On Friday, the day after Google's antitrust settlement with the Federal Trade Commission (see my initial reaction, explanation of mechanics, comparison with other SEP case), Microsoft filed a "notice of development in connection with Motorola's H.264 standard essential patents" with the United States International Trade Commission (ITC), expressing the expectation that Google's Motorola Mobility will withdraw its Xbox complaint shortly. The notice was filed "so that the resources of both the ITC and the parties may be conserved and not wasted on issues that Motorola has agreed to withdraw as a result of its settlement with the FTC". It entered the public electronic record today.
Following Google's (Motorola's) unilateral withdrawal of its WiFi patents-in-suit in October 2012, the remanded investigation is down to two H.264 video codec patents.
Anything less than an immediate withdrawal (or at least a motion for a stay during the public comment period on the proposed settlement) would call into question the suitability-to-task of the FTC-Google agreement as well as Google's intent to comply. FTC Chairman Jon Leibowitz expressed at last week's press conference the understanding that Google is going to abandon its quest for SEP-based import bans. Microsoft's filing quotes an excerpt from the press conference (the question was asked by Politico's Michelle Quinn, and the Chairman responded personally):
Q. "HAS GOOGLE OR IS GOOGLE SAYING THEY'RE GOING TO WITHDRAW THEIR CASES AT THE ITC?
AS YOU KNOW, THE ITC'S ONLY REMEDY IS [T]O BLOCK PRODUCTS COMING INTO THE UNITED STATES.
A. "YES, THEY'RE CERTAINLY -- THEY SHOULD BE.
I SHOULD HAVE MENTIONED THIS EARLIER. ... MY UNDERSTANDING IS WILL BE -- THEY'RE GOING TO STOP TRYING TO SEEK ... [AN] EXCLUSION ORDER AT THE I.T.C."
This was also my understanding. Microsoft has a case pending in Seattle that serves the purpose of a FRAND determination (term-setting) under the FTC-Google deal. Unlike Apple, Microsoft unconditionally committed to take a license on court-determined terms -- and the FTC-Google deal is even meant to protect Apple, provided that it will commit to a license deal going forward. If Google kept pursuing its ITC case against Microsoft, it would almost certainly do so against Apple as well (the SEP-related part of the Apple ITC case was dismissed but is being appealed). This is the first test (but certainly not the last) for the FTC-Google agreement.
Reactions to the FTC-Google deal have been mixed. I, too, was torn because on the one hand I can see how the FTC tries to address certain issues that have come up in recent SEP enforcement actions but on the other hand there's legitimate concern that its complexity may be perceived by some SEP owners as an invitation to argue that their rivals are all "unwilling licensees". Orrick, Herrington & Sutcliffe's Jay Jurata, Monte Cooper and Neel Chatterjee authored this analysis, which is also quoted in this Reuters story and says, among other things, that "by establishing elaborate procedures that Google must follow before invoking an 'unwilling licensee' exception to the general rule, the decree might have the unintended consequence of encouraging opportunistic behavior by SEP owners in an attempt to portray companies as 'unwilling licensees.'"
I look forward to seeing Google's response to Microsoft's notice and will report on it.
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