically follow the same rules as everyone else?

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post #11 of 33
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Originally Posted by John.B View Post

So the FTC ruling says that Google has to basically follow the same rules as everyone else?

Yup. Some of the others get around it by placing their SEP-pledged patents with a "patent troll" to do the dirty work for them. That way they get deniability and can make believe they have clean hands.
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post #12 of 33
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Originally Posted by AppleTechSpot View Post

No the purchase was supposed to help them break into the hardware market and screw their OEMs all under the guise of protecting them. Google was hoping the Android market would mirror the PC market with many OEMs in the game but none becoming dominant. They could then launch Google/Motorola branded hardware and slowly eat their young.

Really? And where did you read that?
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post #13 of 33
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Originally Posted by John.B View Post

So the FTC ruling says that Google has to basically follow the same rules as everyone else?

 

It's a new rule.

 

It says that Google and Apple have to make a deal instead of tying up the courts.

 

Everything has been leading towards this.  I've commented many times that forced arbitration makes far more sense than having to resort to injunctions, but there was no forced arbitration before.

 

Now there is (or at least the equivalent of it).

post #14 of 33
Quote:
Originally Posted by SockRolid View Post

So what, exactly, did Google get for their $12.5 billion when they bought Moto?
A bunch of FRAND-encumbered patents that will earn a mere trickle of licensing fees.
And a hardware maker that bleeds cash (5th straight quarter of losses, by the way.)
Good job. Keep it up.

 

At $12.5 billion, even if Google bought Motorola just for their 24,500 patents, that's $510,000 per patent.

 

However, Moto didn't cost as much as some people continue to blindly repeat. It came with $3 billion in cash reserves, and the settop box part is being sold off for $2.5 billion... which knocks the cash price down to $7 billion.  Plus Google gets billions in tax write offs... some analysts say enough to cover the entire purchase... AND they got a phone maker with decades of knowledge.

 

On the other hand, Apple, Microsoft and RIM paid $4.5 billion for 6,000 Nortel patents.  That's $750,000 per patent (many of which also come with FRAND restrictions), and that's all they got for their money.

 

Which deal looks better?

 

post #15 of 33
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Originally Posted by Gatorguy View Post


Really? And where did you read that?

I didn't read it anywhere. It is called using my brain and deducing for myself based on Google's behavior to date. Do you only believe something if you read it from some Google/Samsung troll somewhere on the internet?

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post #16 of 33
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Originally Posted by Gatorguy View Post

Edit: Sammy is reportedly releasing one in the next few weeks!

Wow. Just wow.



Samsung Galaxy Folder is on the way. Low end Android clamshell for Korea
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post #17 of 33
Quote:
Originally Posted by KDarling View Post

Quote:
Originally Posted by John.B View Post

So the FTC ruling says that Google has to basically follow the same rules as everyone else?

 

It's a new rule.

 

It says that Google and Apple have to make a deal instead of tying up the courts.

 

Everything has been leading towards this.  I've commented many times that forced arbitration makes far more sense than having to resort to injunctions, but there was no forced arbitration before.

 

Now there is (or at least the equivalent of it).

 

Thanks, I missed the part where the arbitration process was added.  My bad.

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post #18 of 33
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Originally Posted by KDarling View Post

AND they got a phone maker with decades of knowledge.

 

...who have brought us amazing, ground breaking, innovative phones such as the...... errrrr......erm.......nope.

post #19 of 33
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Originally Posted by KDarling View Post

 

At $12.5 billion, even if Google bought Motorola just for their 24,500 patents, that's $510,000 per patent.

 

However, Moto didn't cost as much as some people continue to blindly repeat. It came with $3 billion in cash reserves, and the settop box part is being sold off for $2.5 billion... which knocks the cash price down to $7 billion.  Plus Google gets billions in tax write offs... some analysts say enough to cover the entire purchase... AND they got a phone maker with decades of knowledge.

 

On the other hand, Apple, Microsoft and RIM paid $4.5 billion for 6,000 Nortel patents.  That's $750,000 per patent (many of which also come with FRAND restrictions), and that's all they got for their money.

 

Which deal looks better?

 

 

I would say the one that came without the cash-burning albatross attached. But that's just me.

post #20 of 33
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Originally Posted by AppleTechSpot View Post

I didn't read it anywhere. It is called using my brain and deducing for myself based on Google's behavior to date. Do you only believe something if you read it from some Google/Samsung troll somewhere on the internet?

What in Google's behavior shows they're likely to kick partners to the curb? Perhaps you've confused them with a different tech leader.
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post #21 of 33
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Originally Posted by Gatorguy View Post


The purchase was never intended to give Google a war-chest of patents to assert against competitors. In fact there's not been a single new patent infringement case filed by Moto since Google became the owner. It's just not in their DNA to be aggressive with IP. The purchase was defensive.

That's pure fresh male bovine excretion. Google signed on as the second party doing the suing; that is to say they elbowed their way into the suits waving the Google flag. Google fully intended to use the patents to give themselves power in an un-FRANDly way. This was especially obvious in the Gppgle/MotoMo suits in Europe. If they wanted MotoMo to shill for them by suing as their front man, they didn't need to add their name to the actions.

post #22 of 33
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Originally Posted by PhilBoogie View Post


Wow. Just wow.



Samsung Galaxy Folder is on the way. Low end Android clamshell for Korea

 

Further proof that Samsung will throw ANYTHING against the wall to see if it'll stick. Does anyone see any long term strategy in Samsung's offerings other than taking any and all prototypes to production???

 

The image in the second photo is answering the question, "How many Samsung engineers does it take to change a light bulb?"

post #23 of 33
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Originally Posted by John.B View Post

 

Thanks, I missed the part where the arbitration process was added.  My bad.

 

It was easy to miss. Essentially the judge hauled Google into his chambers where he slapped them around a bit, repeating, "You can't do that you ignorant fucks!!!"

post #24 of 33
Quote:
Originally Posted by Gatorguy View Post

What in Google's behavior shows they're likely to kick partners to the curb? Perhaps you've confused them with a different tech leader.

Right. So offering their own line of phones and tablets which are state of the art and which happen to be almost the only devices which can be upgraded to newer versions of Android is actually GOOD for their OEMs who have to compete with them. I'm sure that OEMs just LOVE having to compete with the company that provides them with their OS.

Right. 1oyvey.gif
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post #25 of 33
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Originally Posted by Gatorguy View Post


What in Google's behavior shows they're likely to kick partners to the curb? Perhaps you've confused them with a different tech leader.

 

Seriously?

 

How about putting out hardware (ie smartphones and tablets) that directly compete with Android hardware partners, all but one of which is losing money on the proposition?

 

I know, Microsoft is doing it now too, but that's born out of desperation. What excuse can Google give to, say, HTC?

post #26 of 33
And now if the FTC can do the same with Samsung.
post #27 of 33
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Originally Posted by Macky the Macky View Post

The image in the second photo is answering the question, "How many Samsung engineers does it take to change a light bulb?"

Without Apple showing how it's done? I'd say none. Or all, until it's shown.
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post #28 of 33
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Originally Posted by KDarling View Post

At $12.5 billion, even if Google bought Motorola just for their 24,500 patents, that's $510,000 per patent.



 



However, Moto didn't cost as much as some people continue to blindly repeat. 
It came with $3 billion in cash reserves, and the settop box part is being sold off for $2.5 billion... which knocks the cash price down to $7 billion.  Plus Google gets billions in tax write offs... some analysts say enough to cover the entire purchase... AND they got a phone maker with decades of knowledge.



 



On the other hand, Apple, Microsoft and RIM paid $4.5 billion for 6,000 Nortel patents.  That's $750,000 per patent (many of which also come with FRAND restrictions), and that's all they got for their money.



 



Which deal looks better?



 



You mean when one pay less the deal is better but not the quality of the patents.

Some people know the price of everything but the value of none.
post #29 of 33
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Originally Posted by AdamC View Post

You mean when one pay less the deal is better but not the quality of the patents.

Some people know the price of everything but the value of none.

Spot on. Touché. Bingo.
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post #30 of 33
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Originally Posted by jragosta View Post

Right. So offering their own line of phones and tablets which are state of the art and which happen to be almost the only devices which can be upgraded to newer versions of Android is actually GOOD for their OEMs who have to compete with them. I'm sure that OEMs just LOVE having to compete with the company that provides them with their OS.

Right. 1oyvey.gif

You apparently don't follow industry news very well JR. Doesn't Google sell Samsung's stock Android S4?. Promote HTC's stock Android HTC One on Google Play. Used Asus rather than their own Motorola to build the Nexus 7? Used LG rather than their own Moto to build the Nexus 4? Yeah, hardly a history of ignoring their OEM's and favoring their own products and Motorola.

Now think really hard. Can you come up with a tech company who trumpets partnerships at product introductions, only to kick them to the curb as soon as they can replace them with their own in-house services?
Edited by Gatorguy - 7/24/13 at 5:33pm
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post #31 of 33
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Originally Posted by AppleTechSpot View Post

No the purchase was supposed to help them break into the hardware market and screw their OEMs all under the guise of protecting them. Google was hoping the Android market would mirror the PC market with many OEMs in the game but none becoming dominant. They could then launch Google/Motorola branded hardware and slowly eat their young.

 

Samsung ruined this plan by beating them to the punch and crushing the other OEMs. Now Google is screwed because unless they can suddenly and miraculously get their hardware plans together it is only a matter of time before Samsung forks Android and takes over the market. At the very least Samsung has too much muscle to now be shoved out of the market by Google as they have all the Android profits falling into their coffers!!!

 

Bingo. Any one who thinks Google plays defense only is either a shill or an ignoramous.

post #32 of 33
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Originally Posted by Gatorguy View Post

You apparently don't follow industry news very well JR. Doesn't Google sell Samsung's stock Android S4?. Promote HTC's stock Android HTC One on Google Play. Used Asus rather than their own Motorola to build the Nexus 7? Used LG rather than their own Moto to build the Nexus 4? Yeah, hardly a history of ignoring their OEM's and favoring their own products and Motorola.?

This is why everyone here thinks you're a paid shill. It's impossible to believe that you could possibly be that clueless.

Just a couple of things you ignore:

1. Let's say LG makes and sells their own high end phone. They sell it for $600 and it costs $400 to make. 33% gross margin. Now, Google says "we'll buy a million Nexus devices, but we'll pay you $450. So LG makes less than 10% (which doesn't even cover overheads).

2. Nexus devices often have Android updates available. Very few non-Nexus devices do. Google has a major advantage against their licensees.

3. it's also about branding and name recognition. When Google puts Nexus on all the reference devices, consumers don't realize that it's made by Asus or LG or anyone else. Google gets the marketing value.

It's absolutely insane to think that OEMs would rather make Nexus branded products for Google than make their own products. It's exactly why Apple stopped licensing Mac OS licensees. It doesn't work when the OS owner competes with licensees.
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post #33 of 33
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Originally Posted by AdamC View Post

You mean when one pay less the deal is better but not the quality of the patents.

Some people know the price of everything but the value of none.

 

Ah well, it's easy to throw out a cute saying, especially when you bring absolutely no facts to back it up.

 

So here's your chance to prove yourself, by explaining to us all in detail why you think those Nortel patents are "better quality" than the Motorola patents, to the tune of a quarter million dollars more apiece.

 

Hint: the problems you're going to have, are at least two fold.  First, the money-making parts of Nortel and the related patents were bought by Ericsson before the auction.

 

Secondly, much of the remaining patents were LTE related.   Most analyses I've seen of who owns the best LTE patents end up like this one:

 

Quote:

(LG first, with 23%.  Qualcomm second, with 21%)

 
"Four companies basically tied for third place by each claiming 9% of essential LTE patents. They are Motorola Mobility, InterDigital, Nokia and Samsung. The value of both Motorola Mobility’s and InterDigital’s patents has already been well-publicized. Motorola attracted an acquisition offer from Google in August, largely due to its patent holdings."
...
"China’s ZTE has 6% of the LTE patents"
...
"while Nortel, a Canadian telecom company that filed for bankruptcy in 2009, owned 4%."
 
- Forbes, Identifying the Tech Leaders in LTE Wireless Patents

 

Looking forward to your own fact finding results, and hopefully a debate without ad hominems substituting for data.  Thanks!
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