Report: Google and Motorola being investigated by FTC for not honoring FRAND commitments

Report: Google and Motorola being investigated by FTC for not honoring FRAND commitments
Bloomberg is reporting that the FTC is investigating both Google and its wholly owned Motorola Mobility subsidiary for not adhering to commitments to license FRAND (fair, reasonable, and non-discriminatory) patents. Google has received a civil investigative demand, similar to a subpoena, from the FTC. The government agency is looking at the two l's that have been so much in the news, licensing and litigation.

Also being questioned by the FTC are Microsoft and Apple as the agency tries to discover whether Google plans to offer licenses based on FRAND terms for standards-essential patents on 3G connectivity, Wi-Fi, and H.264.When the Justice Department agreed to let Google buy Motorola Mobility, and allowed a group led by Microsoft and Apple to buy patents from Nortel, the agency said it would keep a close eye on the companies involved to make sure that there was no patent misuse. Both Apple and Microsoft agreed not to prevent  FRAND licensing of standards-essential patents. Google agreed to the same thing, but only if the negotiations were on good-faith and that it had the right to go to court if no licensing agreement could be made.

To understand the amount of money that is at stake here, Motorola Mobility usually asks for 2.25% of the cost of an entire device that uses one of its patents. For Microsoft's Xbox 360, Motorola receives $4.50 for each device sold. For the H.264 patent that Microsoft needs for Windows, the 2.25% for the video playback patent in question, would add up to billions of dollars, assuming the average PC is priced at $500. That would be much larger than the capped license fee of $6.5 million demanded for the patent by MPEG LA. The bottom line is that the FTC wants to make sure that Google is honoring its pledge to license these patents at a fair price and would have to accept a much lower price for the H.264 patent.

source: Bloomberg via electronista

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34 Comments

1. KingKurogiii

Posts: 5713; Member since: Oct 23, 2011

yeah, for that kind of money Google could get it down a little... xD

9. rf1975

Posts: 264; Member since: Aug 01, 2011

Do you think that Google buy a loosing company for more than 12b $ just for protect Android? All the companies will become evil when it comes to money... Apple.......ebook price fixing...... Samsung...........LCD panel price fixing..... Google.............If you thing they do no evil then do a Goole Seach :-)

18. MartyK

Posts: 1043; Member since: Apr 11, 2012

"Motorola Mobility usually asks for 2.25% of the cost of an entire device that uses one of its patents" here is a solution to MS and APPLE problem, don't use all of Motorola patents then, instead of wireless, use wire, instead of H.265 use MPEG-4 There are work around if you don't want to pay 2.25%, this is what Motola always ask for per patent, I see no evil here folks.

2. Yummy

Posts: 117; Member since: Mar 28, 2012

Lol, that's a lot money.

3. MorePhonesThanNeeded

Posts: 645; Member since: Oct 23, 2011

Lots of money but who told MS to not license in the first place...what kind of oddball stuff is this anyway? Moto usually charges 2.25% but for some reason when it comes to Windows MS doesn't want to pay that sum because it would mean billions, so why doesn't the FTC decide from what time they can get the money from. I think that the patent was probably in the pending stages for MS to have infringed upon it to such an amount, because if they were paying this from the get go, this sum wouldn't have been a problem. Now it's a lump some of backed up bills, and the FTC wants them to take less than the 2.25%, if 2.25% amounted to billions then how much did MS make of the rest?

19. MartyK

Posts: 1043; Member since: Apr 11, 2012

Amen!..

4. ardent1

Posts: 2000; Member since: Apr 16, 2011

If the two largest software companies (MS & Apple) can agree to FRAND, you have to wonder what the hell was Google smoking. Does anyone recall Google's motto of: Do no evil?

5. taco50

Posts: 5506; Member since: Oct 08, 2009

That's out the Window. Google has been very anti competitive lately. Manipulating search results, claiming open source when they're not etc. Hopefully they get slapped with a fat fine.

6. Otterbox

Posts: 71; Member since: Jun 27, 2012

Google is too big for its pants. That's why they think they can get away with anything. They deserve the fines.

8. tegradragon

Posts: 68; Member since: May 23, 2012

How are they NOT open source? I mean, I'm not a die hard android fan and neither do I use it, but if Google is anything, it is open source!

10. PackMan

Posts: 277; Member since: Mar 09, 2012

What would an Apple fan know about open source? Apple is the ultimate epitome of anti-competitiveness, even more so than Microsoft. That Steve jobs bitched about people stealing his work from the moment Apple was established, and he kept bitching till he died. What a juvenile bastard, vowing to destroy other companies. Just look at the patent wars. Che, pathetic.

28. InspectorGadget80 unregistered

Apple have been very nom competitive yet they keep banning HTC/SAMSUNG.

7. Sniggly

Posts: 7305; Member since: Dec 05, 2009

Jesus, look at the little circlejerk of Google haters. "What the hell was Google smoking?" "Google has been very anti competitive lately" "They deserve the fines" And yet, when Apple fixes prices, tries to get jailbreakers imprisoned, and sues the s**t out of people over "slide to unlock" and voice actions that were on other OSes years before they had it, you guys have... ... ... ... zero problem? Give me a big, honkin' goddamn break. Addendum: these patents are Motorola's, so the issue is really with what Moto's been doing with the patents. Google's been given the subpoena just because they own them.

11. KissyQueeny

Posts: 17; Member since: Jun 12, 2012

I advise you to be a little less patriotic about these companies... get a life, simply put ;)

12. parkwaydr

Posts: 572; Member since: Sep 07, 2011

Dude your on a tech site full of cell phone geeks. Don't like it? Then gtfo. Got your back sniggs. ;)

13. rf1975

Posts: 264; Member since: Aug 01, 2011

What do you mean by cell phone geek? Did you mean pepole who changes wall paper, widget & flashing custom ROMs or doing unlock using exploit & porting ROM from one to another phone which is not intended to work on letter.

14. parkwaydr

Posts: 572; Member since: Sep 07, 2011

The term geek can be used for some one who is really in to something in particular, for instance, I consider myself a comic book geek, its like when someone is addicted to shoes they are called sneaker heads. It just means your really in to something. Which I venture to say is 90 percent of the users on this sight.

23. bayusuputra

Posts: 963; Member since: Feb 12, 2012

LOL.. it's not about patriotism towards a company, more like disliking what a particular company has done in order to clamp down competitors.. i really think apple is the most hypocrite, stuck up, greedy and less-innovative tech company today.. they got a lot of money for selling bulls**ts that uninformed mass buy.. i feel pity for these buyers..

26. Otterbox

Posts: 71; Member since: Jun 27, 2012

You sound butthurt here. Google is known to be anti competitive. Google+ and search. Google tried manipulating their search results so social results from their own social network would get favorable treatment over results from Facebook and twitter. That's anti competitive no matter how many times you want to deny it. Give yourself a break.

29. Sniggly

Posts: 7305; Member since: Dec 05, 2009

No it isn't, and for you to claim it is demonstrates your total lack of understanding of economics and what "anti competitive" really is.

30. taco50

Posts: 5506; Member since: Oct 08, 2009

That is the definition of anti competitive especially since Google has a near monopoly on search hypocrite.

31. BattleBrat

Posts: 1476; Member since: Oct 26, 2011

They can't help it if Bing and Yahoo suck...

34. PapaSmurf

Posts: 10457; Member since: May 14, 2012

The same way Apple wants an monopoly in the mobile tech world? Gtfo. Apple has gained thousands of patents for sh.t they never came up with. Slide to unlock, siri, and shape patents are all bullsh.t and should never exist. But according to you, its okay to patent a rectangle when its origin is thousands of years ago. Cool.

33. Otterbox

Posts: 71; Member since: Jun 27, 2012

Are you blind or just oblivious? Google is the largest search engine around. That's monopoly enough. Maybe you should learn basic economics.

15. networkdood

Posts: 6330; Member since: Mar 31, 2010

Receiving 4.50 from every XBOX sold is not fair? Doesn't Microsoft charge more to HTC for every one of their phones sold?

16. MorePhonesThanNeeded

Posts: 645; Member since: Oct 23, 2011

The xbox 360 terms is not the problem for MS, it's the terms on Windows, since windows is in 75%-80% of PC's sold MS would have to pay a crap load of money to Motorola. Frand clause prevent Motorola from going over a set amount overall, this is what MS is bitching about. For the retards who can't read, Google didn't do anything they just own Motorola and Motorola are still independently run. FRAND is weird because over the lifetime of something you will make much more money, than if someone stole your patent use and then have to pay back owed money. While this seems like fair and reasonable it still is a double edged sword where in the light of companies that can use it to get out of paying back enormous sums of cash and basically steal profits. Ah well this is the world we live in yes? How much did MS make off Windows considering that this patent includes Vista? They must have made billions themselves. I would love to see the numbers on that sum.

20. MartyK

Posts: 1043; Member since: Apr 11, 2012

Thank you, MS charge $5.00 per Android device , MMI is being nice , but knowing how MS are, they will try to weasel out of paying their bill (get a judge they OWN) to have this overturn. And as far as Apple, they are the one who wants the Thermo war, so they need to stop whining and running to court like a little __ and finish the war!.

22. rf1975

Posts: 264; Member since: Aug 01, 2011

There is a huge different between standard essential patent and non standard patent. Once your patent is part of a (global) standard then all the people whoever going to use this standard has to pay you for your patent under FRAND. But you can not charge them unfairly. But still you will get lot of money. Because this an essential technology for the standard. For example "3G standard". But this not the case with non standard patent. Every one is free to make the things on their way (without copying others intellectual property). But if one wants to use another's (non standard) technology patent then the first one has the freedom decide the licensing rate.

27. MartyK

Posts: 1043; Member since: Apr 11, 2012

Agree!, If you don't want to pay the small amount MMI is asking 2.25% PER Patent, use the work around methods. MS has been violating MMI Patent for years, thus they must pay-per-patent for ever single device that use MMI patent in the past. Someone in MS try to be slick,smart and greedy and awoke this sleeping giant when they attack Android, now they have to pay for their arrogance.

17. tomato

Posts: 3; Member since: Jun 30, 2012

I hope Google will win this case. MS & Apple were too evil

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