Will This Move End Smartphone Patent Wars?

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Part of Google’s (NASDAQ:GOOG) recent settlement with the U.S. Federal Trade Commission is a requirement to make new patent-licensing offers to rivals such as Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT). The dream of litigation resolution, though, is a far-fetched one, according to patent lawyers.

Google will have to offer competitors “fair and reasonable” terms for using its standard-essential patents, the agreement insists. In return, allegations that the search company, which bought Motorola Mobility for $12.4 billion last year, was abusing these essential patents to extract higher royalties were dropped. The FTC agreement also stops Google from trying to block sales or imports of rivals’ products during the licensing process.

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However, Google clearly didn’t buy the Motorola patents solely to monetize them, Jorge Contreras, an associate law professor at American University, told Bloomberg. “Google is saying the same thing they said in February, but with some more limitations,” Contreras said. “It still can go around and monetize the patents, but at the end of the day that’s not what Google bought them for. They didn’t buy them for a revenue stream as much as a defensive measure.”

Experts, as well as Google rivals, are also unhappy with the FTC settlement. Microsoft Deputy General Counsel Dave Heiner criticized the commission for not going far enough. “We are disappointed that the FTC accepted less relief from Google than the DOJ [U.S. Department of Justice] obtained from Microsoft and Apple last year,” Heiner wrote in a blog post. “The good news is that other antitrust agencies, within the United States and overseas, are still examining Google’s conduct.”

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Patent lawyer Robert Stoll of Drinker Biddle agreed, saying the agreement was “very confusing” and had “a lot of holes.” It may end up working, Stoll added, but more work was needed. “The FTC is trying, but I think they need more specificity, more engagement,” he told Bloomberg. “A few more of these and they can hone something with more structure.”

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