By Diane Bartz
WASHINGTON, Nov 27 (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
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.
Ohlhausen also argued that it was unclear that the FTC had
jurisdiction to issue policy statements on patent litigation
between companies that are also being argued in district courts
and at the International Trade Commission.
This opposition means that Ohlhausen will likely oppose any
effort to go after Google on its pursuit of patent infringement
cases based on standard essential patents if Google also asks
for sales of products to be stopped.
"The lines are drawn here. There are three votes and
probably four to go after Google on the patent part. The
question is can they (the FTC) get a settlement (from Google)
they can live with?" said an antitrust expert who is
knowledgeable about the FTC. "Leibowitz would rather be the guy
who settled with Google than the guy who litigated and lost."
The patent track of the FTC investigation of Google is just
one of several.
The search giant has been accused of using its dominance to
squash competitors in areas such as shopping and travel and
blocking rivals' access to its Android wireless phone operating
system. Google has also been criticized for asking courts to
stop sales of products that it says infringe essential patents.
Complaints about Google to the FTC over standard essential
patents arise from a raft of litigation between Apple Inc,
Google and Microsoft Corp, which have sued each other numerous
times in various countries, each alleging that their patents are
being infringed upon by rivals in the highly competitive
Google, which declined to discuss its talks with the FTC,
has settled with U.S. law enforcement agencies in the past.
For example, it settled with the FTC following privacy
gaffes during the botched roll-out of its social network, Buzz.
And Google paid a $500 million settlement in 2011 to the Justice
Department for knowingly accepting illegal advertisements from
Canadian pharmacies selling in the United States.
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