FTC will likely file a lawsuit against Google for patent abuse, according to report

Google is already in hot waters with the European Union and is being looked at by the United States Federal Trade Commission for allegations of anti-competitive behavior in regards to Google Search. Now reports are emerging that staff at the United States Federal Trade Commission, aka FTC, have formally recommended to FTC commissioners to start a probe into Google for abuse of FRAND patents.

Quoting “four people familiar with the matter”, Bloomberg is reporting that FTC staff formally recommended last month that FTC commissioners should file a lawsuit against Google for engaging in anti-competitive behavior; for blocking competitor access to FRAND patents that Google acquiring in its purchase of Motorola Mobility. According to Bloomberg, a “majority of the agency’s five commissioners” are in favor of suing Google over this matter and will likely formally announce their decision after the November 6 presidential election.

For those that aren’t familiar with the issue at hand, FRAND patents are patents that cover technology declared to be industry-standard, technology that a standard-setting body has agreed upon as a standard (e.g. technologies related to communication over 3G for smartphones). Because these patents cover industry standards, companies are legally obliged to fairly license the patents to anyone and everyone that wants to license them.

In its ongoing battle with Apple, Motorola (Google’s subsidiary) used some FRAND patents Motorola owns as leverage against Apple. Motorola didn’t flat-out deny licensing rights to Apple but, according to Apple, Motorola asked for outrageous royalties, which goes against the fair licensing laws of FRAND patents. It is these allegations that is spurring the FTC to go after Google.

To most people, including myself, it would appear to be unfair that Google is bearing the brunt of the government’s wrath for patent abuse when it is Apple who is suing anyone and everyone. However, you must bear in mind that there are no laws that require companies to fairly license non-industry-standard patents. Most, if not all, of the patents Apple is using against its competitors are not FRAND patents, so Apple is free to do what it pleases. Unfortunately for Google, many of Motorola’s juicy patents are FRAND and thus protected by fair licensing laws. (This is why Google is pushing for ‘defacto standards’ patents.)

For its part, Google has indirectly denied the charges:

We take our commitments to license on fair, reasonable, and non-discriminatory terms very seriously and are happy to answer any questions.

However, it isn’t entirely clear what will happen going forward; we will only learn more once the FTC formally announces their decision and Google responds to the decision. More like than not the two parties will settle out of court and agree to some terms that prevents Google from using Motorola FRAND patents against Apple, Microsoft, or any other company. Let’s see what happens.

[via Bloomberg, image via Dakiny]

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2 comments

  1. Bruce Fraser

    Ashraf, you’ve obviously never heard the UNA rule. What on earth is “UNA”? C’mon, Ashraf, *everybody* knows that! It stands for “Use No Acronyms.”

    Throughout that article, you use FRAND, but never once did you say what it stands for. For the unfamiliar, it’s “Fair, Reasonable, and Non-Discriminatory.”

  2. DoktorThomas

    While Google’s performance and features are likable, it’s data collection is not. But that isn’t too troubling since it is flawed (for me) anyway. It is amusing that the “no patents shared” company is suing the “sharing but with royalties” company.
    Given the difference in cost of user items offered by the two, seems the fruit company can afford to pay. Generally speaking.
    If the fruits at the fruit company cut their products’ price in half, they could quadruple their sales. Four times half the profit seems greater from this PC.
    But then I am not a fruit person. Nor a MSFT supporter either–just an XP user by default.
    Probably am a “Googly” die hard. Heard rumors that there are other search engines… somewhere. :-)