U.S. FTC announces settlement concerning breach of FRAND licensing commitment

On 26 November 2012 the U.S. Federal Trade Commission (”FTC”) announced a proposed settlement with Robert Bosch GmbH (”Bosch”) to resolve concerns relating to Bosch’s acquisition of SPX Service Solution U.S. LLC (”SPX”).

A notable aspect of the proposed settlement is that apart from addressing concerns that the acquisition would confer Bosch monopoly power in the market for air conditioning recycling, recovery and recharge (”ACRRR”) devices, the proposed settlement also resolves the FTC’s allegation that (prior to being acquired by Bosch) SPX harmed competition in the ACRRR market by reneging on a commitment to license standards essential to industry standards pertaining to ACRRR devices on fair, reasonable and non-discriminatory (”FRAND”)  terms. According to the FTC, SPX instead pursued injunctions to block rivals who were willing to license the technologies on FRAND terms.

To address the concerns about SPX’s practices relating to essential patents, the proposed settlement requires Bosch to not pursue injunctive relief and to offer the patents royalty-free to implementers of the standards in the ACRRR market. Moreover, Bosch will provide an assurance that it will also license any subsequently acquired patents that are essential to the relevant industry standards on FRAND terms to any willing implementer, without seeking injunctions.

The FTC voted 3-2 to approve the complaint and settlement. Commissioners Ohlhausen and Rosch voted no in objection to the allegations concerning essential patents. Commissioner Ohlhausen issued a dissenting statement explaining her view that seeking injunctive relief, even in breach of a licensing commitment, should not be deemed a violation of Section 5 of the FTC Act (15 U.S.C. § 45). [Juha Vesala]