FTC investigating Google, Motorola over FRAND patent abuse

Posted:
in General Discussion edited January 2014
The U.S. Federal Trade Commission on Friday issued a civil investigative demand to Google to examine whether the Android maker is illegally using standards-essential FRAND patents acquired in a takeover of Motorola Mobility to block out smartphone competitors.

According to sources familiar with the issue, the FTC is focusing on Motorola's commitment to license industry standard technology in a fair and reasonable way and whether new owner Google's ongoing FRAND-based litigation should be considered anticompetitive, reports Bloomberg.

The FTC has reportedly requested information from other tech companies that may be affected by Motorola's industry-standard 3G wireless, Wi-Fi and H.264 video streaming technologies like Apple and Microsoft in an attempt to decipher whether Google intends to license the patents fairly.

Also part of the investigation is a closer look at the litigation Motorola initiated, and Google continued after it bought the telecom in May for $12.5 billion, that could see the sales ban of devices like the iPhone and Xbox.

While a spokesman for Microsoft confirmed that the company had received a civil investigative demand, he refused to comment further and both Apple and Google did not issue statements regarding the matter.

FTC
"Man Controlling Trade" sculpture outside FTC building.
Source: FTC.gov


FRAND patents have become the heart of Android's arsenal in ongoing worldwide litigation against Apple's iPhone and iPad as well as older Motorola suits against Microsoft. Under fair and reasonable use agreements, companies that own essential patents commit to licensing the key industry-standard technologies like those associated with 3G wireless communications. The use of industry standard patents in litigation is a sticky matter and some pundits argue that governmental bodies like the FTC should not involve themselves in what are essentially contract disputes. Others, however, say that such issues are within the commission's jurisdiction given that the technologies apply to the broader market and are thus relevant in antitrust allegations.

Google acquired a litany of Motorola patents when it took over the Droid maker and has taken over the company's dispute with Apple over a Wi-Fi property currently undergoing ITC review. Depending on the outcome of the commission's findings, Apple products using the patent including the iPhone and iPad could be banned from U.S. shores.

Motorola is also complaining of the licensing practices shown by Microsoft and Apple as the company's Vice President of Intellectual Property Kirk Daily claims that the two tech giants ?seemingly won?t accept any price? for patents acquired from a group-buy of Nortel Network Corp. patents.

Friday's news comes two months after the European Commission, the EU's antitrust watchdog organization, formally opened identical investigations against Motorola at the behest of Apple and Microsoft. Google is also facing a separate FTC antitrust investigation regarding alleged anticompetitive web-based search result rankings and issues with Android handset makers.
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Comments

  • Reply 1 of 92
    apple ][apple ][ Posts: 8,360member


    Not a good week for Google, heh? :)


     


    animated-smiley-6.gif

  • Reply 2 of 92
    solipsismxsolipsismx Posts: 19,566member
    "Apple wrote:
    [" url="/t/151017/ftc-investigating-google-motorola-over-frand-patent-abuse#post_2137594"]Not a good week for Google, heh? :)

    On the contrary. This has been a great week for Google product launches and announcements. That said, it's also been a great week for Apple's legal teams.
  • Reply 3 of 92
    This looks so good on google.....
  • Reply 4 of 92
    apple ][apple ][ Posts: 8,360member

    Quote:

    Originally Posted by SolipsismX View Post





    On the contrary. This has been a great week for Google product launches and announcements. That said, it's also been a great week for Apple's legal teams.


     


    Yeah, there was that Google I/O conference, I was of course referring to the legal side of things.

  • Reply 5 of 92
    solipsismxsolipsismx Posts: 19,566member
    "Apple wrote:
    [" url="/t/151017/ftc-investigating-google-motorola-over-frand-patent-abuse#post_2137598"]
    Yeah, there was that Google I/O conference, I was of course referring to the legal side of things.

    Point taken.
  • Reply 6 of 92
    iqatedoiqatedo Posts: 1,545member


    In every single electronic device there are myriad patents.  If FRAND is abused/ignored, there is the potential to bring the whole trade in electronic systems down.  FRAND exists for a reason.  Very slippery slope to try and manipulate the market using such patents.  The FTC is investigating, however, the question is who has the authority to get this sorted out?  I kind of hope that it doesn't come down to the courts.

  • Reply 7 of 92
    Apple uses the courts to prevent competitors from copying their non-essential IP inventions. None of Apple's lawsuits prevent competitors from making competing products. The point of Apple's lawsuits is to stop companies from copying their brand-defining designs. Apple never sues to prevent anyone from using their essential patents. For those Apple charges a fair license fee.

    Google uses the courts to stop competitors from using the essential patents they own (and typically didnt invent), regardless of price. Google's lawsuits intend to prevent competitors (i.e Apple) from making any phones or tablets, no matter how unique or different they may be.

    It's amazing how in-the-wrong Google is here.
  • Reply 8 of 92
    iqatedoiqatedo Posts: 1,545member

    Quote:

    Originally Posted by MeniThings View Post



    ...It's amazing how in-the-wrong Google is here.


    Or perhaps, not so amazing.

  • Reply 9 of 92
    mac_dogmac_dog Posts: 547member


    i just keeps getting better.

  • Reply 10 of 92
    bighypebighype Posts: 148member


    Google's taken a severe beating this week! All that positive press from Google I/O has evaporated.

  • Reply 11 of 92


    Birds are coming home to roost... and they're buzzards.

  • Reply 12 of 92
    gtrgtr Posts: 3,231member

    Quote:

    Originally Posted by Apple ][ View Post


    Not a good week for Google, heh? :)


     



     


    I fixed that for you...


     


    LL.gifgoogle_logo.jpg

  • Reply 13 of 92
    aizmovaizmov Posts: 987member
    Excellent
  • Reply 14 of 92
    macarenamacarena Posts: 348member
    Is that the sound of $12.5 billion flushed down a toilet?

    This week must have been a real roller coaster ride for Google. First all the announcements at I/O - and then, right at the end, major bad news in the form of the Samsung nexus injunction. This is big news, because a stock Android phone has been banned. So the risk for Android just got ridiculously high. On top of it, these anti-trust actions.

    If Google cannot use the MMI patents aggressively, what is the use? They have only ended up with a bad situation where any attempt to do something to salvage the MMI purchase will end up hurting their partners. Without getting any benefit, whatsoever!

    I foresee a quick end game where HTC, Samsung, Motorola will agree to pay Apple stiff amounts of money for a cross license. And probably might lose out on their FRAND revenues as well in the bargain. Apple could very well cement itself in an impregnable competitive position. Despite the thermonuclear bluster, I think Apple will have no choice but to license on very stiff terms. Otherwise they might themselves face antitrust scrutiny!

    But these terms will make the MS license payments look easy!
  • Reply 15 of 92
    jragostajragosta Posts: 10,473member
    macarena wrote: »
    Is that the sound of $12.5 billion flushed down a toilet?
    This week must have been a real roller coaster ride for Google. First all the announcements at I/O - and then, right at the end, major bad news in the form of the Samsung nexus injunction. This is big news, because a stock Android phone has been banned. So the risk for Android just got ridiculously high. On top of it, these anti-trust actions.
    If Google cannot use the MMI patents aggressively, what is the use? They have only ended up with a bad situation where any attempt to do something to salvage the MMI purchase will end up hurting their partners. Without getting any benefit, whatsoever!
    I foresee a quick end game where HTC, Samsung, Motorola will agree to pay Apple stiff amounts of money for a cross license. And probably might lose out on their FRAND revenues as well in the bargain. Apple could very well cement itself in an impregnable competitive position. Despite the thermonuclear bluster, I think Apple will have no choice but to license on very stiff terms. Otherwise they might themselves face antitrust scrutiny!
    But these terms will make the MS license payments look easy!

    I can't wait for all the trolls who will tell us that:

    1. Google has never done anything wrong
    2. It is Apple who is abusing the legal system
    3. Android products don't look anything at all like Apple products
    4. Even if they do, it's because that's the only way for a cell phone to look
    5. Apple doesn't want to innovate, they only want to sue
    6. Google is a great innovator, but Apple won't let them
    7. Android is open, so it's automatically better
    8. Apple copied everything from Google
    9. Google gave away umpty zillion Android licenses (ever notice how Google talks about activations, but never talks about how many licenses were issued? I'd be willing to bet that the contract requires the handset manufacturers to enumerate the licenses, so why doesn't Google give us REAL numbers?)
    10. Since Android is free, even a unemployed World of Warcraft player living in his parents' basement can afford it, so it's better
    11. This doesn't matter because the FTC will be overturned by the courts

    Did I miss any of the regular troll arguments?
  • Reply 16 of 92
    gatorguygatorguy Posts: 18,731member

    Quote:

    Originally Posted by jragosta View Post





    I can't wait for all the trolls who will tell us that:

    1. Google has never done anything wrong

    2. It is Apple who is abusing the legal system

    3. Android products don't look anything at all like Apple products

    4. Even if they do, it's because that's the only way for a cell phone to look

    5. Apple doesn't want to innovate, they only want to sue

    6. Google is a great innovator, but Apple won't let them

    7. Android is open, so it's automatically better

    8. Apple copied everything from Google

    9. Google gave away umpty zillion Android licenses (ever notice how Google talks about activations, but never talks about how many licenses were issued? I'd be willing to bet that the contract requires the handset manufacturers to enumerate the licenses, so why doesn't Google give us REAL numbers?)

    10. Since Android is free, even a unemployed World of Warcraft player living in his parents' basement can afford it, so it's better

    11. This doesn't matter because the FTC will be overturned by the courts

    Did I miss any of the regular troll arguments?


    Nope. Sounds pretty trollish to me. Most of those wouldn't even deserve a response as they're intended only to roil the waters.


     


    I can probably answer number 9 tho since it's not a trolling question. Google is reporting activations, devices that actually made it to a user who had a carrier activate it. I don't see how that's very different from reporting sales other than it results in an under-count since devices without cellular service aren't included. What other common reason would there be for a carrier to activate a handset other than a customer buying it? If you have another reasonable explanation then please do post it.  


     


    Reporting licenses wouldn't be an accurate picture of that, since it would just be saying how many may have been built, or at least licensed to be built and nothing about how many of those were sold, either to a carrier or a consumer. I believe reporting activations is a pretty reliable report on actual sales to an end-user. 

  • Reply 17 of 92
    jragostajragosta Posts: 10,473member
    gatorguy wrote: »
    Nope. Sounds pretty trollish to me. Most of those wouldn't even deserve a response as they're intended only to roil the waters.

    I can probably answer number 9 tho since it's not a trolling question. Google is reporting activations, devices that actually made it to a user who had a carrier activate it. I don't see how that's very different from reporting sales other than it results in an under-count since devices without cellular service aren't included. What other common reason would there be for a carrier to activate a handset other than a customer buying it? If you have another reasonable explanation then please do post it.  

    Unless they count multiple activations per account. Since they've never given an exact methodology for determining their numbers, there's no way of knowing - since most of the Android vendors refuse to publicize how many units were sold.
    gatorguy wrote: »
    Reporting licenses wouldn't be an accurate picture of that, since it would just be saying how many may have been built, or at least licensed to be built and nothing about how many of those were sold, either to a carrier or a consumer. I believe reporting activations is a pretty reliable report on actual sales to an end-user. 

    Of course you believe that. You believe everything Google pays you to believe.

    Reporting the actual number of handsets made would be a very useful figure - especially since most licenses would allow you to deduct any unsold handsets.
  • Reply 18 of 92
    anonymouseanonymouse Posts: 6,558member

    Quote:

    Originally Posted by macarena View Post



    Despite the thermonuclear bluster, I think Apple will have no choice but to license on very stiff terms. Otherwise they might themselves face antitrust scrutiny!

     


     


    I disagree with this. In fact, I think it's pernicious nonsense. GG likes to come here and push this idea that Apple's patents are "essential" and therefore subject to some sort of involuntary FRAND licensing or even becoming quasi-public domain. Of course, GG is paid by Google to spread this nonsense to create the impression that Google's FRAND suits against Apple are the same as Apple's suits against Google/Android/Motorola, but it's a pathetically ridiculous argument he makes.


     


    This whole line of argument, that Apple could be forced to license their patents, because they are essential, depends on accepting an idea that Google, Samsung, et al. know isn't true but would like everyone to accept: that there is no other way to make a smartphone other than as an iPhone clone. Of course, before Apple went and did the hard and expensive R&D, everyone would have told you that there was no way to build a smartphone except as a Blackberrry clone (although, the Blackberry itself was derivative, and was essentially a clone of early Palm & Windows Mobile/Pocket PC devices).


     


    This is what the copyists would like us all to believe, that Apple's design of the iPhone is the only possible smartphone design, thus making Apple's patents "essential", and subject to forced licensing. But, this isn't at all like WiFi or 3G technology where various devices must follow standard to be able to operate on networks. Yes, all phones have to follow those standards, but, as we have seen, Blackberry, with keyboards and track balls, and iPhones with touch screens can coexist on those networks just fine. And any number of possible future designs can and will do the same... if they are made. There is no necessity for all smartphones to be iPhones, yet, this is what the Android camp (and shills like GG) would like us to believe.


     


    But, this argument, while plausible because the iPhone is so popular, is essentially bullshit. Apple's competitors would like everyone to believe it so that they can justify their lack of innovation, and their blatant copying of Apple's designs. The truth is that there are any number of possible smartphone designs, but Google, et al. are too lazy and lacking in vision to be able to do anything but copy the popular one. First they were copying Blackberry, because that was the only way to design a smartphone, then Apple showed there was a better way and they switched to copying Apple. There are other ways, but Google is too lazy, dishonest, and lacking in creativity to be able to develop them. That's the bottom line here.


     


    Forcing Apple to license their patents is to buy into a lie and reward laziness and lack of creativity.

  • Reply 19 of 92
    gatorguygatorguy Posts: 18,731member

    EDIT- duplicate
  • Reply 20 of 92
    gatorguygatorguy Posts: 18,731member

    Quote:

    Originally Posted by jragosta View Post





    Unless they count multiple activations per account. Since they've never given an exact methodology for determining their numbers, there's no way of knowing - since most of the Android vendors refuse to publicize how many units were sold.


    Yes they have. I've actually repeated it for you. You just don't listen to any voice but your own.


     


    According to Andy Rubin an activation is just what it sounds like it is. You buy a handset and the carrier activates it. Simple. That means if the device doesn't have cell service then it obviously can't be activated and doesn't get counted. That leaves some tablets out of the number. If it doesn't offer Google services, perhaps an Android fork like the Kindle Fire or an unlicensed knock-off Chinese handset then it's not a Google Android device and isn't counted either.


     


    Again according to Rubin, each device is only counted once, using it's unique device identifier number. Flashing new ROM's, selling it to another user, changing SIM cards doesn't result in another "activation". It's still the same unique device number and not counted again.


     


    Assuming he's not lying to the world, and there's absolutely no evidence he is (unless you have the smoking gun) why would the activation numbers not be painting a reasonably accurate picture of actual end-user purchases?


     


    Your idea would depend on a number of assumptions, the biggest being that Google licenses each device individually rather than issuing a blanket license for x-number of builds, and that they somehow are required to credit back for un-used licenses. 


     


    Why would you be so sure Google credits back a license, and what purpose would that serve? They don't charge for one and there's no monetary cost in either direction so why bother with it ?


     


    Now we'll give you the benefit of the doubt and assume they do. Samsung comes along and asks for a license to build 30M Galaxy 3's. When do you count those licenses as actual devices in the marketplace, and how does that directly equate to end-user purchases? At what point would Samsung need to say "we don't need the rest of the licenses you gave us so you can have the rest of these back". Two months later, 6 months? A year? How would it figure into issued license numbers from several months prior? Terrible idea that I don't believe you put much thought into if you think it would be proof of current handset sales. Even using your suggestion,  you or someone else would scream "channel stuffing, no one's actually buying them so they're not really sold"


     


    That's why reporting carrier activation numbers linked to the unique device identifier is the best way to get a picture of real end-user purchases. How many were licensed to be built, or even really built and shipped, isn't anywhere near as accurate a guage. You keep asking for real user purchase numbers. You already have them. One million per day on average at the current rate according to activation counts.

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