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

Posted:
in General Discussion edited January 2014
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.

Google


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.
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Comments

  • Reply 1 of 33
    philboogiephilboogie Posts: 7,435member
    "If it breaks when you bend, you better not put it in"
  • Reply 2 of 33
    jragostajragosta Posts: 10,473member
    Last year, Google was also slapped with the <a href="http://appleinsider.com/articles/12/08/09/google_agrees_to_pay_largest_fine_in_ftc_history_for_bypassing_safari_privacy_settings">largest fine</a> 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.
  • Reply 3 of 33
    sockrolidsockrolid Posts: 2,788member
    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.
  • Reply 4 of 33
    gatorguygatorguy Posts: 19,805member
    sockrolid wrote: »
    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.
  • Reply 5 of 33
    philboogiephilboogie Posts: 7,435member
    gatorguy wrote: »
    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)
  • Reply 6 of 33
    gatorguygatorguy Posts: 19,805member
    philboogie wrote: »
    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.:)

    Edit: Sammy is reportedly releasing one in the next few weeks!
  • Reply 7 of 33
    kdarlingkdarling Posts: 1,640member


    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.

  • Reply 8 of 33

    Quote:

    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!!!

  • Reply 9 of 33
    john.bjohn.b Posts: 2,716member

    Quote:

    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?

  • Reply 10 of 33
    gatorguygatorguy Posts: 19,805member
    john.b wrote: »
    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.
  • Reply 11 of 33
    gatorguygatorguy Posts: 19,805member
    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?
  • Reply 12 of 33
    kdarlingkdarling Posts: 1,640member

    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).

  • Reply 13 of 33
    kdarlingkdarling Posts: 1,640member

    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?


     

  • Reply 14 of 33

    Quote:

    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?

  • Reply 15 of 33
    philboogiephilboogie Posts: 7,435member
    gatorguy wrote: »
    Edit: Sammy is reportedly releasing one in the next few weeks!

    Wow. Just wow.

    700 700

    Samsung Galaxy Folder is on the way. Low end Android clamshell for Korea
  • Reply 16 of 33
    john.bjohn.b Posts: 2,716member

    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.

  • Reply 17 of 33
    evilutionevilution Posts: 1,342member

    Quote:

    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.

  • Reply 18 of 33
    pdq2pdq2 Posts: 270member

    Quote:

    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.

  • Reply 19 of 33
    gatorguygatorguy Posts: 19,805member
    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.
  • Reply 20 of 33

    Quote:

    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.

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