INSIGHT: New Statement on Standard-Essential Patents Relies on Omissions, Strawmen, Generalities
Bloomberg Law Insight, 2020
4 Pages Posted: 8 Apr 2020
Date Written: January 13, 2020
In his time as head of the Department of Justice Antitrust Division, Makan Delrahim has staked out an aggressive position abandoning the previous bipartisan consensus on standards and “patent holdup,” by which owners of patents needed to use the standards have the power to hold up an industry by demanding excessive royalties or blocking products from the market.
In December 2018, Delrahim unceremoniously withdrew from the 2013 joint statement with the Patent Office on standard essential patents. In December 2019, the agencies (now joined by the National Institute of Standards and Technology) promulgated a new statement. Given that the 2013 statement already offered a reasonable compromise, how could the 2019 statement be even more reasonable? That would be hard to do. As a result, the 2019 statement relies on omissions, straw-men, and generalities.
First is omissions. The statement neglects the benefits of reasonable-licensing rules and references patent holdup just once, in a footnote mentioning not just holdup but also licensee-based holdout. And even though the statement hypothesizes licensees violating antitrust law, it neglects antitrust’s important role in policing anti-competitive behavior by patentees.
Second, the statement sets up, and knocks down, a series of straw-men directed at antitrust law, the 2013 statement, and courts’ activity.
Third, the statement is full of anodyne assertions that don’t add much to the existing analysis, with the generalities themselves often not achievable given the one-sided approach taken throughout the statement.
In short, the statement’s generalities do not meaningfully assist courts and other policymakers. And a series of omissions and straw-men make the statement less balanced and reasonable than the document it replaced.
Keywords: Antitrust, Patent, Holdup, Standards, DOJ, PTO, NIST
JEL Classification: K21, L41, O31, O34
Suggested Citation: Suggested Citation