At a press conference at Federal Trade Commission headquarters in Washington DC, FTC Chairman Jon Leibowitz just announced that the U.S. competition enforcement agency has ordered Google to abandon immediately its pursuit of injunctive relief over the standard-essential patents (SEPs) that Motorola Mobility once promised to license to all comers on fair, reasonable and non-discriminatory (FRAND) terms. A bipartisan majority of the FTC voted in favor of this order.
The FTC also announced the conclusion of its investigation of Google's search engine-related practices. I can't comment on that matter because I've been too focused on patent litigation and related competition issues over the last couple of years. But it became clear to me that the FTC is much more concerned about abusive assertions of FRAND-pledged SEPs than how Google runs its search engine.
On the SEP side, the Chairman's speech sounded stronger and more definitive than the written announcement of the consent decree (an FTC order to which Google agreed) appeared to be. The speech suggested that Google is precluded from the pursuit of injunctive relief over SEPs, period -- but the written announcement merely said that the order "prohibits it from seeking injunctions against a willing licensee, either in federal court or at the ITC". In my observation, all SEP abusers claim that the defendant has been unwilling to take a license (or to negotiate at all). But having seen the actual consent order, I believe it provides reasonably meaningful guidelines for distinguishing a "willing licensee" from an unwilling one. Simply put, someone who triggers a court action or arbitration to have the FRAND terms set, and is willing to take a license on the final terms, should be on the safe side now.
In connection with the appeal of Judge Posner's Apple v. Motorola decision, the FTC recently submitted an amicus curiae brief that also made some strong statements against hold-up but stopped short of providing clarification on the question of who's a "willing licensee". Only Commissioner Rosch expressed, in a footnote, "the view that the issuance of injunctive relief is inappropriate where the patent holder has made a FRAND commitment for a standard essential patent, even if the patentee contends that it has met its FRAND obligation" and advocates a bright-line rule prohibiting injunctions based on SEPs, the only exception being "when the licensee refuses to comply with the decision of a federal court or some other neutral arbitrator defining the FRAND terms" -- which is also the way I understand Judge Posner's position. Today's FTC announcement says that "Commissioner J. Thomas Rosch issued a separate statement regarding the SEP matter", and notes that he abstained, suggesting that the consent order doesn't go far enough in his view.
That said, I believe Apple and Microsoft will benefit greatly from this decision. Google is now going to have to stop its pursuit of SEP-based injunction against those defendants. The FTC alleged that Google's Motorola Mobility "pursued – or threatened to pursue – injunctions against companies that need to use MMI's standard-essential patents in their devices and were willing to license them on FRAND terms". This suggests to me that Apple and Microsoft were considered willing licensees by the FTC, a finding that should bear considerable weight with U.S. courts and the ITC.
The European Commission, which issued a Statement of Objections against Samsung last month, also appears quite determined to put an end to FRAND abuse. The EU regulator also referenced the concept of a "willing licensee" in the announcement of the Samsung SO.
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