Today, the Federal Trade Commission announced that it has approved a modified final order that settles its investigation into Motorola Mobility’s alleged anti-competitive practices surrounding its standard-essential patent licensing and enforcement program (for more background, see our original post on the case). Here’s the Commission’s final decision and order, as well as a final version of the complaint:
You may recall that the proposed settlement and order was announced back in January. The FTC noted that it received 25 public comments on the proposed order (many of which we’ve covered before here and here), and that in light of these comments, the FTC made certain “technical modifications” to some provisions in the order. In a letter to the public commenters, the FTC explained the reasoning behind several provisions included in the final order, along with the modifications it made.
Some interesting notes and clarifications from the FTC’s letter include the following:
The FTC decided to remove the count from the complaint that alleged that Google “engaged in unfair or deceptive acts or practices,” although it indicated that its decision to do so was limited to the facts of this particular case — not all SEP-related investigations.
The FTC rejected the concern that barring the ability to seek injunctive relief during the appeal of the FRAND determination would delay the resolution of licensing disputes, noting that fairness dictates that implementers be able to appeal FRAND determinations without facing the threat of injunction relief (as long as they have committed to be bound by the final FRAND determination).
Addressing fairly widespread concerns that its actions violate the Noerr-Pennington doctrine, the FTC found these without merit, arguing that it is simply requiring Google and Motorola to keep its FRAND promises — which the FTC concludes precludes seeking an injunction against a “willing licensee.” (Notably, the FTC cited the decisions by Judge Robart and Judge Posner as support.)
The FTC kept in the order the “defensive use” exception, which allows Google/Motorola to seek injunctive relief for SEP infringement if it is facing a threat of injunction based on its own alleged SEP infringement. The FTC found that despite concerns by commenters that this was too broad and could allow for gamemanship, the provision was appropriate tailored and consistent with the goals of the order.
Importantly, the FTC order does not require Google/Motorola to withdraw all pending legal claims for SEP-related injunctive relief (for instance, in the Apple-Motorola Federal Circuit appeal of Judge Posner’s decision). However, the FTC noted that the order does prohibit Motorola/Google from enforcing any injunctive relief that it may win in pending litigations unless it first complies with the provisions of the order.
As for the modifications made to the order, they were largely minor (and made with Google’s consent, which was required). The FTC made some clarifying and technical changes to the definitions, and also slightly altered the required arbitration procedure. The FTC also changed a provision that would have required Google/Motorola to respond to inquiries from potential licensee with an offer to license, instead now only requiring that Google/Motorola timely respond (but that the content of the response need not include an instant offer to license, but may be dictated by the circumstances).
The final vote was 2-1-1, with Commission Maureen Olhausen dissenting and Commissioner Josh Wright recused.
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.
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:
InformationWeek brings us the story of Ashford.com’s Emob’s fight against Cronos Technologies, a well-known NPE, over a patent related to a “remote ordering system.” (InformationWeek)
Google’s Senior Vice President & General Counsel Kent Walker wrote an opinion piece for Politico, making the case for the Obama administration’s second term to include additional patent reform that specifically addresses patent assertions by NPEs. (Politico)
Counterpoint: Paul Schneck, chairman of Rembrandt IP Management — an NPE that recently sued Facebook for patent infringement in the Eastern District of Virginia — makes the case in Forbes that patent assertions by NPEs are not the problem that many claim them to be. (Forbes)
[UPDATE]Since this post was originally published on January 22, the deadline passed for the parties to submit extrinsic evidence and additional arguments supporting their respective interpretations of the Google-MPEG LA AVC/H.264 license agreement. Microsoft submitted both a brief and a supporting Declaration of Lawrence A. Horn, who is the President and CEO of MPEG LA, LLC. Mr. Horn’s declaration supports Microsoft’s argument (as detailed in our original post below) that the scope of the grant-back under the MPEG LA license agreement extends to all Affiliates of Google, not just to those specifically identified. For its part, Motorola argues that the “scope” language of the MPEG LA agreement remains ambiguous, and that Mr. Horn’s declaration represents inadmissible hearsay because Motorola was unable to cross-examine him.
The parties’s respective briefs and Mr. Horn’s declaration may be accessed from the links below:
Judge Robart’s forthcoming opinion in the Microsoft v. Motorola RAND breach of contract case in the Western District of Washington is highly anticipated by those who pay attention to standard-essential patent disputes, as it will likely provide a judicially-sanctioned roadmap for how to determine RAND terms and conditions in a given licensing situation. But before he issues a written decision, a hearing is scheduled for January 28, during which Judge Robart will hear oral argument from Microsoft and Motorola regarding the implications that Google’s AVC/H.264 patent pool license agreement with MPEG-LA may have on the appropriate RAND terms for Motorola Mobility’s H.264-essential patent portfolio. (Google, of course, being the parent company of Motorola Mobility since it acquired Motorola in May 2012).
In the wake of the FTC-Google settlement, an investigation into potential antitrust violations by Google continues in Europe. Joaquin Almunia, the European Commission’s antitrust & competition chief, said that the FTC’s decision would not affect the European Commission’s investigation. (Financial Times)
Unwired Planet — an NPE formed out of the remains of Openwave Systems, who has been engaged in patent skirmishes with many large tech companies — has acquired more than 2400 patents from Ericsson, including patents relating to 2G, 3G, and 4G (LTE) cellular standards. Ericsson reportedly stands to receive a percentage of any licensing revenues obtained by Unwired for these patents. (TechCrunch)
For the 20th consecutive year, IBM received more U.S. patents than any other company (6,478 patents granted in 2012). (Bloomberg)
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.