“I stand behind any measure that will enable innovation that will drive sustainable, long-term growth in the U.S. economy.” – USPTO Director Kathi Vidal
The U.S. Department of Justice (DOJ), the U.S. Patent and Trademark Office (USPTO) and the National Institute of Standards and Technology (NIST) have announced that they are officially withdrawing the 2019 Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments.
However, the withdrawal does not reinstate the 2013 Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments, which had been harshly criticized by many in the IP community. It also seems to scrap the Draft 2021 Statement, which also drew the ire of the IP world.
The DOJ – Antitrust Division issued a request for public comment on a new iteration of the Policy Statement in December 2021. The announcement came in response to 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 December 2019, the three agencies withdrew from the 2013 iteration of the Statement and issued the revised 2019 one. The new Statement explained that “[c]onsistent with the prevailing law… injunctive relief, reasonable royalties, lost profits, enhanced damages for willful infringement, and exclusion orders issued by the U.S. International Trade Commission… are equally available in patent litigation involving standards-essential patents.”
The 2013 Statement had advised that injunctions or International Trade Commission (ITC) exclusion orders may not be appropriate with respect to standard essential patents (SEPs) because such orders may be “inconsistent with the public interest.”
Today’s announcement explained that the withdrawal of the 2019 Statement “best serves the interests of innovation and competition” and comes after review of the wide range of comments submitted to the DOJ’s December request “and a collaborative deliberation on how best to proceed.”
As noted in the Withdrawal of the 2019 Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments, “[a]fter considering potential revisions to that statement, the Agencies have concluded that withdrawal best serves the interests of innovation and competition.”
“The withdrawal of the 2019 Statement will strengthen the ability of U.S. companies to engage and influence international standards that are essential to our nation’s technology leadership and that will enable the global technology markets of today and tomorrow,” said Under Secretary of Commerce for Standards and Technology and NIST Director Laurie E. Locascio, according to a USPTO press release.
USPTO Director Kathi Vidal said that we need “greater U.S. engagement in global standards-setting organizations from our large multinational companies, as well as from small- to medium-sized businesses and start-ups. I stand behind any measure that will enable innovation that will drive sustainable, long-term growth in the U.S. economy.”
According to today’s announcement, the DOJ will review conduct by SEP holders or standards implementers “on a case-by-case basis to determine if either party is engaging in practices that result in the anticompetitive use of market power or other abusive processes that harm competition,” and that the three agencies will continue to cooperate.
“The Antitrust Division will carefully scrutinize opportunistic conduct by any market player that threatens to stifle competition in violation of the law, with a particular focus on abusive practices that disproportionately affect small and medium sized businesses or highly concentrated markets,” said Assistant Attorney General Jonathan Kanter. “I am hopeful our case-by-case approach will encourage good-faith efforts to reach F/RAND licenses and create consistency for antitrust enforcement policy so that competition may flourish in this important sector of the U.S. economy.”
Brian Pomper of the Innovation Alliance said in a statement Wednesday night that they applaud the decision to withdraw all policy statements on SEPs, “including the Administration’s flawed draft policy statement released in 2021.” Pomper continued:
This decision to allow courts to determine on a case-by-case basis the proper relief when a SEP has been infringed gets the government out of the business of dictating policy on SEP enforcement and treating SEPs differently from any other patent. Importantly, it makes clear that SEP holders have the right to obtain injunctive relief like any other patent holder when a court determines that is the proper remedy. This is critical to ensuring that our patent system continues to incentivize technological breakthroughs, keeping America at the forefront of global innovation.
This article was updated at 9:00PM on June 8.