Today the Federal Trade Commission made its long-awaited announcement that it has voted to seek public comment on a proposal to conduct a Section 6(b) study of patent assertion entities and their impact on innovation and competition. The FTC proposes this study based on requests from the public and Senators as well as the FTC’s “own role in competition policy and advocacy.” The FTC will entertain public comments on its proposal to gather information from about 25 Patent Assertion Entities (PAEs) and about 15 other entities.
Importantly, issues regarding PAEs are distinct and separate from issues relating to standard essential patents and they should not be conflated. So why does the Essential Patent Blog care? Two reasons.
First, the FTC’s study will include specific requests for information about whether a PAE owns patents that are subject to a standard setting organization (SSO) obligation (see Information Request C(1)(o) at page 5 of the proposal):
o. whether the Patent (or any claims therein) is subject to a licensing commitment made to a Standard-Setting Organization and specify:
(1) all Standard-Setting Organizations to which a licensing commitment has been made;
(2) all standards to which such a licensing commitment applies;
(3) the Person(s) who made the licensing commitment;
(4) the date(s) on which the licensing commitment was made;
(5) all encumbrances, including, but not limited to, all commitments to license the Patent or any of its claims on reasonable and non-discriminatory (RAND), fair, reasonable, and non-discriminatory (FRAND), or royalty-free (RF) terms;
Second, the FTC is targeting non-innovating, non-practicing patent monetization entities. Specifically, the FTC defines the PAEs that are the subject of its study to be ”firms with a business model based primarily on purchasing patents and then attempting to generate revenue by asserting the intellectual property against persons who are already practicing the patented technology.” The FTC distinguished such PAEs “from other non-practicing entities or NPEs that primarily seek to develop and transfer technology, such as universities, research entities and design firms.” This focus on non-innovating, non-practicing entities may address concerns that some have raised about patent assertion entities that own SEPs and do not have the reputational concerns of actively innovating SSO members whose licensing approach will seek to foster adoption of their continued innovations in future versions of the standard.
The FTC will accept public comments about its proposed study up to 60-days after it is published in the Federal Register.
Late last week, the American Antitrust Institute submitted a very interesting petition to the U.S. Dept. of Justice and the Federal Trade Commission. In the petition, which is titled “Request for Joint Enforcement Guidelines on the Patent Policies of Standard Setting Organizations,” the AAI urges these agencies to step up their enforcement of the antitrust laws with respect to SSOs themselves — not merely the participants in the standard-setting process. To that end, the AAI requests that the FTC/DOJ (1) issue specific guidelines for what should be included in SSO patent policies, and (2) hold SSOs liable for not adopting procedural safeguards to prevent patent hold-up behavior.
Back in December 2012, the Federal Trade Commission and the Department of Justice held a joint workshop to explore the impact that patent assertion entities (PAEs — or non-practicing entities/NPEs) may be having on innovation, competition, and the U.S. economy. The FTC and DOJ invited the public to submit comments for consideration by the agencies, even extending the deadline for submission until early April. All in all, 68 separate submissions have been received and posted on the FTC/DOJ workshop’s site.
The commenters represent a wide variety of industries and interests, and express divergent viewpoints and positions about the effects of PAE activity. Many comments focus on the newly-reintroduced SHIELD Act. Given that the main focus of this blog is on standard-essential patent issues, we won’t even try to give a comprehensive rundown of all of the comments — we’ll leave the focus on non-practicing entities to others. But several of the comments do express particular concern about the interplay between PAEs, standard-setting organizations and standard-essential patents. After the jump, we’ll discuss some of these issues that are being flagged as troublesome.
On March 5, 2013 at 2:00pm, the Intellectual Property Owners Association is holding a webinar to discuss the potential implications that the FTC-Google consent decree may have on the world of standard-essential patents. The webinar is taking place as part of of IPO’s weekly IP Chat Channel series. David W. Long, a member of Dow Lohnes’s Litigation group and a co-author of The Essential Patent Blog, will be one of the webinar presenters. Details on the webinar and information on how to register for it is after the jump.
Yesterday we covered several public comments submitted to the FTC by various professional organizations and trade/industry associations surround the FTC-Google consent decree. Today, we’re here to tackle the submissions from several large companies that chose to comment on the FTC order. These companies include Apple, Ericsson, Microsoft, Qualcomm, and Research in Motion.
We’ve finally sifted through the many public comments submitted in response to the FTC-Google consent decree and proposed order. As we noted Monday, over two dozen individuals, companies, and organizations representing a wide range of interests submitted comments. Later this week, we will do a post featuring the details of some of the post submitted by interested companies, such as Apple, Ericsson, Microsoft, Qualcomm, and Research In Motion. But today, we are going to focus on the comments that have been submitted by other types of organizations, which include a veritable alphabet soup of interest groups, professional organizations, and industry or trade associations.
This past Friday (Feb. 22) was the deadline for the public to submit comments to the Federal Trade Commission on the FTC’s consent decree that it entered into last month with Google and Motorola Mobility. More than two dozen individuals, companies, and organizations chose to submit comments, and their submissions reflected a wide range of interests and opinions about issues relating to both standard-essential patent issues and Google’s search practices.
These comments may be accessed from the FTC’s web site. In a future post, we will do a deep dive into some of the more interesting comments submitted. In the meantime, after the jump is a list of the entities that submitted comments, along with links to their web sites:
In a not-so-surprising development in light of the FTC-Google/Motorola settlement announced last week, Google subsidiary Motorola Mobility asked the ITC yesterday to drop its two remaining standard-essential patents from its Xbox infringement dispute with Microsoft (Inv. No. 337-TA-752). The two patents dropped from the case — U.S. Pat. Nos. 6,980,596 and 7,162,094 — are alleged by Motorola to be essential to the ITU-T H.264 video coding standard. Given that the only relief that the ITC may grant is of an injunctive nature (whether an exclusion order or a cease & desist order), Motorola’s action appears to be consistent with the principles set forth in the FTC settlement, in which Google and Motorola agreed to forego seeking injunctive relief for SEPs except in certain extraordinary circumstances.
Lost in the all of the publicity surrounding the FTC’s consent decree that ended its investigation of Google and Motorola Mobility yesterday is the fact that while the FTC’s decision not to proceed with action against Google for its search practices was unanimous, its decision to issue a complaint and order relating to Google’s enforcement of its SEPs was not – Commissioner Maureen K. Olhausen submitted a dissenting statement. (Commissioner J. Thomas Rosch issued a separate statement, but voted in favor of issuing the complaint). The mere fact that the decision was not unanimous isn’t that remarkable in and of itself, as the five-member Commission often reaches split decisions. However, Commissioner Olhausen’s dissent raises some issues about the FTC’s action that warrant mentioning here.