innovatewebbanner2

Innovate Magazine

INNOVATE is the online magazine by and for AIPLA members from IP law students all the way through retired practitioners. Designed as an online publication, INNOVATE features magazine-like articles of 500-1,500 words in length on a wide variety of topics in IP law.

Publishing an article to INNOVATE is a great way for AIPLA members to build their brand by increasing recognition among peers and setting themselves apart as thought leaders in the IP industry.

Any current AIPLA member in good standing may submit an article for consideration in INNOVATE throughout the year. IP law students are especially encouraged to submit articles for publication.

Articles submitted to innovate@aipla.org are reviewed by an ad-hoc sub-committee of volunteers from AIPLA's Special Committee on Publications, the Fellows Committee, and other AIPLA peers. The review process ensures submitted articles follow the Guidelines for Article Submission. Approved articles are published quarterly.

Don’t miss your chance to be published with AIPLA’s INNOVATE! Email your article submission to innovate@aipla.org to be considered for the next edition.


 

 

 

Can We Get An Administration Standard On Tech Standards?

By Robert Stoll

Standard Development Organizations facilitate the development of complex technology standards that, in turn, promote interoperability, efficiency and innovation for consumer products. 5G, a well-known telecommunication standard, will change the world by stimulating diverse innovations and new consumer products that rely on cutting-edge technology contributed to this open standard.

The common requirements for an SDO are that technology contributors (typically those who invest heavily in development of the standard) indicate their future licensing intentions for any patents they own or may come to own that might read on the standard (often known as standard- essential patents). Such intentions typically reflect an assurance to provide access to SEPs on (fair), reasonable and nondiscriminatory terms.

Antitrust enforcers recognize the benefits to the consumer of having a common standard in that more competition and cheaper products result thanks to lower barriers of market entry and enhanced efficiency. But they also recognize the potential market power that may be created by incorporation of a patents into the standard.

FRAND assurances have long been recognized as mitigating potential antitrust concerns because they provide the potential users access to the standard (including all original developers) on FRAND terms, while ensuring adequate compensation to contributors to the standard.

In the past, especially between 2012-2015, the U.S. Department of Justice Antitrust Division had expressed concerns about potential for holdup by the owners of SEPs where the owner tries to get more than the F/RAND value of the SEP after it has been incorporated into the standard. Another potential problem also recognized by antitrust enforcers is holdout, where a potential infringer refuses to take a license or mandates a sub-F/RAND rate.

In 2013, the leadership of the DOJ and the U.S. Patent and Trademark Office jointly issued a Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments. The statement was targeted at the U.S. International Trade Commission. It was premised on the assumption that an injunction or exclusionary order to enforce an SEP “may be inconsistent with the public interest” in ITC cases as the patentee had supposedly agreed to license at F/RAND rates. The other U.S. antitrust agency — the Federal Trade Commission — did not join the 2013 policy statement.

On Dec. 7, 2018, Assistant Attorney General Makan Delrahim, who is the first-ever AAG who is also a patent attorney, announced the withdrawal of the DOJ Antitrust Division from the 2013 policy statement.

The joint statement was widely viewed as the statement of administrative policy, and the withdrawal of the Antitrust Division led the patent and antitrust communities to believe that the USPTO would have followed the DOJ’s decision to withdraw, or that a new policy was imminent. But after nearly a year, the USPTO has not disavowed the 2013 policy statement, and no new statement has been forthcoming.

The Antitrust Division changed its position with the change of administration because the new AAG believed that the 2013 policy statement skewed too heavily in favor of technology users (sometimes called implementers), as opposed to patent holders.

In addition, there is no empirical evidence that holdup — the motivation for the 2013 policy statement in the first place — represents a systemic problem,[1] while on the other hand there are plenty of examples of holdout. Therefore, the AAG stated that the Antitrust Division would focus more on holdout as opposed to holdup.

He further argued that antitrust law was not necessary to resolve the issues as common law provided adequate remedies. Delrahim asserted that the DOJ would not use antitrust laws to pursue patent holders who seek injunctions against infringers of SEPs. Last month, the DOJ submitted a statement of interest in the Lenovo Inc. v. IPCom GmbH & Co. case, explaining why the seeking of an injunction against infringement of SEPs or of purportedly supra-F/RAND rates is not a violation of U.S. antitrust laws.

We need standard developers to continue costly engagement in standardization, innovators to continue to innovate, and implementers to keep bringing interoperable products to the market. So we need a F/RAND system that works for all stakeholders. Innovators are often licensors of their own SEPs and also licensees for SEPs owned by others. And implementers are the licensees for the SEP, but many have a licensing regime for inventions related to their new products that others want to use in their own products.

We have lived for six years under the 2013 policy statement and now have data indicating that patent holdout is a significant problem. Furthermore, the 2013 policy statement has been often misread in foreign jurisdictions and used to justify antitrust overreach. It has also been misread broadly beyond its original ITC scope.

In 2014, the U.S. Court of Appeals for the Federal Circuit in Apple Inc. v. Motorola Inc. found that the eBay test worked for SEPs and that, therefore, there is no reason to create a separate rule or analytical framework for addressing injunctions against their infringement. While a license is ideally the norm for SEPs, injunctive relief is a necessary tool against implementers who are unwilling or unable to pay F/RAND rates.

Too frequently the licensing process has been difficult for innovative companies that attempt to license F/RAND-assured patents as implementers recognized that under the 2013 policy statement, they could hold out, and the only remedy at the end of any years-long process would still be a license at F/RAND rates. The ITC, recognizing the problem, has recently granted an exclusion order on an SEP.

As leaders of the Senate judiciary intellectual property subcommittee have also recognized, it is time for the director of the USPTO to join with the AAG to reevaluate the F/RAND injunction policy regime, reviewing all of the information that we now have to develop a new, balanced position that is fairer to everyone. We need a fair unified administration position to provide certainty to the regime. We also need to assure that the system stimulates economic growth and job creation in these important emerging technologies.




This article was originally published December 6, 2019 through Law360 and can be viewed here. 

[1] “[N]o empirical study has demonstrated that patent owners’ requests for injunctive relief after findings of defendants’ infringement of their property rights have resulted systematically either in consumer harm or in slowing down the pace of technological innovation”; CPIP Scholars Join Comment Letter to FTC Supporting Evidence-Based Approach to IP Policymaking, January 7, 2019; available here: https://cpip.gmu.edu/2019/01/07/cpip-scholars-join-comment-letter-to-ftc-supporting-evidence-based-approach-to-ip-policymaking/


Robert L. Stoll is a partner at Drinker Biddle & Reath LLP. He co-chairs the firm’s intellectual property practice group and previously served as commissioner for patents at the U.S. Patent and Trademark Office.

 

 

Please login to see the content.
Register now

Patent Seekers

CPI