Antitrust Law Daily Wrap Up, ANTITRUST NEWS: FTC Adds Three Weeks to Comment Period on Proposed Google and Motorola Mobility Settlement, (Feb 1, 2013)

By Tobias J. Gillett, J.D., LLM.

The FTC will extend the period for public comment on its proposed settlement order regarding Google Inc. and Motorola Mobility LLC (MMI)’s alleged use of injunctions to prevent competing technology companies from using MMI’s standard-essential patents, the FTC has announced (In the Matter of Motorola Mobility, LLC, FTC File No. 121 0120). The extension moves the deadline for comments back to February 22, 2013, from the original deadline of February 4, 2013.

Google acquired MMI in 2012, in the process obtaining MMI’s extensive portfolio of patents. The FTC alleged that Google and MMI had broken their commitments to license certain standard-essential patents owned by MMI on fair, reasonable, and non-discriminatory (FRAND) terms. Google had allegedly pursued, or threatened to pursue, injunctions in federal district court and at the United States International Trade Commission against companies seeking to use the standard-essential patents in their products, even if the companies were willing to license them on FRAND terms.

Patents become “standard-essential” through their inclusion in standards established by standard-setting organizations (SSOs) in various technology industries that apply to products produced by companies in those industries. These standards can ensure interoperability between components of a device or technology network. As part of this process, technology companies agree to license certain patents on FRAND terms, and the SSOs take into consideration which patents are able to be licensed on FRAND terms in deciding which technologies should be incorporated into the standards.

Through the use of injunctions and the threat of injunctions, an owner of standard-essential patents can force licensees to pay higher license fees to avoid litigation. This can result in higher prices to consumers, cause companies to forego pursuing innovative technologies, and weaken the standard-setting process, according to the FTC.

In the proposed settlement order, Google agrees not to seek or threaten injunctions against licensees willing to license its standard-essential patents on FRAND terms, and agrees not revoke any previously-made FRAND commitments unless all standards to which they apply have been revoked, Google no longer has an interest in the patents, or the patents are no longer enforceable, among other provisions.

Comments may be sent to FTC, Office of the Secretary, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580, or submitted electronically here.

News: Antitrust FederalTradeCommissionNews