received some happy news from the U.S. Patent
and Trademark Office(USPTO). Oracle Corp. (ORCL),
who contends that code used by Google's Android smartphone operating system infringes on patents held by Oracle acquisition Sun
Microsystems, was dealt a setback by the USPTO who recently reexamined three of
I. Victory Over Oracle
Oracle's patents pertaining to Java were dissected during a re-review by the USPTO.
Of the 66 claims in the patents, 50 of them were subjected to
reexamination. Of those, 46 of them were ruled invalid. At a 92
percent invalidation rate, the USPTO is sticking close to the 90 percent rejection
rate that academic studies found it averages during re-reviews.
If Oracle's remaining four patents receive similar treatment, Oracle's six
patents could be reduced from around 168 claims to around 51 claims.
Further, as some of the remaining claims are likely dependent claims, the
damage to the patents will likely be severe, if the current course is followed.
Depleted of its legal firepower, Oracle may be forced to drop the case or offer
Google a favorable licensing settlement. In short things are looking very
good for Google in the case.
II. Google Staff Face Subpoenas
In the bad news department, the U.S. Federal
Trade Commission is reportedly preparing to issue subpoenas of
Google staff in the investigation into whether it abused its dominant search
and web-advertising position, according to The
Wall Street Journal.
Subpoenas are a key tool to investigators as they can provide key testimony and
insight into a company's inner workings. While the investigation is
currently only a probe, the results of the subpoenas could lead to a full
Antitrust lawyers say it will be difficult to prove that Google acted illegally
and abused its internet monopoly. The company is facing lawsuits that claim it looked to
crush small service competitors in the Android ecosystem, using underhanded
tactics. However, emails obtained in these cases show Google employees
learned from the 1990s antitrust case against Microsoft Corp. (MSFT)
and were more careful about what they committed to writing.
That said, Google has set aside $500M USD, according to financial
documents, to cover possible antitrust fines.
Google, currently under investigation being formally
investigated by the European Union for antitrust violations, serves
approximately two-thirds of internet searches. The company's rivals
accuse it of deceptive display of search content, using rival firms' content
without permission, manipulation of search results, and buying out would-be
Describes Fairsearch.org, an industry group representing
Microsoft, Expedia, Inc. (EXPE),
Kayak.com, and Sabre Holdings, "Google engages in anticompetitive
behavior…that harms consumers by restricting the ability of other companies to
compete to put the best products and services in front of Internet users, who
should be allowed to pick winners and losers online, not Google."
Finer details will likely be ironed out as the FTC balances Google and its
competitors’ statements. Nonetheless, subpoenas would make the first
major probing of Google's competitive behavior, not pertaining to a specific
acquisition. For that reason Google's executive management can't be too
thrilled about this development.