When Google acquired Motorola it not only got the company but its patents as well. The company admitted that almost half of the $12.4 billion it paid went to acquire the intellectual property holdings of Motorola. The problem is that Motorola’s Fair, Reasonable and Non-Discriminatory (FRAND) dispute with the FTC was carried over to Google.
This is why Google faced charges with the FTC for allegations that the company has backed off of commitments to license essential patents under FRAND terms. Competitors claimed that Google refused to patent licenses which are covered under FRAND and are vital in the smartphones and tablets.
A total of 25 companies and interested parties went to the FTC for assistance on this matter. They claim that Google’s refusal to allow the patents to be used was damaging the competition in the industry.
The FTC and Google have agreed on a settlement on this matter. While the settlement does not require Google to be at fault, it does make the company “abide by its commitments to license its standard-essential patents on fair, reasonable, and non-discriminatory or FRAND terms.” as what the FTC announced.
The FTC said in a letter addressed to those who made a public comment on the case stating that “An implementer can negotiate licensing terms without facing the threat of an injunction, but Google is not barred from responding to an implementer that misuses the protections in the order to delay rather than facilitate entering into a FRAND license. In addition, Google has recourse if an implementer refuses to take steps to obtain a FRAND license, or to enter into a license after a FRAND rate is determined. Like any other licensor, Google also has the right to seek treble damages for willful infringement.”
A summary of the FTC ruling states that “The Final Order requires Google to abide by its commitments to license its standard-essential patents on fair, reasonable, and non-discriminatory or FRAND terms. These standard-essential patents are needed to make popular devices such as smart phones, laptop and tablet computers, and gaming consoles. The agency alleged that Google had reneged on these commitments and pursued – or threatened to pursue – injunctions and exclusion orders against companies that need to use standard-essential patents held by Google’s subsidiary, Motorola Mobility LLC (MMI), in their devices and were willing to license these patents on FRAND terms.”