Google to FTC: Apple's design patents should be FRAND
updated 01:39 am EDT, Sun July 22, 2012
Consumer popularity makes some patents essential, claims Google
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. [via All Things Digital]
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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.
Duh.
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.