Google pact with FTC could affect other patent disputes

Sun Jan 6, 2013 12:29pm EST
 

By Andrew Longstreth

NEW YORK (Reuters) - While the focus of last week's agreement between the Federal Trade Commission and Google Inc was search, the deal's restrictions on how Google uses its patents could have a broader impact on the technology industry.

Under the deal, which ended an antitrust investigation by the FTC and disappointed many critics, Google will make only minor changes to its search business.

But Google is also now limited in when it can seek injunctions against products from rival companies that use certain of its patents.

Throughout recent smartphone wars and other major patent litigation, holders of so-called standard essential patents have been accused of using them to bully competitors into paying high licensing rates or as leverage in patent disputes.

The FTC's deal with Google clarifies the uncertainty over how standard essential patents can be used, said Colleen Chien, a professor specializing in patent law at Santa Clara University School of Law in California.

The deal set out a process by which technology makers can avoid injunctions and patent holders know they are going to get compensated, Chien said. "The FTC has deflated the power of the injunction and also the incentives to not pay that have existed."

In its case against Google, the FTC claimed that Google and its subsidiary Motorola Mobility Inc had breached commitments to standard-setting bodies to license its patents on terms that are fair, reasonable and non-discriminatory. As part of the deal, Google agreed to drop claims for injunctive relief against competitors in certain patent disputes around the world. It also agreed to submit to the jurisdiction of a court or arbitrator when disputes over payment rates arise.

Throughout the FTC's investigation, Google was represented by Susan Creighton of Wilson Sonsini Goodrich & Rosati and John Harkrider of Axinn, Veltrop & Harkrider. The FTC retained Beth Wilkinson of Paul, Weiss, Rifkind, Wharton & Garrison.   Continued...

 
A neon Google logo is seen at the new Google office in Toronto, November 13, 2012. REUTERS/Mark Blinch