More Bipartisan Support from Congress for Restoring 2019 SEP Policy Statement

“[Posey and Peters] explain that the 2021 Draft Policy Statement undermines innovation ‘by unnecessarily curtailing the available remedies for patent infringement.’”

Two bipartisan members of congress, Representative Scott Peters (D-CA) and Representative Bill Posey (R-FL), sent a letter yesterday to President Joe Biden urging him to maintain the 2019 version of the  Joint Department of Justice (DOJ)-U.S. Patent and Trademark Office (USPTO)-National Institute of Standards and Technology (NIST) Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary FRAND Commitments. A comment period on the latest iteration, which was issued in 2021, ended on February 4. The new version of the Statement came on the heels of President Joe Biden’s July 2021 Executive Order on Promoting Competition in the American Economy, which asked the three agencies to review the 2019 statement.

In their letter, Posey and Peters argue that the heads of the U.S. Patent and Trademark Office (USPTO) and National Institute for Standards and Technology (NIST), both of whom were only recently confirmed, should have a chance to weigh in on the draft. They also explain that the 2021 Draft Policy Statement undermines innovation “by unnecessarily curtailing the available remedies for patent infringement.” The remedies for SEPs should not be unique compared with remedies otherwise available under U.S. law in patent disputes, says the letter.

The 2021 Draft walks back the 2019 Statement language with its assertion that “As a general matter, consistent with judicially articulated considerations, monetary remedies will usually be adequate to fully compensate a SEP holder for infringement.” This essentially suggests that SEP holders should generally not be entitled to injunctions if they’ve made a FRAND Commitment, said Alden Abbott, Senior Research Fellow at the Mercatus Center and former General Counsel of the Federal Trade Commission (FTC), at the time of the 2021 Draft’s release. “The New Madison Approach indicates that there shouldn’t be any special rules for SEPs. It calls for even treatment,” he added.

The Congress members warn in their letter that the latest Draft’s approach could “cede our competitive advantage to foreign governments and businesses,” particularly China:

“For example, since 2015, China has outspent the United States by approximately $24 billion in wireless communications infrastructure, while China’s five-year economic plan calls for $400 billion in 5G-related investment. China has also made notable gains in artificial intelligence, filing more patents than any other country, and experts warn that China may outpace the United States in artificial intelligence in a matter of years.”

The letter also criticizes the “rushed process devoid of interagency cooperation,” since the NIST head, Laurie E. Locascio, and USPTO Director, Kathi Vidal, were only confirmed to their positions in early April.

“We should prioritize actions that will encourage innovation and equip America to lead amid fierce competition abroad,” or risk national security and U.S. leadership in innovation, the letter concludes.

Senators Thom Tillis (R-NC), Mazie Hirono (D-HI) and Chris Coons have also recommended leaving the 2019 Statement in place, along with a bipartisan group of former administration officials.

 

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