Posts Tagged: "SEPs"

As was recently reported by IPWatchdog (here and here), the U.S. Patent and Trademark Office (USPTO), the National Institute of Standard and Technology (NIST), and the U.S. Department of Justice, Antitrust Division (DOJ) issued a statement on June 8 withdrawing the December 19, 2019 Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments (2019 Policy Statement). A footnote to the statement further provides that “the agencies do not reinstate the January 8, 2013, Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments issued by the DOJ and the USPTO.” Curiously, this statement makes no mention of the 2021 Draft Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments (2021 Draft Policy Statement), which draft statement was criticized by a broad cross-section of industry participants for a variety of different reasons. Regardless, our question is simply this: why did the 2019 Policy Statement need to be withdrawn instead of simply not proceeding with the 2021 Draft Policy Statement or, alternatively, modifying those portions of the 2019 Policy Statement that the agencies did not agree with? By throwing the baby out with the bath water, patent owners are now left to guess where the agencies stand on such issues.

On June 8, the Biden Administration announced a detente on the issue of standard essential patents (SEPs) through coordinated statements made by the United States Patent and Trademark Office (USPTO), Department of Justice Antitrust Division, and National Institute of Standards and Technology (NIST). The casual reader, or reader who only quickly glanced at the headlines, might be mistaken into believing the Biden Administration had declared war on SEP owners due to the Administration rescinding the 2019 Joint Policy Statement between the USPTO, DOJ and NIST that was biased in favor of the possibility of SEPs being like any other patent, with remedies for infringement possibly including injunctive relief. Those familiar with Administration’s efforts on SEPs will recall that a 2021 draft policy statement had been published, which swung heavily against patent owners and resurrected the debunked myth that patent owners engage in hold-up activities.

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.

On May 17, 2022, the Federal Trade Commission (FTC) submitted to Lisa Barton, Secretary of the International Trade Commission (ITC), a statement they believed was relevant to the public interest considerations before the Commission in a matter involving certain UMTS and LTE cellular communication modules (337-TA-1240). The ITC in many cases will invite statements on the Public Interest, and the FTC is often invited to make a submission. It should be noted, however,  “Public Interest” in the ITC is a matter of statute, and there are four public interest factors which are statutory. Any statement in the Public Interest must address one or more of those factors. Other matters not within the statute are not public interest factors.

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.

As we have previously explained, many implementers wish to require patent owners to establish (1) the need for licenses, and (2) that any terms offered are in fact fair, reasonable and non-discriminatory (FRAND), but without having to make any commitment to accepting FRAND licenses, and without ever losing entitlement to the same. With respect to the latter, recall, for example, Apple’s position it its case with PanOptis, namely that PanOptis had “no legal right under U.S. law to impose on Apple an obligation to negotiate a license to Plaintiffs’ portfolios of declared-essential patents or forfeit any defenses for failing to do so” (Apple Inc.’s Motion to Dismiss Count VIII for Lack of Subject Matter Jurisdiction, Optis Wireless Technology, LLC, Optis Cellular Technology, LLC, Unwired Planet, LLC, Unwired Planet International Limited, and PanOptis Patent Management, LLC v. Apple Inc., Civil Action No. 2:19-cv-00066-JRG (E.D. Texas, June 22, 2020)) [hereinafter Optis v. Apple]. Basically, such implementers want the option of capping their exposure at FRAND rates if ever found to infringe. We refer to this as an implementer wanting to have its FRAND cake and eat it too.

“For 200 years, the world was getting along just fine without a policy statement on SEPs [standard essential patents],” said Andrei Iancu earlier this week at Patent Litigation Masters™ 2022, discussing Biden Administration attempts to revisit the 2019 SEP policy agreement among the U.S. Patent and Trademark Office (USPTO), National Institute of Standards and Technology (NIST) and Department of Justice (DOJ). “Standard essential patents are patents too… the regular rule of law should apply.” Iancu, former USPTO Director, and current partner at Irell & Manella, went on to say that the real goal of those constantly chipping away at patent rights is simple: “Weaken patents so that the big entities can have freer reign to get bigger, to infringe patents in a less encumbered way.”

On May 9, a comment signed by a coalition of 25 law professors, economists and former U.S. government officials, and co-written by Adam Mossoff, Law Professor at George Mason University’s Antonin Scalia Law School, and Jonathan Barnett, the Torrey H. Webb Professor of Law at the University of Southern California’s Gould School of Law, was submitted to the European Commission as a response to the EU governing body’s call for evidence on standard-essential patents. Like another recent response to the EU Commission by a group of scholars with the International Center for Law & Economics (ICLE), the Mossoff-Barnett comment attempts to dispel several misconceptions about the impact that SEPs have on the commercialization of new technologies, especially major communications technologies like 4G/LTE and WiFi that have been widely commercialized to the benefit of the vast majority of global consumers, thanks in large part to the patent rights that help to structure commercialization efforts.

Four scholars with the International Center for Law & Economics (ICLE) have sent comments to the European Commission urging against any changes to the EU’s legal framework for licensing of standard-essential patents (SEPs) that would limit SEP holders’ ability to seek injunctions against alleged infringers. The ICLE scholars write: “It is simply not helpful for a regulatory body to impose a particular vision of licensing negotiations if the goal is more innovation and greater ultimate returns to consumers.” The comments come in response to the Commission’s February 2022 Call for evidence, which explained that “some users have found that the system for licensing SEPs is not transparent, predictable or efficient. This initiative seeks to create a fair and balanced licensing framework and may combine legislative and non-legislative action.” The feedback period ended May 9 and asked stakeholders to submit their views on: “(i) transparency; (ii) the concept of licensing on FRAND terms and conditions, including the level of licensing; and (iii) effective enforcement.”

The DOJ should refrain from taking any steps that would make it more difficult for Americans to innovate amid fierce competition abroad. Further challenges to American innovation will jeopardize national security by disadvantaging and ceding U.S. technological leadership to China and other foreign competitors actively looking to displace the United States as the world leader in critical technologies.

The U.S. Court of Appeals for the Fifth Circuit on Monday vacated and remanded a district court decision that had dismissed Continental Automotive Systems, Inc.’s suit against several standard-essential patent holders and their licensing agent, claiming violations of federal antitrust law and state law. The U.S. District Court for the Northern District of Texas dismissed with prejudice Continental’s Sherman Act claims for lack of antitrust standing and, alternatively, for failure to plausibly plead certain elements. Continental appealed, but the Fifth Circuit said Continental’s claims should have been dismissed for lack of Article III standing because it had not proven that the SEP holders had “denied Continental property to which it was entitled and that Continental thereby suffered a cognizable injury in fact.”

Last summer, I lamented how the Department of Justice – Antitrust Division (DOJ), without Senate confirmed leadership, was hastily pushing through policies that augmented the already-enormous power of Big Tech and benefitted China’s interests. Similarly, I uncovered how the App Association, a Big Tech-funded advocacy organization masquerading as a group of small app developers, was able to trick the Federal Trade Commission (FTC) into inviting it to speak at its July 2021 Commission meeting alongside legitimate small businesses. This is the same association that supported Apple in its litigation against (real) app developers, issued a June 2021 press release against the House bills aimed at regulating Big Tech, and misses no opportunity to support Big Tech interests.

An anti-suit injunction is an interim order issued by a court in one jurisdiction that prohibits a litigant from initiating or continuing parallel litigation in another jurisdiction. The practice of the anti-suit injunction is traced back to fifteenth century England, where royal courts issued writs of prohibition to stay parallel proceedings in the ecclesiastical courts or common law courts. Initially, the use of anti-suit injunctions was limited in England. By the nineteenth century, however, their use expanded to prevent litigation in other British colonies and eventually foreign countries.

For a long time, the courts in England have been a forum of choice for the resolution of disputes between international parties, with the promise of an experienced judiciary and a cost-efficient approach to discovery and expert testimony. The English Patents Court is no exception, with multi-jurisdictional patent disputes often featuring an English action. In addition to the availability of specialist judges and legal teams, the ability to obtain some discovery when needed (but without the extensive, onerous and costly approach to discovery in the United States), to cross-examine experts at trial and to obtain declaratory relief make the UK an attractive jurisdiction. The thorough and reasoned judgments that can prove useful in parallel litigation across Europe and the general availability of injunctions are also key drivers for patentees.