Was the Update of the 2015 Business Review Letter to the IEEE Justified?

Abstract

In September 2020, the Antitrust Division of the U.S. Department of Justice (DOJ) supplemented and updated a Business Review Letter (BRL) that it had issued to the Institute of Electrical and Electronics Engineers Standards Association (IEEE-SA) in 2015, upon a much-debated change made by IEEE-SA to its intellectual property rights (IPRs) policy. The DOJ took this extraordinary step by noting that its BRL had been mischaracterized both domestically and internationally. In this paper, we review the evidence and find empirical support for DOJ’s concerns. The BRL’s only purpose was to state that the DOJ had no intention of bringing an antitrust enforcement action against the IEEE after reviewing the process followed by the organization during its IPR policy change. However, some industry groups (and even some public agencies) cited the 2015 BRL to support a variety of propositions for broader principles around the licensing of standard-essential patents (SEPs). In its update, the DOJ correctly noted that such misapplications of the 2015 BRL are wrong and should stop. The DOJ also correctly observed that some of the positions expressed in the BRL have become out of step with the most recent law and policy related to the licensing of SEPs. Finally, we find empirical evidence supporting the DOJ’s concerns that the predicted benefits of the IEEE-SA’s 2015 IPR policy revisions have not materialized. If anything, evidence suggests that they had the opposite effect.

Keywords: Antitrust, business review letter, standardization

JEL Classification: K21, K4, O34