Published: 4/16/15
Publication: The National Law Review
On April 14 in Washington, DC, Global Competition Review hosted its Second Annual IP & Antitrust USA conference. The conference covered various hot topics being closely followed by IP antitrust practitioners, including (1) the evolution of the US antitrust agencies’ approach to standards and standard essential patent (“SEP”) issues; (2) current challenges facing SEP holders who commit to license SEPs on fair, reasonable, and nondiscriminatory terms (“FRAND”); (3) the impact of US patent policy on innovation and global competitiveness; and (4) the proper legal and economic analysis to apply in IP antitrust cases. However, the most hotly debated issue at the conference concerned the recent guidance issued by the Department of Justice (the “DOJ”) to the Institute of Electrical and Electronics Engineers (“IEEE”) in a February 2, 2015, business review letter stating the DOJ did not intend to challenge proposed changes to IEEE Standards Association’s patent policy aimed at encouraging licensing of SEPs on reasonable and nondiscriminatory terms (“RAND”).
IEEE’s revised patent policy included four provisions: (1) companies agreeing to the IEEE RAND commitment cannot seek or enforce a Prohibitive Order to exclude a potential competitor from the market; (2) “reasonable rate” must not include the value accorded to the fact that the patent is included in the IEEE standard (i.e., basing the royalty rate on the smallest saleable unit by focusing on the intrinsic value of the technology); (3) patent holders who have agreed to the IEEE RAND commitment cannot refuse to license its patents for use in IEEE standard products at all levels of the supply chain; and (4) a licensor may require a grant back.