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Google recently sent a 15-page letter to a Congressional committee on fair, reasonable and non-discriminatory (FRAND) licensed "standards-essential" patents (SEPs). In it, the search giant says it believes that if proprietary or de facto patents become standards by way of consumer popularity, the committee's concern about licensing abuse should encompass these patents as well. Eight days later, after having caught wind of Google's letter and its suggestion, Apple vigorously disagreed in its own nine-page statement. Google, it said, is essentially calling for Apple patents to become FRAND patents simply by virtue of the technologies being successful.
Google's letter comes at a time when its recently-acquired Motorola Mobility is calling for unpopular potential product import bans against Apple and Microsoft, as well as having to defend itself against charges by its rivals that Motorola (and by proxy, Google) are abusing the FRAND principles. The FTC is also in the process of iinvestigating FRAND licensing abuse by Motorola and parent-company Google, as is the European Commission.
In Google's letter, General Counsel Kent Walker agrees standards are vital to the industry, but argues that core technologies aren't the only source of potential standards. Referring to the expansion of standards-essential-type regulation to design patents, Walker said that "because ... de facto standards can have just as important effects on consumer welfare, the Committee's concern regarding the abuse of SEPs should encompass them as well."
Apple's rebuttal letter suggests that standardized technologies make cross-platform compatibility possible by using the same technologies at the core. Non-standard technologies and designs, the company argues, are used to differentiate these devices and drive innovation, thus building a platform for competition in the retail market. Subjecting other types of patents, such as design, to the same rules as standards-essential patents -- like the H.264 playback patent held by Motorola and being asserted against Apple and Microsoft -- will hinder innovation and hurt consumers.
Apple General Counsel Bruce Sewell said in the letter than Apple spent billions in research and development to create the iPhone, and that the price of the phone "reflects the value of these nonstandardized technologies -- as well as the value of the aesthetic design of the iPhone, which also reflects immense study and development by Apple, and which is entirely unrelated to standards."
Standards-essential patents have seen a lot of publicity in recent months. Tim Cook at the D10 conference discussed them at some length, with a highly-regarded judge taking a stand against them in a ruling dismissing one Apple and Motorola legal battle. The letters arrived during the US Congressional session examining the patent sector, and evaluating if FRAND rules need to be modified. [viaAll Things Digital]
Walker said that "because ... de facto standards can have just as important effects on consumer welfare, the Committee's concern regarding the abuse of SEPs should encompass them as well."
I can see Yahoo and Microsoft making similar representations for Google's highly-successful patented search algorithm to be opened up for FRAND licensing to all needy parties, including their arch-rivals.
Standards set the platform for interoperability and competition; design and other non-essential patents provide the differentiation in competing products. To rule otherwise would imply a move towards collectivisation, communism, which would hamper competition and innovation, not promote it.
"the search giant says it believes that if proprietary or de facto patents become standards by way of consumer popularity..."
In other words, Google is saying: "If we infringe Apple's non-standards based, proprietary patents, and make these stolen inventions popular on our products, then we should be rewarded for these infringements and this should automatically turn Apple's proprietary inventions into standards-based FRAND patents.
This is purely a public relations move by Google. They're trying to conflate two completely different types of patents: FRAND-encumbered standards patents and proprietary design patents for product differentiation. The FRAND-encumbered patents Motorola is trying to use against Apple (and others) cover basic technology that must be used by anybody who wants to build smartphones. Because there are no reasonable alternatives to the patented technologies. Apple's design patents, on the other hand, cover proprietary details specific to iPhone. The designs and technologies that make an iPhone different from all other smartphones. The designs and technologies that competitors wish they had patented first.
Google will be granted these rights and Apple will lose. The courts will continue to decide in Google's favor based on anything that hurts Android, hurts consumers as well. Android is now considered a powerful standard that is good for consumers due to the open nature of the OS and the low cost of devices. Apple is seen as the bad guy, the bully, always cheating consumers by charging them too much. There's no way the courts will ever decide in Apple's favor. They'd gladly disregard all of Apple's patents and render them FRAND to keep Android competitive. No judge is going to punish Google and Android devices for playing Robin Hood. The courts are already sick of Apple for causing them and the industry so much trouble.
Google's search algorithm should be a FRAND patient because their search engine is so popular, the majority of the planet uses it. They also have revenues to backup that claim, it's essential to finding anything useful on the internet.
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