Posts Tagged: "essential patents"

Under a settlement reached with the FTC, Google will meet its prior commitments to allow competitors access – on fair, reasonable, and non-discriminatory terms – to patents on critical standardized technologies needed to make popular devices such as smart phones, laptop and tablet computers, and gaming consoles. In a separate letter of commitment to the Commission, Google has agreed to give online advertisers more flexibility to simultaneously manage ad campaigns on Google’s AdWords platform and on rival ad platforms; and to refrain from misappropriating online content from so-called “vertical” websites that focus on specific categories such as shopping or travel for use in its own vertical offerings.

The brief addresses this issue in the context of patent infringement claims that Motorola, Inc. has filed against Apple, Inc. regarding technologies used in iPhones and iPads that allegedly are covered by Motorola’s SEPs. It concludes that a district court correctly applied the governing legal principles when it dismissed Motorola’s request for an injunction that could have blocked Apple from selling iPhones and iPads in the United States.

According to the FTC’s complaint, Bosch’s acquisition of SPX’s Service Solutions business would give Bosch monopoly power in the U.S. market for ACRRR devices. Following the transaction as proposed, Bosch would control an overwhelming share of the market. Four other firms are in the market, each with a very small share. The acquisition also would eliminate the current direct competition between Bosch’s RTI and Bosch brands and SPX’s Robinair brand, and would allow the combined firm to raise prices by unilaterally exercising its newly gained market power, in violation of the FTC Act, the FTC alleged. The FTC complaint also alleges that SPX has been pursuing a strategy of suing to enjoin competitors from using patents that may be necessary to meet the standards for manufacturing ACRRR devices.

How anyone with even the most fundamental understand of property rights and economics could say that infringing a patent does not result in a tangible injury is beyond me. Is he unfamiliar with the concept and real world practice of licensing patents? With all due respect to Judge Posner, a right without the ability to obtain recourse for its trampling is no right at all. His analysis is wrong and frankly rather amateurish. It carries the stench of a anti-patent ideologue who doesn’t understand the most fundamental principles associated with legitimate, arms-length negotiations that result in a transfer of rights. Judge Posner’s damage analysis has to be a dream come true for those who use the bullying tactic of efficient infringement to make the business decision to trample rights rather than legitimately acquire them.

J. Posner also brought the value of the patents declared to be essential under standards bodies to bear on the damages question.  Essential patents must be evaluated for absolute value and relative value to the full-declared portfolio.  These values are needed where a non-linear function is proposed for a royalty determination based on infringement of a subset of the declared patents.  The difficulty presented by an assertion of a single essential patent from a much larger portfolio is “that if [the potential licensee] had wanted to license any of the patents in [the standard’s essential portfolio], the license fee would have exceeded the product of the percentage of the portfolio represented by the patent and the value of the entire portfolio.”  Objective data to present a non-linear function was needed, and even where presented, the notion of a FRAND royalty applied to “confine the patentee’s royalty demand to the value conferred by the patent itself as distinct from the additional value – the hold-up value – conferred by the patent’s being designated as standards essential.”