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Consumer Watchdog Alleges Google Has "Inappropriately Benefitted" From Ties to Administration, USPTO

By Peter Zura

Today, Consumer Watchdog, self-described as "a nonprofit, nonpartisan consumer advocacy organization" sent Rep. Darrell Issa (R-CA) a 32-page report arguing "how Google has inappropriately benefited from its close ties to the Obama Administration."

On the "full disclosure" front, Consumer Watchdog has been a longtime (and relentless)  critic of Google, and recently received flak on it's criticism of Google's privacy policies and decision to run a Times Square jumbotron advertisement in September portraying Google as a massive invader of privacy, and caricaturing its ex-CEO Eric Schmidt as a "creepy, high-tech ice cream vendor who profiles children" (link1, link2).

In its latest salvo, CW released a report, culminated from a six-month study, alleging multiple questionable relationships between Google and NASA, the Dept. of Homeland Security, the Federal Communications Commission, and others.  Interestingly, CW implicates the USPTO as well, arguing that that the Office's 2009 deal with Google to publish patent and trademark information for free gives Google "inequitable advantages" over rivals:

Google now has a head start on its rivals in the fiercely competitive cloud computing market, thanks in part to deals inked with the US Patent and Trademark Office and the General Services Administration in the past year. In both cases, Google enjoyed the benefits of support from federal chief information officers. In both cases, a few people involved in the process voiced objections.

Google?s successes started in November 2009 when the USPTO announced its intention to give a sole?source contract to the search engine to make patent and trademark information available to the public for free. 

Google?s rivals in the field of patent and trademark publishing complained in writing about the contract.  The USPTO then opened the contract to bidding ?? on the condition the service be provided for free. USPTO CIO John Owens continued to push for approval of Google telling company officials in an email in December 2009, ?I have quite a bit of pressure to get this deal signed.? Owens didn't explain from where that pressure was coming.

None of the publishing firms bid on the contract.  The no?cost nature of contract would have an ?anticompetitive effect,? said an industry group, the Coalition for Patent and Trademark Information Dissemination.  The arrangement, said a spokesman in a letter to USPTO, would give Google ?inequitable advantages in timing, branding and inside technical information? that ?are clearly in violation of existing statutes, and would result in unfair competitive advantage over other resellers of patent and trademark information.?

The reason for the group?s concern boils down to the way Google seems to be copying tactics pioneered by Microsoft in order to gain advantages in certain markets. When a company gives away something for free, it is obviously subsidizing the product or service. If that free good or service is obtained on an exclusive basis, it could constitute an illegal advantage. In the case of the PTO, the arrangement seems to raise questions about whether Google, by subsidizing access to certain government information, could ultimately gain a monopoly over that information as other companies find it impossible to compete.

The USPTO officials pushed to get the contract signed before a scheduled meeting between Secretary of Commerce Gary Locke, Director of Patents David Kappos, and Google CEO Eric Schmidt in February 2010.  When the contract was announced, PTO procurement chief Kate Kudrewicz told her contracting officer, ?President Obama will be very pleased to hear this news.? Also copied on the e?mail were Google executives Andrew Young and John Orwant.

To read/download the full report, click here (link)

To read CW's letter to Rep. Issa, click here (link)

Full post as published by Two-Seventy-One Patent Blog on January 24, 2011 (boomark / email).