The Federal Trade Commission is lending its support to Apple, arguing that Motorola's attempts to ban the sale of iPads and iPhones allegedly infringing on Motorola patents in a now-dismissed case "risks harming competition, innovation, and consumers."
The U.S. trade agency made the arguments in an amicus brief (PDF) filed today with the U.S. Federal Circuit Court of Appeals, explaining that owners of standard-essential patents (SEP) use the threat of injunctions to demand higher royalties and other favorable licensing terms that owners would not likely have been able to negotiate before the patent was declared a standard.
"Once a standard is adopted, and implementers begin to make investments tied to the standard, it becomes very difficult to change a technology in the standard without impairing interoperability," the FTC said in a statement. "The SEP holder can then engage in hold-up by seeking compensation based not on the value of its invention, but on the costs and delays of switching away from the standardized technology."
Without passing judgment as to whether Apple actually infringed on Motorola's patents, the FTC said that when talks break down over licensing terms, "the proper approach is usually to limit the relief available to the patent holder -- specifically, to allow only monetary damages, and not an injunction that prohibits the sale of products incorporating the patented technology."
The brief was filed as part of an Illinois patent lawsuit related to a passel of technologies used in tablets, smartphones, and other mobile devices that was dismissed in June. The FTC's filing addresses the case in the appeals process.
The FTC's concerns about the anticompetitive effects of a threatened injunction echo statements the agency made earlier this year in reference to a Motorola case against Microsoft. In a letter in June to the U.S. International Trade Commission -- a federal agency with the power to enforce bans on products shipping to the U.S. -- the FTC suggested companies should be limited in their ability to block competitors' imports based on patents that are built into industry standards.
A representative for Motorola parent company Google declined to comment on the filing. CNET also contacted Apple for comment and will update this report when we learn more.