DoJ Intellectual Property Speech

On Sep. 12, DoJ Delrahim remarks on intellectual property, antitrust.

  • Asst. AG Makan Delrahim remarks at LeadershIP virtual series on innovation policies.
  • Spoke on new approaches to role of standards, intellectual property (IP), and antitrust.
  • New Madison Approach
  • Follows hold-up problem in licensing standards, FRAND commitment, see #61134.
  • Supposed problem is that SEP holders might renege on FRAND obligations after their patents are incorporated into standard, demand non-FRAND terms from implementers.
  • Radical theory that patent holder failing FRAND commitment can be sued for antitrust.
  • Outlined the new Madison approach with four core premises countering misconception.
  • Posited that hold-up is actually not an antitrust rather contract/fraud injury, if proven.
  • SDOs not be vehicles for concerted action to favor implementers over patent holders.
  • Fundamental feature of patent rights is right to exclude, courts be hesitant to limit that right by disfavoring injunctive remedies, absent any specific congressional direction.
  • Finally, antitrust laws to treat unilateral decision not to license patent as per se legal.
  • Competitive process takes place in negotiations between implementers, patent holder.
  • Court Challenges
  • Exampled recent cases filed in 2020, e.g. Continental v. Avanci, Lenovo v. Interdigital.
  • Amicus brief filed jointly with US Patent & Trademark Office in case HTC v. Ericsson.
  • Filed statement of interest in Intel v. Fortress based on problematic understanding of antitrust law without highlighting absence of harms to competition in the complaint.
  • Filings reflect how DoJ advanced balanced pro-innovation approach, useful for courts.
  • Opined that recent decision in FTC v. Qualcomm strong, important pronouncement of correct approach to antitrust in standard-setting context despite highly complex issue.
  • Updated IEEE Letter
  • Updated legal, policy landscape with supplement to 2015 IEEE business review letter.
  • Reiterates that SDO policies, procedures must balance the interests of SEP holders and implementers, consider incentives for hold-up, hold-out behavior, afford flexibilities.
  • Goal is to help end misuses of 2015 Letter, establish more accurate antitrust policies.
  • Future Challenges
  • New Madison approach has had successes but many challenges remain on the horizon.
  • Potential concern is recently revealed China Standards 2035 initiative to be released.
  • As Made in China 2025 before it, aims to promote Chinese interests, forgo selection of superior technologies in development of standards to govern consumer experiences.
  • Critics have noted that this approach has led to market access barriers, other harms.
  • Approach may ignore obligation China has to evolve/conform to international standard.
  • Expected to accelerate China efforts to establish elf as key decision-maker, influencer.
  • Likely to include efforts to exert greater control over both processes and outcomes.
  • Can be susceptible to capture by specialized interests at the expense of consumers.
  • Negative effects of biased processes will be investigated, bring an enforcement action. DoJ encouraged American National Standards Institute to bolster its commitment to globally accepted principles for development, transparency, openness, and impartiality.

Regulators DoJ
Entity Types Bank; Corp
Reference Sp, PR 20-901, PR, 9/12/2020
Functions Audit; Compliance; C-Suite; Financial; Legal; Technology
Countries United States of America
Products Banking; Corporate
Regions Am
Rule Type Guidance
Rule Date 9/12/2020
Effective Date 9/12/2020
Rule Id 85983
Linked to N/A
Reg. Last Update 9/12/2020
Report Section US Reform

Last substantive update on 09/13/2020