United States of America 

FEDERAL TRADE COMMISSION 

Washington, D.C. 20580 

 Office of the Secretary 

 Re: In the Matter of Robert Bosch GmbH, File No. 121-0081, Docket No. C-4377

 Thank you for your comments regarding the proposed Consent Order accepted by the 

Federal Trade Commission for public comment in the above-captioned matter. The proposed 

Consent Order is designed to remedy the anticompetitive effects resulting from Bosch’s 

acquisition of SPX Service Solutions U.S. LLC (“SPX Service Solutions”) from SPX 

Corporation (“SPX”). It also is designed to remedy anticompetitive conduct by SPX in violation 

of Section 5 of the FTC Act. 

 

The Commission received nine public comments, including yours, during the public 

comment period expressing a variety of viewpoints on the proposed Consent Order. Some of the 

comments were supportive of the proposed Consent Order, others expressed concerns. This letter 

addresses the primary concerns submitted to the Commission, as well as statements received 

from other commenters. 

 

Some commenters suggested that the Commission’s actions in this case are outside of our 

Section 5 authority and lack a limiting principle. We disagree. As reflected in the Commission 

Statement accompanying this matter, this action is well within our Section 5 authority. The plain 

language of Section 5, the relevant legislative history, and the long line of Supreme Court cases 

all affirm that Section 5 extends beyond the Sherman Act.1

 Moreover, the Commission’s action 

occurs in the standard-setting context, long an area of enforcement and concern for the 

Commission due to the significant impact of standard setting activity on innovation and 

competition. 

 

 Some commenters expressed concern that the Commission’s proposed Consent Order 

limiting Bosch’s ability to seek injunctive relief in patent litigation involving certain standard 

essential patents (“SEPs”) may implicate the Noerr-Pennington doctrine (“Noerr”) and its 

protection of the First Amendment right to petition for redress of grievances. As noted in the 

Commission Statement for In the Matter of Google Inc., we do not believe that imposing Section 

5 liability where a SEP holder violates its commitment to license its SEPs on fair, reasonable, 

and non-discriminatory (“FRAND”) terms offends the First Amendment.2

 

 

1 In the Matter of the Robert Bosch GmbH, FTC File No. 121-0081, Statement of the Federal Trade Commission 

(November 26, 2012) available at http://www.ftc.gov/os/caselist/1210081/121126boschcommissionstatement.pdf. 

2 See In the Matter of Google Inc., FTC File No. 121-0120, Statement of the Federal Trade Commission (January 3, 

2013), available at http://ftc.gov/os/caselist/1210120/130103googlemotorolastmtofcomm.pdf. 
Federal Trade Commission Response To Commenters 

Page 2 

 

 Here, Bosch’s predecessor, SPX, made a commitment to the standard setting 

organization, SAE International (“SAE”), to license its SEPs on FRAND terms. The 

Commission had reason to believe that in doing so, SPX willingly gave up its right to seek 

injunctive relief against a willing licensee. SPX nonetheless sought injunctions against 

implementers of the SAE standard that incorporated SPX’s patented technology. In these 

circumstances, imposing Section 5 liability “simply requires those making promises to keep 

them. . .”3

and does not offend the First Amendment or the Noerr doctrine.4

Some commenters expressed concern that prohibiting injunctions through a Section 5 

consent order could undermine the role of federal courts and the International Trade Commission 

(ITC). We disagree. The statutory role the Federal courts and the ITC play in patent disputes 

does not preclude the Commission from exercising its independent authority under Section 5 of 

the FTC Act, nor does the Commission’s action undermine the separate authority of these other 

institutions.5

 When, as here, private contractual and patent disputes have a significant bearing on 

the competitive dynamics of the marketplace, it is appropriate for the Commission to intervene. 

Indeed, the competitive implications of the standard setting process led the Commission to use 

its authority here – as it has for nearly 20 years – to safeguard the integrity of the process. When 

implementers cannot rely on a standard-essential patent holder’s commitment to license on 

FRAND terms, this can create market uncertainty and result in economic harm to consumers. 

The Commission was created to address harm to consumers and the competitive process – the 

behavior at issue in this matter -- and this enforcement action falls squarely within our statutory 

authority. 

 

 Some commenters suggested that Bosch lacked adequate incentive to negotiate in its own 

interests regarding the standard-essential patents because the company wanted to settle the matter 

with the FTC and complete its acquisition of SPX. The Commission has no reason to believe 

that Bosch lacked the incentive and means to fully represent its own interests in this matter. 

Although not a litigated matter, Bosch and SPX were represented by competent counsel 

throughout the FTC’s investigation and negotiations leading to the proposed Consent Order. 

During extensive negotiations with FTC staff, Bosch and SPX, armed with full knowledge of 

SPX’s pre-acquisition conduct, evaluated the Commission’s concerns and applicable law, and 

determined that entering into the Proposed Order at that time was in their best interests. 

 

3 Cohen v. Cowles Media Co., 501 U.S. 663, 670-71 (1991). 

4 See supra note 2 at 5 n. 15 (citing Powertech Technology, Inc. v. Tessera, Inc., 872 F. Supp. 2d 924, 931-32, (N.D. 

Cal. 2012) (holding that when the patent holder had contracted away its rights to bring claims before the United 

States International Trade Commission, a challenge to a breach of that commitment was not barred by Noerr)),

 

5 See Prepared Statement of the Federal Trade Commission, United States Senate Committee on the Judiciary, 

“Oversight of the Impact on Competition of Exclusion Orders to Enforce Standard Essential Patents,” July 11, 2012, 

available at http://www.ftc.gov/os/testimony/120711standardpatents.pdf. 
Federal Trade Commission Response To Commenters 

Page 3 

 Some commenters expressed concern that the risk of hold-up actually is not a factor in 

patent licensing negotiations. We disagree. The Commission has ample justification for taking 

action where it has reason to believe that conduct will facilitate patent hold up in the standardsetting context. The threat of an injunction or exclusion order distorts the bargaining dynamic 

between the owner of a standard-essential patent and a potential licensee in a way that 

undermines the procompetitive goals of the FRAND agreement. As the Commission noted in its 

recent statement to the ITC, “[T]he threat of an exclusion order may allow the holder of a 

[F]RAND-encumbered SEP to realize royalty rates that reflect patent hold-up, rather than the 

value of the patent relative to alternatives, which could raise prices to consumers while 

undermining the standard setting process.”6

 

 Some commenters expressed concern that providing royalty-free licenses to industry 

participants other than Mahle, the buyer of the divested Bosch ACRRR assets, went beyond what 

is appropriate to settle this case. The Commission considered this issue in the course of 

resolving the case, but determined this remedy to be appropriate, and continues to believe that it 

is appropriate, due to the particular facts of the case. Specifically, prior to the merger, Bosch and 

two other competitors were defendants in a patent infringement lawsuit brought by SPX 

involving potentially standard-essential patents. As a result of the merger, Bosch acquired the 

SPX patents. As part of the divestiture, Bosch chose to license the SPX patents to the buyer of 

its ACRRR business, Mahle, on a royalty free basis. Without a similar license to the other codefendants and other market participants, a license solely to Mahle risked creating an 

inappropriate distortion of the pre-merger market and thus a remedy that would have been 

inequitable in application. Accordingly, the Commission required, and Bosch agreed, to license 

other market participants on the same terms that it agreed to license Mahle. 

Some commenters raised concerns that the patents to be licensed have not been litigated 

and found to be standard-essential. This is true, but provides no reason to modify the consent. 

Bosch elected to resolve the investigation in this area by agreeing to royalty-free licenses before 

it would have been necessary for the Commission to assess the essentiality and/or validity of any 

of the patents at issue. Accordingly, the proposed Consent Order does not address infringement 

or validity of the patents-at-issue. 

 Finally, some commenters expressed concern that documents and other information 

supporting the Commission’s basis for the proposed Consent Order have not been made public. 

The Commission is not at liberty to publicly divulge or discuss in great detail most of the 

 

6

 Third Party United States Federal Trade Commission’s Statement on the Public Interest filed on 

June 6, 2012 in In re Certain Wireless Communication Devices, Portable Music & Data 

Processing Devices, Computers and Components Thereof, Inv. No. 337-TA-745, available at 

www.ftc.gov/os/2012/06/1206ftcwirelesscom.pdf and in In re Certain Gaming and 

Entertainment\ Consoles, Related Software, and Components Thereof, Inv. No. 337-TA- 752, 

available at http://www.ftc.gov/os/2012/06/1206ftcgamingconsole.pdf, at 3-4. 
Federal Trade Commission Response To Commenters 

Page 4 

information it gathers during a non-public investigations, because the information is confidential 

and competitively sensitive. The Commission conducted its non-public review of the proposed 

transaction pursuant to its authority under Section 7 of the Clayton Act, 15 U.S.C § 18, and 

Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45. As is its typical process, during 

the course of its investigation, the Commission reviewed public and non-public information from

the merging parties and third parties to reach its conclusions. By statute, such information is not 

subject to public disclosure.7

One comment, however, suggested that our description of SAE’s rules regarding patent 

licensing was inaccurate. Because SAE’s rules are public, the Commission is at liberty to 

provide more detail on this point. The Commission refers interested readers to Rule 1.14.1 of the 

Governance Policy of SAE’s Technical Standards Board. This Rule expressly require members 

who disclose patents that may be essential to a given standard to commit to license those patents 

on a royalty free or FRAND basis.8

 

 

 After careful review of the comments, the FTC has determined that the public interest 

would best be served by issuing the Decision and Order in final form without modification. A 

copy of the final Decision and Order is enclosed for your information. Relevant materials also 

are available from the Commission’s website at http://www.ftc.gov. 

 It helps the Commission’s analysis to hear from a variety of sources in its work on 

antitrust and consumer protection issues, and we appreciate your interest in this matter. 

 By direction of the Commission, Commissioner Ohlhausen dissenting and Commissioner 

Wright not participating. 

 Donald S. Clark 

 Secretary 

 

 

7

 Section 21(f) of the FTC Act, 15 U.S.C. § 57b-2(f), provides that information which is obtained by the 

Commission pursuant to subpoena, or voluntarily in lieu of subpoena, in any investigation to determine whether any 

person may have violated any provision of the laws administered by the Commission, is exempt from disclosure 

under the Freedom of Information Act, 5 U.S.C. § 552. See also 16 C.F.R. § 4.10(a)(2). 

8

 SAE International, Technical Standards Board Governance Policy, § 1.14.1, available at 

http://www.sae.org/standardsdev/tsb/tsbpolicy.pdf.