Google Settlement With FTC Could Help Reduce Endless Patent Litigation

By Wayne Rash  |  Posted 2013-01-03 Print this article Print

NEWS ANALYSIS: The Federal Trade Commission settles with Google on allowing competitors to use standard-essential patents, but drops its investigation of search engine bias for lack of clear evidence of consumer harm.

“This is exactly how law enforcement is supposed to work. This was a prudent decision by the FTC that shows that antitrust enforcement, in the hands of responsible regulators, is sufficiently adaptable to the realities of the Internet age,” Black said.

However, Black also said that CCIA was concerned about potential limitations on copyright law. “I am concerned about Google’s voluntary commitment on its display of ‘snippets’, which potentially sends the wrong message on fair use. Displaying ‘snippets’ of information from other sources, whether from newspapers or websites, is beneficial to consumers, widely accepted as appropriate, and protected under copyright law,” Black said in a prepared statement issued at the press conference. “Other companies should not interpret this agreement as diminishing their fair use rights in any way,” Black said in his statement.

Now that Google has reached a patent use agreement with the FTC, Black suggested that the federal regulatory agency needed to focus on patent abuse throughout the tech industry. “The settlement with Google on standard essential patents attempts to address one of the grey areas of patent policy and we will monitor it closely,” Black said in his statement.

“Given that SEP [Standard Essential Patent] issues are minor compared to the major abuse that goes on elsewhere in the patent system, we hope that the FTC does not stop here. The agency’s historical expertise in this area gives it both the resources and the cachet to inject competition concerns into the greater debate around patent reform,” said Black.

The question, of course, is whether the FTC can view the current patent wars as being anti-competitive, and if it does, find a way to take action against the abuse. There’s no question that moves by companies including Apple and Samsung (and up until now, Motorola) to prevent products from entering the US on the basis of claimed infringement of essential patents is hurting competition, especially to smaller players.

While Google and Apple have enough money to fight patent wars for an eternity, the practice hurts companies with more modest means. It can effectively force those companies out of the market, eliminate competition and thus hurt consumers. To defeat this, the FTC developed a procedure in which the holder of a standard-essential patent would have six months to reach a fair agreement on the use of the patent by anyone. If an agreement was not reached, then Google would be required to enter into arbitration before seeking an injunction.

If the FTC can make this procedure a standard practice, it could at least end the worst abuses of the patent wars and that would help everyone.


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