Google Inc. (GOOG) is close to settling allegations by the U.S. Federal Trade Commission that it violated antitrust law by trying to block access to key smartphone-technology covered by patents it owns, according to three people familiar with the matter.
The FTC will probably announce this week it has reached a consent decree that would limit Google’s ability to seek injunctions against competitors’ products that rely on so-called standard essential patents, said the people, who asked not to be named because terms of the settlement aren’t final. The decree would stop short of a complete ban on Google seeking injunctions against use of its patents where the company has agreed to license the technology on “fair and reasonable terms,” the people said.
At issue are Google’s efforts to block U.S. imports of Microsoft Corp. (MSFT) and Apple Inc. (AAPL) products by claiming the devices, which rely on industry-standard technology, infringe patents owned by Google’s Motorola Mobility unit, the people said.
The FTC opened a formal probe into the matter in June, when it began seeking information from companies including Microsoft and Apple about whether Google offered licensing for technology under patents that help operate 3G wireless, Wi-Fi and video streaming on fair and reasonable terms, a person familiar with the matter said at the time.
“We take our commitments to license on fair, reasonable, and non-discriminatory terms very seriously and are happy to answer any questions the FTC may have,” Adam Kovacevich, a Google spokesman, said. Cecelia Prewett, a spokeswoman for the FTC, declined to comment.
Industry-standard technology helps ensure that different manufacturers’ products, such as mobile phone antennas and global-positioning system software, work together. Companies that create technology that helps develop the agreed-upon industry standard pledge to license patents for those inventions on reasonable terms.
The patents settlement doesn’t address other issues the FTC has been investigating in a broader probe into whether Google’s business practices in Internet search, advertising and mobile devices hurt competition, the people said.
The FTC’s accord with Google appears to be less restrictive than its settlement with Robert Bosch GmbH last month, when it required Bosch to abandon claims for injunctive relief by SPX Service Solutions and ordered it to grant manufacturers licenses to key patents they need in order to compete, two of the people said.
Motorola Mobility is unlikely to get any injunctions against Apple or Microsoft in the U.S. in the next year even without any agreement with the FTC.
Its case against Apple was thrown out by a judge in Chicago who said the handset maker couldn’t receive a court order when it involved standard-essential patents. An appeals court is still gathering legal briefs before it hears arguments sometime next year.
A federal judge in Seattle on Nov. 30 said Google couldn’t use its standard-essential patents to block sales of Microsoft’s Xbox video-gaming system or Windows operating system. Google hasn’t yet filed the appeal in that case.
Google declined to give the antitrust division of the Justice Department a clear commitment to license the standard essential patents it obtained through its acquisition of Motorola Mobility in February, and to refrain from seeking injunctions, the division said when it approved the transaction.
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