In Google Patent Case, F.T.C. Set Rules of Engagement for Battles

The following is an excerpt from an article in:


The New York Times
Saturday, January 05, 2013

In Google Patent Case, F.T.C. Set Rules of Engagement for Battles

By STEVE LOHR

The Federal Trade Commission’s antitrust investigation of Google focused mainly on the company’s lucrative search business, while its inquiry into the tech giant’s handling of patents seemed an afterthought.

Yet even as Google made only a few voluntary promises on search, it agreed to a legal settlement on patents that Jon Leibowitz, the commission chairman, called a “landmark enforcement action” that applies to huge high-tech markets like smartphones and tablet computers.

The commission action by no means spells the end of the smartphone patent wars, a global conflict in which major corporations including Apple, Samsung and Google have spent billions amassing patent portfolios and then suing and countersuing one another in courts around the world. But legal experts say Google’s settlement with the F.T.C. signals progress in clarifying the rules of engagement in high-tech patent battles, and thus could ease them.

“The agreement represents a significant stride forward in reducing the confusion and uncertainty that currently surrounds how these patents can be used,” said Colleen Chien, a patent expert at the Santa Clara University School of Law.

The commission’s settlement with Google, announced on Thursday, focused on patents covering communications and data transmission technologies that are crucial for the basic operation of smartphones and tablets — what are known as standard-essential patents. (There are many other patents in mobile devices, covering physical design and software features.) The legal gamesmanship of the epic smartphone patent battles, according to economists and technology experts, consumes time and investment that could be better used to develop new products. In his comments on Thursday, Mr. Leibowitz pointed to those concerns. “Today’s commission action,” he said, “will also relieve companies of some of the costly and inefficient burden of hoarding patents for purely defensive purposes, savings that we hope can be invested in job-creating research and development.”

Under the settlement, Google agreed to license its standard-essential patents to other companies on “fair and reasonable” terms. It also agreed not to seek court injunctions to halt the shipment of smartphones, tablets and other devices that use its standard patents.

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