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DOJ, USPTO side with Apple, say no sales bans for SEP claims

updated 10:00 pm EST, Tue January 8, 2013

Joint statement says infringement should lead to bans 'very rarely'

In a joint statement issued Tuesday, both the US Department of Justice and the US Patent and Trademark Office have issued a new policy that argues that sales bans on products that may or may not infringe on "standards-essential" patents (SEPs) should not be allowed except in very rare and specific circumstances. The ruling joins with a previous statement from the Federal Trade Commission, and is intended to influence both the ITC and specific abusing companies, such as Google.

Google, particularly through its Motorola Mobility unit, is one of the most frequent and litigious abusers of the principles of Fair, Reasonable and Non-Discriminatory (FRAND) licensing of what are considered essential patents, along with Samsung and HTC. The companies have frequently brought SEPs into play in court cases seeking sales injunctions on products from Microsoft and Apple, usually when the latter companies have charged the former companies with infringement on non-essential design or software patents. Overall, the strategy has had very few successes and has mostly backfired on the suing companies.

Both Apple and Microsoft have studiously avoided suing other companies for infringing on standards-essential patents and denounced cases based on them, though some of the patents both companies have sued over have on occasion later been ruled invalid. Late on Tuesday, and shortly after the announcement of the joint policy, Motorola moved to drop two of its SEP-based ITC complaints against Microsoft over the h.264 video standard.

The tendency of Google and Motorola to sue over SEPs has drawn the scrutiny of both the US government and the European Commission, the latter of which is still actively investigating the two along with Samsung for FRAND abuse. Google was recently forced to sign a 10-year consent decree that the FTC expects will result in the company's withdrawal in a number of ITC cases where the patents in question are considered standards-essential.

With all three of the main enforcement agencies of the US government now unified on the matter, the declarations are bound to carry a great deal of influence with the US International Trade Commission, which has the power to enforce sales bans on products imported to or exported from the United States. A spokesperson for the DOJ and USPTO said that the ITC should make "public interest" a leading factor in deciding whether to order an injunction against a product that uses (or even infringes on) a standards-essential patent. "The USITC, may conclude, after applying its public interest factors, that exclusion orders (sales injunctions) are inappropriate," thus making the decision to ban a product based on SEP charges extremely rare, the agencies said in their joint release.

At the core of most -- but not all -- of the SEP-based disputes between Google/Motorola and other companies is the royalty rate demanded for what are considered to be FRAND-eligible patents. Motorola in particular has stuck to a 2.25 or higher percentage (as has Samsung over patents regarding the 3G standard) as a royalty per patent, which Microsoft and Apple along with other tech companies have complained is wildly excessive. The two companies have also said that many of the companies making or selling Android-based systems have refused to license their SEPs in good faith.

The US ITC recently rebuffed a Motorola request to halt the sales of iPhones and iPads over a wireless technology patent, and Judge Richard Posner threw out patent-infringement suits from both Apple and Google, specifically blocking the latter from seeking a sales ban over a standards-essential patent.

by MacNN Staff



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