FTC staff recommends suing Google via antitrust law over FRAND patent abuse
The U.S. Federal Trade Commission has made a formal recommendation to its commissioners to sue Google for violation of antitrust laws after the search giant attempted to block the sale of competitors' products using standards essential patents.
According to a report by Bloomberg, the recommendation to sue Google must still be approved by a majority of the agency's five commissioners. The report noted, however, that the majority are already "inclined to sue," but aren't likely to act until after the U.S. presidential election next week.
In July, the FTC began a civil investigation into Google's efforts to block competitors over standards patents already committed to so called "Fair, Reasonable and Nondiscriminatory" licensing.
However, after paying $12.5 billion to acquire Motorola Mobility, Google has made no changes to the struggling hardware maker's efforts to block the sale of products by Apple and Microsoft, leveraging its own H.264 patents as a weapon to do so. Motorola has portrayed its lawsuits as an effort to "defend" Android against claims by Apple and Microsoft that Android infringes upon their patents, while also describing its standard essential patents as the "one bullet" needed to kill its opponents.
Both Google and Samsung (which is pursuing a similar strategy of leveraging standards essential patents to "defend" against patent infringement) are facing investigation by U.S., Asian and European regulators. Bloomberg says the FTC has focused on Google's Motorola subsidiary, while Samsung is being investigated by the Justice Department.
Both Google and Samsung each demanded royalties from Apple of more than 2.25 percent of the total price of its iOS devices, and have filed lawsuits to block the sale of Apple's products unless it pays. Both companies have argued that because they have patented technology that is required to develop devices that work on mobile networks or work with industry standard video, they can set any price for them, threatening to block the sale of their devices if they don't.
However, those patents have already been committed to FRAND licensing terms. Apple is suing Motorola and Samsung over infringement of private patents that are not part of a standard; Apple has said it simply wants to stop Android licensees from using its ideas. Similar lawsuits against Android licensees by Microsoft have sought conventional licensing terms, which the majority of Android licensees have already agreed to apart from Google's Motorola and Samsung.
After the FTC announced plans to investigate Google's patent abuse, its Motorola subsidiary dropped its entire second International Trade Commission complaint against Apple. Two weeks later, Google was said to be contemplating a settlement with the FTC over the abuse of its FRAND patents.
In August, four of the five FTC commissioners agreed to a $22.5 million fine that Google agreed to pay for ignoring security settings in Safari while telling users that the settings were being respected. The only dissenting vote, by Commissioner J. Thomas Rosch, argued that the FTC's settlement with Google was not in the public interest because it allowed Google to deny liability.
That fine was described as the largest the FTC had ever demanded from a company, although it had earlier taken $500 million from Google in a forfeiture settlement after the search giant allowed a Canadian pharmacy to illegally advertise drugs in the United States, supporting the illegal import of prescription drugs and controlled substances into the country.
According to a report by Bloomberg, the recommendation to sue Google must still be approved by a majority of the agency's five commissioners. The report noted, however, that the majority are already "inclined to sue," but aren't likely to act until after the U.S. presidential election next week.
In July, the FTC began a civil investigation into Google's efforts to block competitors over standards patents already committed to so called "Fair, Reasonable and Nondiscriminatory" licensing.
A very expensive defense for Android infringement
Google has publicly opposed the use of patents against its Android operating system program, and launched an initiative in 2010 intended to derail public support for H.264, calling the technology patent encumbered" and recommending its own freely obtainable WebM as an alternative. Google has also charged Apple in the court of public opinion with abusing patents, which it has repeatedly characterized as being limited to "rectangles and rounded corners."However, after paying $12.5 billion to acquire Motorola Mobility, Google has made no changes to the struggling hardware maker's efforts to block the sale of products by Apple and Microsoft, leveraging its own H.264 patents as a weapon to do so. Motorola has portrayed its lawsuits as an effort to "defend" Android against claims by Apple and Microsoft that Android infringes upon their patents, while also describing its standard essential patents as the "one bullet" needed to kill its opponents.
Both Google and Samsung (which is pursuing a similar strategy of leveraging standards essential patents to "defend" against patent infringement) are facing investigation by U.S., Asian and European regulators. Bloomberg says the FTC has focused on Google's Motorola subsidiary, while Samsung is being investigated by the Justice Department.
Both Google and Samsung each demanded royalties from Apple of more than 2.25 percent of the total price of its iOS devices, and have filed lawsuits to block the sale of Apple's products unless it pays. Both companies have argued that because they have patented technology that is required to develop devices that work on mobile networks or work with industry standard video, they can set any price for them, threatening to block the sale of their devices if they don't.
However, those patents have already been committed to FRAND licensing terms. Apple is suing Motorola and Samsung over infringement of private patents that are not part of a standard; Apple has said it simply wants to stop Android licensees from using its ideas. Similar lawsuits against Android licensees by Microsoft have sought conventional licensing terms, which the majority of Android licensees have already agreed to apart from Google's Motorola and Samsung.
After the FTC announced plans to investigate Google's patent abuse, its Motorola subsidiary dropped its entire second International Trade Commission complaint against Apple. Two weeks later, Google was said to be contemplating a settlement with the FTC over the abuse of its FRAND patents.
Google's other FTC issues
Google is also facing a separate FTC antitrust investigation regarding alleged anticompetitive web-based search result rankings and issues with Android handset makers. A similar recommendation to sue has been made, but no action has yet been announced.In August, four of the five FTC commissioners agreed to a $22.5 million fine that Google agreed to pay for ignoring security settings in Safari while telling users that the settings were being respected. The only dissenting vote, by Commissioner J. Thomas Rosch, argued that the FTC's settlement with Google was not in the public interest because it allowed Google to deny liability.
That fine was described as the largest the FTC had ever demanded from a company, although it had earlier taken $500 million from Google in a forfeiture settlement after the search giant allowed a Canadian pharmacy to illegally advertise drugs in the United States, supporting the illegal import of prescription drugs and controlled substances into the country.
Comments
This may be my last Forstall use, considering. I just couldn't pass up the face.
Apple is such a patent troll, they are abusing their market dominance to bully other companies...............oh................wait
Ho hum, another one of these coming up.
Google can add this cost to whatever they have already racked up as a potential write down on the Motorola purchase next year.
I think that Google could have stopped this from happening but decided to let this practise to continue as an experiment, to see how the regulators worldwide would react (or the courts). Abloddy expensive experiment.
I spent a day with a former Moto exec earlier this week. He was partly responsible for getting the company into China and developing it's Asian business. Although the meeting was completely unrelated, we ended up chatting about the demise of Moto and he explained how frustrating it was to deal with the strategic decisions made over the last 15 years. Such a shame that a really interesting and capable company was pissed away by so many poor decisions.
Although his current company isn't worth worth 12.5 b US it is approaching it and and he built that in less than 5 years in a totally different market and in reality Moto wasn't worth anything like that figure when it was sold anyway!
Quote:
Originally Posted by festerfeet
Apple is such a patent troll, they are abusing their market dominance to bully other companies...............oh................wait
Why do you use names like "Patent Troll". Apple spends lots of money creating patents and they are just protecting them. Apple can't help it if Samsung or someone else uses their patents illegally. If they can't get anywhere with negotiations, and they feel the damages are enough, then they can take them to court. Samsung is a sleazy company. Innovation is not done by copying. If Samsung just wants to reverse engineer to copy and they don't change things enough, then that's what they get. Innovation costs R&D money and time to do so. Copying costs less and that's not really innovating unless you can figure out a less costly way to do something that someone else is doing and it improves the product.
Taking someone's else's patent and changing it enough to go around a patent isn't illegal, but just simply copying it is.
Abusing FRAND is really bad. That's being discriminatory about licensing certain types of patents is illegal.
Quote:
Originally Posted by drblank
Why do you use names like "Patent Troll".
I think he's being sarcastic hence the "oh way" part.
The comments on the article about this on The Verge make for hilarious reading.
I think of what Google paid for MotoMo and how much more Apple has purchased using far less money over the years... $12.5 billion is so huge amount of money to spend that loses its enormity to our minds.
Microsoft will spend money like a drunken sailor on a one-year binge to promote the Surface craplet, and yet that will only total a single billion.
MotoMo is bleeding money at the rate of half a billion per year (not counting potential fines). What a drain this is on Google's cash and profits. Now, I know Google makes a lot of money, but that much money just going straight down the drain of any company is unhealthy. Finally, what kind of message is the employees of MotoMo getting when Google continues to buy phones and tablets from Samsung and not MotoMo?? That's a "no confidence" vote to my way of thinking.
Quote:
Originally Posted by drblank
Why do you use names like "Patent Troll". Apple spends lots of money creating patents and they are just protecting them. Apple can't help it if Samsung or someone else uses their patents illegally. If they can't get anywhere with negotiations, and they feel the damages are enough, then they can take them to court. Samsung is a sleazy company. Innovation is not done by copying. If Samsung just wants to reverse engineer to copy and they don't change things enough, then that's what they get. Innovation costs R&D money and time to do so. Copying costs less and that's not really innovating unless you can figure out a less costly way to do something that someone else is doing and it improves the product.
Taking someone's else's patent and changing it enough to go around a patent isn't illegal, but just simply copying it is.
Abusing FRAND is really bad. That's being discriminatory about licensing certain types of patents is illegal.
I was being sarcastic and will use the " /s " next time, but thought it was obvious enough for most.
Quote:
Originally Posted by festerfeet
I was being sarcastic and will use the " /s " next time, but thought it was obvious enough for most.
It was... for most.
The last paragraph you wrote is interesting. I wonder how Google justifies their new Nexus devices going to LG and Samsung when they worked closely with Moto (pre-acquisition) on the Moto Xoom, the flagship Honeycomb tablet.
Google now has a problem as a hardware maker. They have to keep LG, HTC and Samsung happy, at the cost of pissing off their own Moto engineers, in order to keep them from focusing solely, or majorly, on Windows 8 phones. All those OEMs already pay MS licensing fees for Android. Moto is the only major Android maker that is fighting MS on licensing fees. I wonder if Moto would would have settled with MS and paid them a license fee if they were not acquired by Google.
While there are avid (sometimes rabid) fans for each platform, I prefer to view this as business, which may become a $1 trillion chess match within a few years.
Quote:
Originally Posted by AppleInsider
[...] but aren't likely to act until after the U.S. presidential election next week.
There's a presidential election next week? Why haven't I heard anything about this? The race must have been so quiet!
From my understanding, neither Moto or Samsung are suing Apple over video patents.
From what I have read, Moto is suing MS over a small fragment of h.264 patented tech which related to the use of interlaced video in h.264 mp4 formats.
Apple's use of h.264 is all progressive video not interlaced, from my understanding.
Quote:
Originally Posted by Spacepower
This article is a little misleading.
From my understanding, neither Moto or Samsung are suing Apple over video patents.
From what I have read, Moto is suing MS over a small fragment of h.264 patented tech which related to the use of interlaced video in h.264 mp4 formats.
Apple's use of h.264 is all progressive video not interlaced, from my understanding.
From what I can see, you're right. MS is being sued over h.264 and Apple over wireless patents. http://appleinsider.com/articles/12/02/07/google_to_continue_motorolas_frand_licensing_that_seeks_to_monopolize_h264_umts
Quote:
Originally Posted by sennen
The comments on the article about this on The Verge make for hilarious reading.
hilarious or depressing, the verge comments have reached and by far exceeded a new level of stupidity, a total lack of comprehension of what is going on. It's a sad day where the only balanced comments you can get is from a solely apple site. we have our fair share of trolls here, as do we fanboy's, but those who argue generally come up with logical, informed and persuasive arguments. I've changed my opinion here from these arguments.
i do like the reporting on the verge, they seem the most unbiased and informed ... pity their comments have gone to shit.
Quote:
Originally Posted by t2af
hilarious or depressing, the verge comments have reached and by far exceeded a new level of stupidity, a total lack of comprehension of what is going on. It's a sad day where the only balanced comments you can get is from a solely apple site. we have our fair share of trolls here, as do we fanboy's, but those who argue generally come up with logical, informed and persuasive arguments. I've changed my opinion here from these arguments.
i do like the reporting on the verge, they seem the most unbiased and informed ... pity their comments have gone to shit.
That's partly their own fault for not making the issue clear in their reporting.
sarcasm yes.... but you could not miss it on "Real time with Bill Maher"... and almost miss it on TMZ... if it was not for that dress of Ms. (Katy) Perry's that was patterned after an Election Ballott that was filled out for Obama... that dress does make you (a-hum) want to "mark it up" in other ways...
Originally Posted by AppleInsider
However, after paying $12.5 billion to acquire Motorola Mobility, Google has made no changes to the struggling hardware maker's efforts ...
Multiple choice question: who said the following?
"This deal is getting worse all the time!"
Was it:
A. Google's board of directors (about the Motorola Mobility acquisition)?
B. Lando Calrissian in Star Wars: Episode V - The Empire Strikes Back (about the deal with Darth Vader)?
C. Both of the above?