FTC May File Concerns With ITC On Key Standards Patents
05/31/2012| 02:56pm US/Eastern
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--FTC chairman worried about willingness of tech companies to fairly license patents
--Majority on FTC "very concerned" about companies suing for injunctive relief
--Hiring of high-profile litigator to head antitrust probe of Google, "doesn't mean we're going to make a case"
(Updates to adds details about Wilkinson hiring, Google probe in the 15th through 21st paragraphs.)
By John Letzing
Of
U.S. Federal Trade Commission Chairman Jon Leibowitz said Thursday the regulator may file concerns with the International Trade Commission over tech companies' treatment of key patents.
Leibowitz, speaking at the D: All Things Digital conference near Los Angeles, also noted the FTC's recent hiring of a top litigator to lead its antitrust probe of Google Inc.'s (>> Google Inc) online search advertising dominance--but said the hiring doesn't mean the FTC will bring a related case.
Leibowitz, who touched on a number of tech issues in the regulatory world, said the FTC has significant concerns about the willingness of companies to fairly license patents that are key for entire industries such as the mobile-phone business.
U.S. tech giants including Apple Inc. (>> Apple Inc.), Google's Motorola, Samsung Electronics Co. (005930.SE, SSNHY) and Microsoft Corp. (MSFT) have been embroiled in disputes over the licensing of such "standards-essential" patents.
Companies typically make commitments to industry groups to make their patents available on a reasonable and nondiscriminatory basis, a principle that is often associated with patent holders agreeing not to seek injunctions to block sales of infringing products.
While the FTC is still formulating its position on such issues, Leibowitz said it is troubled by cases where companies may have sought injunctions.
In those circumstances, "the bipartisan majority on our commission is very concerned about suing for injunctive relief," Leibowitz said.
On Tuesday night, speaking at the same conference, Apple Chief Executive Tim Cook complained that firms' treatment of such patents is an example of misuse of intellectual property.
"No one should be able to get an injunction off a standards-essential patent," Cook said, referring to a legal action barring a company found to infringe from selling related products.
Suing other firms over such patents is "fundamentally wrong," Cook argued.
Apple's disputes with Samsung have revolved around Samsung's collection of standards-essential patents.
Microsoft, meanwhile, has been fighting legal battles with Motorola over standards-essential patents.
Google recently closed its $12.5 billion acquisition of Motorola, a deal made in part because of Motorola's large trove of intellectual property.
The International Trade Commission holds powerful influence in patent cases because it has the power to issue orders to block imports of products found to infringe patents. It recently issued a ruling that Motorola infringed a Microsoft patent, creating the possibility that some Motorola phones could become unavailable in the U.S.
Turning to the FTC's hiring of high-profile litigator Beth Wilkinson to lead its antitrust probe of Google, Leibowitz said, "It doesn't mean we're going to make a case at all."
He added: "Maybe it sends a signal, but more importantly it ensures we have a really terrific litigator, if we need one."
Google disclosed last year the FTC is conducting an antitrust investigation of the company's dominance in the online-search advertising business.
Last month, the FTC said it had tapped Wilkinson to lead its investigation. Wilkinson has been working as a partner at Paul, Weiss, Rifkind, Wharton & Garrison LLP, and has been both general counsel at Fannie Mae and a U.S. Justice Department prosecutor.
"This 'expensive lawyer' is doing it for a government rate," Leibowitz said Thursday, in a moment of levity.
He added that much of the decision to enlist Wilkinson came from her own willingness to take part.
"When you have the opportunity to get someone of Beth's stature and abilities," he said, "you would always want to take her up on it."
-By John Letzing, Dow Jones Newswires; 415-765-8230; john.letzing@dowjones.com
--Don Clark contributed to this article.
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