Why Antitrust Should Defer to the Intellectual Property Rules of Standard-Setting Organizations: A Commentary on Teece & Sherry

Abstract:     
This essay addresses the intellectual property rules of standard setting organizations (SSOs). Because owners may refuse to license intellectual property (IP) that is essential to the implementation of standards, many SSOs have adopted search, disclosure, and licensing rules that restrict their members' use of IP.

In the essay, I agree with the limited antitrust scrutiny of SSOs' IP rules envisioned by David Teece and Edward Sherry. But I arrive at that result not from a one-size-fits-all characterization of antitrust or an emphasis on the delay resulting from applying the discipline. Rather, I focus on the rationales underlying antitrust jurisprudence.

In particular, I emphasize the lack of significant anticompetitive effects from the IP rules of SSOs: the organizations do not resemble the collusive cartel-type arrangements that historically have drawn antitrust scrutiny, and membership in the SSO is typically not necessary to practice the standard or to exclude members from access to essential patented inputs. This lack of significant anticompetitive effects is accompanied by powerful procompetitive justifications for the rules, which reduce the likelihood that patentees will hold up the implementation of the standard.

Number of Pages in PDF File: 20

Keywords: antitrust, intellectual property, standards, standard-setting organizations

JEL Classification: K21,L41,O31,O34

Accepted Paper Series