Google had their come to Jesus moment with the Federal Trade Commission over this whole anti-trust nonsense last week, and pretty much nothing came of it. Well, Google did promise to play nice with others and to not dork up search results, but that’s about it. While companies fantasized about a Microsoft like beat down from the ITC, they chose instead to do the right thing to protect competition, not individual competitors.
While the agreement was nothing like what Microsoft had envisioned the outcome for Google to be, the FTC didn’t exactly forfeit the game. Google, among other things, pinky swore that they wouldn’t seek import bans on competitor products based on Standards Essential Patents.
SEPs are patents that are pledged by various companies to establish a standard, in this case the H.264 video compression standard. By setting this standard, the companies that pledge their patents to the pool agree to license all of that IP to any party willing to license them on FRAND terms. And of course, FRAND is an acronym for Fair Reasonable and Non-discriminatory.
Motorola had pledged certain patents that they owned to the patent pool for the H.264 video compression standard prior to the Google takeover, but Microsoft and Motorola just never came to terms on what the royalty rate would be. Google buys Motorola and bam, ITC claim over the Xbox.
In a nutshell, Microsoft was willing to pay, but not what Motorola and then Google wanted them to pay.
True to their pinky pledge, Google filed a motion late this afternoon with the ITC to withdraw their action against Microsoft in regards to these two patents. While that may seem like a clear cut victory for Microsoft, this is meaningless, and here’s why: nothing was ever going to come of this.
These patents were FRAND pledged and are but a small part of the total patent pool that makes up the H.264 standard. And they are nowhere near essential enough to the features of the Xbox to warrant an import ban. Further, there are a lot of companies that have already licensed these patents from Motorola, so FRAND rates are pretty much already set in stone. There was never any hope of achieving anything more than a small payday and some type of settlement to end all patent disputes between the two companies.
This doesn’t totally end the ITC action that Google filed against Microsoft, as there was one patent that was not standards pledged. There are also other SEP actions that Google has has going in the US and Europe, but this is at least a symbolic victory for Microsoft.
Source: All Things D