FTC patent ruling might hint at how it will treat Google case

Tue Nov 27, 2012 7:33pm EST
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By Diane Bartz

WASHINGTON (Reuters) - Federal regulators investigating Google for a range of accusations of antitrust violations took a stand this week on how to handle a type of patent similar to ones in the Google case, but also exposed a rift between regulators on how to proceed.

The disagreement focuses on whether the Federal Trade Commission can use its power to enforce rules against unfair competition in pursuing companies which ask for sales injunctions against rivals because of allegations that their so-called standard essential patents (SEP) have been infringed.

SEPs ensure interoperability, and are normally expected to be licensed on fair, reasonable and non-discriminatory terms, also known as FRAND terms.

Those following the antitrust probe into Google have been searching for any hint on how the commissioners might rule regarding the search engine giant. Some think Monday's settlement with companies that make equipment to repair auto air conditioners contained some interesting clues.

The FTC, in a majority statement by three Democratic commissioners, warned against asking for sales bans as a punishment for infringement of essential patents. Google has two such cases pending.

"Patent holders that seek injunctive relief against willing licensees of their FRAND-encumbered SEPs should understand that in appropriate cases the commission can and will challenge this conduct as an unfair method of competition," the commission majority said in statement Monday about the merger, which is unrelated to the Google probe.

But the agency, whose Chairman Jon Leibowitz prizes bipartisanship, faced opposition to the settlement from its two Republican commissioners.

One, Thomas Rosch, did not say publicly why he opposed it. The newest commissioner, Maureen Ohlhausen, dissented specifically on the patent issue, saying it was "creative yet questionable" and did not give industry meaningful guidance on the use of standard essential patents.   Continued...

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