03
Jan
961-300x300_FTC_Seal

If you were wondering if this is the sort of legal story you should pay attention to on Android Police, let me make it easy: it is. This is probably the biggest legal story in the mobile sphere since Apple's victory over Samsung last August. Yeah, that important.

This morning, the FTC announced at a press conference that Google had settled its antitrust claims with the agency, and that Google agreed to two very important stipulations as part of that settlement relating to mobile.

First, Google and Motorola will cease seeking product bans for standards-essential patent infringement. I cannot underline enough how important this is to the mobile industry as a whole, at least in the US. But let's get to the second stipulation.

Next, Google and Motorola have agreed to resolve those standards-essential patent disputes in arbitration (outside of court in a quasi-judicial way), which means once the issues are settled, they will in all likelihood be settled for good. Binding arbitration decisions can only be appealed on a limited basis (grounds of unconscionability), and the burden to overturn those decisions is high.

This is important for a number of reasons. Foremost, Motorola's most powerful patents are no longer a weapon it can wield to seek product bans as a "me too!" defense to infringement lawsuits from the likes of Apple and Microsoft. It puts Motorola in a decidedly weaker legal position in the US, which is the only market Moto really cares about in the first place.

Perhaps more importantly in the grand scheme of things, though, the FTC has shown it has put its foot down on the SEP question in the US, and that those abusing them risk financial and legal repercussions. This will very likely force Motorola / Google to settle its existing disputes with Apple and Microsoft, and yes, probably pay a royalty to both. Microsoft has settled with every other Android OEM already, and a similar agreement with Motorola is really just a matter of time now.

In regard to Apple's lawsuits, Motorola has very suddenly found itself in an even less defensible position. Motorola already dropped a lawsuit against Apple at the ITC, and court documents from November suggested the two were mutually amicable to the idea of a worldwide settlement through binding arbitration. Hot on the heels of the HTC / Apple settlement, it seems more likely than ever the two companies will settle their dispute out of court. The devil is in the details, but once again, it just appears to be a matter of time.

Finally, what does this all mean for Samsung? Well, Samsung has rather boisterously thrown the weight of its own standards-essential patents around in courts the world over against Apple, and that's definitely gotten Samsung in hot water in the EU. Samsung has also attempted to use similar patents against Apple and Ericsson at the ITC in the US. With the FTC's newly-pronounced disapproval of SEP-based product bans, this certainly doesn't bode well for Samsung's cases. In fact, the DoJ is already looking into Samsung's use of such patents.

It's certainly easy to paint this as a case of the system working for "patent bullies" like Apple and Microsoft (which they certainly can be, I admit). However, it should be clear to anyone familiar with patent law that standards-essential patents are being very blatantly abused in courts around the world, and are only adding to the pile of legal headaches in the mobile industry. The FTC's settlement with Google today is, in that sense, a step in the right direction.

An even bigger step in the right direction would be a re-evaluation of the absurd rules governing software patentability here in the US, which allow companies like Apple and Microsoft, and patent trolls, to essentially turn on a patent-printing-press every time a new software feature pops into someone's head. In fact, the Federal Circuit will be addressing the loophole that allows some of this nonsense to happen in the relatively near future.

In the meantime, though, while today's decision may hurt the Android fanboy in all of us, it's inarguably a benefit for the industry at large. By reducing the number of bullets you can put in the legal gun, as it were, you ensure decisions to fire will be weighed more carefully in the future.

via The Verge

David Ruddock
David's phone is whatever is currently sitting on his desk. He is an avid writer, and enjoys playing devil's advocate in editorials, and reviewing the latest phones and gadgets. He also doesn't usually write such boring sentences.

  • http://www.facebook.com/people/Alexander-Drizzy-Rojas/100000186636833 Alexander Drizzy Rojas

    Wtf? And there goes apple prancing like a little bitch. This is bs

  • Spoken Word™

    I love your rosy outlook but someone with a law degree and a slight bit of patent knowledge, Google/Motorola just got bent over butt f*&@#d without the aid of lube. As you so eloquently noted, this leaves the door wide open for Apple, Microsoft, etc, to use the system to not have to pay fair value.

    • http://www.androidpolice.com/ David Ruddock

      Not pay fair value? The royalties are still there if they actually infringe, the issue is just being taken to a different venue. Not like arbitration has some built-in advantage for the accused as opposed to the accuser.

      Also, yeah, Google/Moto got screwed here, but it's not like they shouldn't have seen it coming. Just because Apple/MSFT set Moto's house on fire doesn't make it OK for Moto to shoot their dogs in retaliation. Neither side is in the right, and unfortunately, because the FTC moves a hell of a lot quicker than congress or the courts, the side we're rooting was the one that was gotten to first.

      The issue is that SEP abuse is an anti-trust issue, which an agency exists to combat, whereas bogus software patents are a patent law issue that will naturally take longer to address because of the court system.

      • Chris

        Congress and the President consider all of this patent trouble to be solved already. Don't you remember the America Invents Act? There is no one coming to rescue Google and their compadres from Apple and Microsoft.

        The net result of this is that standards essential patents have much less value. Which means that real research has much less value, at least in the US. The message sent to companies in the US is to leave the real research to Asia, and to file patents on every conceivable variation of user interface animation, experience or product configuration.

  • Craig Simpson

    holy &*%$*^%% well this only helps apple because they use patents they designed and no one else should use as a standard etc
    -.- the FTC needs to crack down on all moronic patents first.

  • CitrusRain

    I really wish they would have got Apple on this first, or at the same time... Or at least, are they trying? PLEASE tell me they're trying.

  • http://www.jaxidian.org/update teh Jax

    I've tended to disagree with many of your positions lately on these patent issues, but you hit this one right on. While this is a short-term loss for Google and Android, this is a step in the right direction. SEPs should NOT be abused like they have been. Now we need to get remove the other patent abuse that's becoming absolutely absurd!

    • casinrm

      Nukes are bad. So should we unilaterally disarm?

      • http://www.jaxidian.org/update teh Jax

        Huh? What about nukes?

        • dqdfx

          He's pointing out the lack of acknowledgement that this entire FTC action was at the behest of anti-google interests like about 15 other posters have already highlighted.

  • GIBsonCubed

    I see this as less of "a step in the right direction" and more enforcing the recent behavior of Apple in making sure they work against their patents ending up in a standards track, as now they would lose any ability to enforce them beyond what is "allowed by big brother"

  • http://twitter.com/Defenestratus Defenestratus

    Yeah - this is in NO WAY good for Android. I expect Apple to start filing all kinds of frivilous lawsuits now that Android OEMs are basically powerless to threaten Apple back in any way whatsoever.
    There's no more mutually assured destruction now. If you think the FTC is going to come down against Apple then I'm afraid you're just not plugged into today's "pay for service" government.

  • marcusmaximus04

    "By reducing the number of bullets you can put in the legal gun, as it were, you ensure decisions to fire will be weighed more carefully in the future."

    Of course the problem here that I think everybody will be worried about is that they only removed the bullets from the gun of the guy defending his house, and not from the burglars attacking him.

    • http://www.androidpolice.com/ David Ruddock

      Yep, no denying that the order of operations of here is whack, but the FTC moves a lot quicker than the courts, and Apple/MSFT's use of their patents isn't an anti-trust issue, it's a broke-patent-law issue.

      • Cherokee4Life

        I am going to say what I think our fearless writer wanted to say but couldn't

        this is bull&h*t. :) I'm just playing, but seriously this is a great start in the right direction. I know it hurts on the inside but I am putting my faith in the FTC for a moment that they will do the same to Microsoft and Apple. I mean Google is the biggest (in my bias opinion), so start with the biggest giant and work your way down to the little people. set an example. Yes it's not "fair" that Google got picked on first but if Apple and Microsoft get the same treatment in the next month or two it won't matter. The issue here is if the FTC either doesn't do the same to them or takes a very long time to do it. Then we know "the system working for "patent bullies" like Apple and Microsoft"

    • casinrm

      Apple was using high powered sniper rifles to take out Android OEMs one by one and the OEMs responded with machine gun fire. And the FTC only banned machine guns, leaving them defenseless. How the hell is Apple's repeated lawsuits and patent abuse not anti-trust but the OEMs defending themselves is?

      • http://www.jaxidian.org/update teh Jax

        Agreed with you. To answer your question, Apple's situation isn't "anti-trust' because the only "monopoly" that they are abusing is rights to their technologies (that the USPTO bogusly granted), and they have the right to push others out of this "monopoly" - that's why patents exist!

        This is NOT the case with SEPs because, by definition, if you request a patent be considered an SEP, then you are agreeing that you will allow *anybody* to license it at "fair market value". You have absolutely NO rights to deny somebody the right to license that patent at a value comparable to what others pay for it. With normal patents, you can deny 100% of people the right to license that technology, or you can charge outrageous prices for it, or give it away for free - it's entirely your choice.

        Once you request for and are granted SEP status, you lose many rights - but it was something you requested in the first place!

        • John O’Connor

          what I do not see addressed to date is, who will ensure and how will SEP payments be enforced? I'm looking at you Apple, who still refuses to pay for the SEP used in your devices.

          • Chris

            Courts can still enforce payments, and its not uncommon for companies like Apple to end up in courts for back payments of these patents anyways. Its a good way to get the licensor to give you an interest free loan in essence, and you can pay them back 5 years later with money that last lost 3% of its value every year. Its the demanding of product bans that the FTC took issue with.

            Basically this is a another absurdly stupid decision that shoots real innovation in the foot. All of the standards essential patents that resulted from billions of dollars of research and development have their teeth removed, while all of the design patents that took one guy five minutes to think up continue to bite companies all around the world.

  • QwietStorm

    A step in the right direction, possibly, we've yet to see that. But, I find it absurd that the mentioned "patent bullies" were not the ones made an example of. Its like they deliberately went after the smaller kid in the room who has been frequently getting attacked, instead of the actual bullies. I don't understand what kind of barrel Google had to be bent over to agree to this.

  • Alex

    Why they don't do the same thing to Apple??!!

  • kane

    Yes the devil is in the details. I read this as stop asking for BANs over SEPs. Not limiting asking for damages. Hope I'm totally wrong here. Hope I am wrong here but sounds like a lawyer could still interpret this to still f you in the a

    • http://www.androidpolice.com/ David Ruddock

      You can definitely still get damages.

  • topgun966

    This is unbelievable. Moto spends billions in R&D and now the FTC is saying FU give it away. However, Apple can patient a flat slab rectangular shape which is not considered a SEP. I smell SERIOUS pay offs here. Dispicable and scary.

    • http://www.androidpolice.com/ David Ruddock

      Give it away? No one said anything about giving it away. Apple still has to pay a royalty if they're found to infringe, their products just can't be banned for it unless they actively flout a court order for such royalties.

      • dqdfx

        do you not recall why things got to the requests for "banning"?

        It's because apple & MS refused to negotiate and sued claiming that it was google who refused to negotiate.

  • KingRando

    Why doesn't Apple have to agree to similar terms? They're the ones bullying everyone.

  • casinrm

    Next up, Apple sues any OEM with a lock screen using its new ex-post facto method of covering workarounds for their patents. After that it sues for universal search again even though Samsung only does web search now claiming the instant predictions are searching cached data on the phone.

  • dqdfx

    it'd help to read elsewhere, so you can see that this means NOTHING.

    Google agreed to do nothing, FTC didn't have a case. the end.

    http://www.techdirt.com/articles/20130103/10491421570/as-expected-ftc-announces-close-google-investigation-with-no-antitrust-charges-minor-tweaks-to-biz-practices.shtml

  • http://twitter.com/ToysSamurai Toys Samurai

    Well, looking at it from another perspective, that may also means companies from now on will have very little incentive to make its patentable idea a "standard".

  • br_hermon

    David, so the FTC dropped the hammer on Google. When or Will they do the same on Apple or MSFT? Have either of those companies been loading their gun with SEP bullets?

    Also... given that Apple patents every minute freakin thing they think of, 5, 10 or 20 years from now, could their patents be widely used that their considered SEPs? Maybe years from now Apple will feel the same sting Google/Moto feels today?

    • HopelesslyFaithful

      after 20 years patents are free game to anyone.

  • Davy Jones

    So let me get this straight. Motorola basically forces Google to buy their whole company if they want the patents and now these patents are largely useless? It's not as if they got a good deal on Motorola. What a bad deal this has turned out to be for Google.

    Meanwhile on the OS side of things SEPs don't exist. There has just been this giant monopoly called Microsoft for years and one competitor named Apple that they at one point funded so as to give the faintest illusion of competition. The two companies, by avoiding making any sort of "standards" were given unfettered control of their ecosystems. They then were able to bring the accumulated patents from PCs to the mobile industry and essentially dominate all of the mobile players whose own research and investments into mobile technologies gave us that industry in the first place, and demand royalties from them if they compete with them (Apple) or don't use their OS (Microsoft). Do I have this right?

  • Metalborn

    Sorry, but I really don't understand how you can use a rounded square
    as a legal weapon but cannot use real technology that is really
    important and a real evolution to the tech world.
    Sorry, but I think this is completely wrong.....

  • http://codytoombs.wordpress.com/ Cody Toombs

    Wasn't there news recently that Apple was proudly refusing to negotiate licensing terms for a list of SEPs from Motorola?

    What I'm hearing is that Google can no longer request a ban if Apple continues to refuse to pay for licensing. Google can ask for arbitration, but I've read that arbitration often results in patent licensing fees significantly lower than courts do, especially SEPs...and much less frequently give awards based on abuse or willful infringement as the courts would. I understand why the general rules are ultimately good if adopted system wide, but for now they are only targeted at Google and they really seem baseless given the precise nature of Google's use of those SEPs.

    I don't mean to pile on the obvious hate-fest, but this smells like the old patent landlords were pressuring the FTC to deflate Google's legal power prior to negotiations...

    • HopelesslyFaithful

      google has a legal right to protect their patents from what i understand. I can't see some judge or the FTC saying google can not take Apple to court for willfully infringing a SEP patent. I find that very hard to believe that they would allow blatant abuse of that nature and that would not get fire from the federal courts.

      Again no expert but my two cents. Any opinions?

  • mrjayviper

    the amount of bias in the comments is hilarious. and talking about patents and IP as if they know everything.

    armchair lawyers FTW I suppose and keep drinking that koolaid!

    -One X and Asus TF700 owner-

    • mrjayviper

      in saying that, I suppose it's the same when I had my iDevices and viewing article comments on macrumors

    • http://codytoombs.wordpress.com/ Cody Toombs

      If everybody who was under-qualified in a topic were prevented from expressing opinions or making statements, here's a few things that might be different:

      * Approximately 18 people in the US would be able to vote for the next president
      * SOPA and PIPA would have passed
      * Congress wouldn't be allowed to vote on 90% of bills (maybe that would be ok...)

      Feel free to disagree, but I doubt you're an expert in debate or law. Don't get me wrong, there's a lot of bias and even a couple of comments that show some people didn't even bother to read the article...but there are times when anybody can smell BS...

      • mrjayviper

        You got that right! I'm no expert so I don't even bother commenting on the article itself :D

  • Guest

    shocking comments gets deleted if it's anti-google? :O

    • http://codytoombs.wordpress.com/ Cody Toombs

      You know how these comments are running on Disqus...There's no pre-moderation on this site, and anybody subscribed to an article gets nearly instant emails for each comment. In other words, everybody who's posted (and thus subscribed), knows you're a lying troll. Go back to the Blackberry Storm forums where you belong.

  • Guest

    deleted again? :O

  • James Barr

    How the hell is Apple immune to this garbage? They're the biggest major patent troll in the industry. What a joke. Thanks, D.C., for letting companies do whatever they want if they pay the right lobbyists enough money.

  • Mike

    Last I had read the LTE patents weren't being considered SEPs by the ITC as Apple had requested/proffered to HTC's current and Smasung's pending suits of that nature. If I recall the ITC guy hearing this stuff said I don;t care if HTC bought them, it's still thier property right or something to that effect.
    HTC has settled since, but I think a good part of that settlement in whatever they ended up paying Apple as a royalty was SIGNIFICANTLY lowered with their ability to make their iPhone 5 and iPad LTE a living hell of a nightmare with thier LTE patents.
    AM I off base on that? If not, I believe Samsung still has some LTE tpatents to shove down Apple's throat.

  • Matthew Fry

    Well let's see if I can try my hand at summarizing. SEPs are hardware patents specifically designed and set up so that standards can be based upon them. E.G. so we aren't all using proprietary wifi standards; ie a good thing. The FTC made it easier for these patented technologies to be licensed and used (assuming the licensors are actually ethical). This does take an arrow out of the Samsung and Motorola quiver, but since they were being unfairly used as a threat (albeit against unfair claims to begin with) it is a good thing.

    Separately, there is the issue of idiotic patent claims by people abusing the system via submitting patents for nebulous ideas instead of implementations. If I understand this correctly, they need to be non-obvious and specific. These still need to be dealt with but as a separate issue.

    The part I don't understand is why this second issue is the purview of the courts and not the FTC.

  • DeadSOL

    Why do the courts have such a hard-on for crApple?

Quantcast