FTC Expresses Concern Over Handling of Standards-Essential Patents
The Federal Trade Commission is joining a number of regulators across the globe that are concerned with how courts handle battles related to patents necessary for various technology standards.
The Commission sent a note on Wednesday to the U.S. International Trade Commission expressing concern that companies that hold such patents could demand more-than-reasonable royalties for their patents by holding over companies the threat of seeking an exclusion order banning imports of products using the standard in question.
Motorola has been accused of doing so as part of its ongoing patent battle with Microsoft. Redmond-based Microsoft was therefore unsurprisingly pleased with the FTC’s action.
“We welcome the FTC’s statement agreeing with Microsoft that standard essential patent abuse harms consumers and competition,” deputy general counsel David Howard said in a statement. “The FTC joins a growing chorus of regulators from around the world who recognize the danger posed by companies who try to use standard essential patents to block the sale of products.”
Regulators in China and Europe have also expressed concern regarding the practice.
Speaking at the D: All Things Digital conference last week, Apple CEO Tim Cook also spoke out against the practice. Apple is also engaged in patent battles with Motorola.
“No one should be able to get an injunction off a standards patent, because the owner is obligated to license it in a fair and reasonable manner,” Cook said. “Apple has not sued anyone over standards-essential patents that we own, because we feel it’s fundamentally wrong to do that. The problem in this industry is that if you add up what everyone says their standards-essential patents are worth, no one would be in the phone business.”