Google, U.S. regulators close to deal in patents dispute - sources

WASHINGTON Wed Dec 12, 2012 2:26am IST

A neon Google logo is seen at the new Google office in Toronto, November 13, 2012. REUTERS/Mark Blinch/Files

A neon Google logo is seen at the new Google office in Toronto, November 13, 2012.

Credit: Reuters/Mark Blinch/Files

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WASHINGTON (Reuters) - U.S. regulators are near a settlement with Google Inc (GOOG.O) in a dispute over the search giant's efforts to stop the sale of products it says infringe essential patents, according to two sources close to the probe.

But the Federal Trade Commission is not expected to reach a deal soon on the larger, more contentious issue of whether Google tweaks its search results to disadvantage rivals in travel, shopping and other specialized searches.

Its rivals say Google fears the specialized sites will siphon away its most lucrative advertising and the revenue that goes with it.

Under the expected settlement, which could be announced this week or next, Google will be required to drop demands for injunctions in lawsuits filed using a special class of patents called standard essential patents, or SEPs, the sources said.

SEPs ensure, for example, that one brand of wireless phone can call another brand.

There would be an exception to the injunction ban, however. Google would be allowed to request injunctions if companies refuse to negotiate SEP licensing at all, the sources said.

SEPs are usually expected to be broadly licensed for a reasonable price. One view is that if a company convinces a standard-setting organization to name its patent as the standard, that company should be barred from asking for an injunction if there is infringement.

The larger investigation, which is more than a year old, addresses search bias as well as smaller items that aggravate Google's rivals in Silicon Valley and beyond.

These include taking data, such as hotel reviews, from non-Google web sites to use on Google products, and preventing the export of data on advertising effectiveness to non-Google software so ad campaigns can be evaluated.

The European Commission is investigating many of the same allegations.

Google's critics, disappointed with the trajectory of the FTC probe, appear prepared to take their grievances to the U.S. Justice Department.

At least one Google adversary met with Justice Department officials recently, pressing them to investigate if the FTC fails to get a satisfactory settlement on search or litigate against Google, according to sources with knowledge of the situation.

The Texas attorney general's office is also leading a probe into Google's practices.

(Reporting By Diane Bartz; editing by John Wallace)

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