December 7, 2012

Bob Stoll Quoted in Bloomberg Businessweek on the FTC's Participation in Patent Licensing Royalties

Washington, D.C., partner Bob Stoll was quoted in Bloomberg Businessweek in an article titled, “Microsoft, Google Patent Fight Rests on Defining Fairness.”

The article notes that a recent federal ruling that Google can’t wield some patents to block the sale of Microsoft products may point toward resolution of a fundamental question underlying the global smartphone wars – the question of a fair and reasonable royalty.

Owners of patents used in industry-wide standards for technologies pledge to license their inventions on “fair, reasonable and non-discriminatory terms.” No court, however, has defined that concept, which helps spark conflict when companies can’t agree on a fee. U.S. District Judge James Robart, who ruled on Nov. 30 that, because Google’s Motorola Mobility had agreed to license its standard-essential patents, it was only entitled to seek fair royalties from Microsoft, not to ask the court to forbid sales of Microsoft products that use standards including those patents, will next figure out what fees Microsoft should pay.

The Federal Trade Commission has also signaled it wants a greater role in determining what’s fair and reasonable. The agency, in a recent 3-2 decision, forced Robert Bosch GmBh to make standard-essential patents for air conditioners available to competitors as a condition for approving acquisition of the patent owner.

Bob commented that “the FTC is right to take a look at this because we don’t have any overarching group looking at the standard-setting organizations.” He continued, “The consumer is harmed if the other companies can’t use those standards. The purpose of ‘fair and reasonable’ is to give everyone an even playing field.”

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