Comment of the Global Antitrust Institute, Antonin Scalia Law School, George Mason University, on the U.S. Department of Justice, U.S. Patent and Trademark Office, and National Institute of Standards Draft Policy Statement on Licensing Negotiations and Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments

Abstract

We submit this comment in response to the request of the U.S. Department of Justice, U.S. Patent and Trademark Office, and National Institute of Standards and Technology to comment on the proposed Draft Policy Statement (DPS) on Licensing Negotiations and Remedies for Standards-Essential Patents Subject to F/RAND Commitments (December 6, 2021). The DPS proposes an entirely new and apparently self-defeating meaning of the term “good-faith negotiations,” one which would tend to undermine the functioning of good-faith negotiations as traditionally understood for the licensing of F/RAND-encumbered SEPs. As we discuss, the DPS appears to propose an antitrust policy that would fundamentally distort negotiations over F/RAND-encumbered SEP licensing in ways that would tend to chill incentives to innovate and lessen dynamic competition to the detriment of both consumers of final goods and of growth in the broader economy.

Keywords: antitrust, standard essential patents (SEPs), standard setting organizations (SSOs), standard development organizations (SDOs), FRAND, patent holdup & holdout, patent injunctions, USPTO, U.S. Patent and Trademark Office, National Institute of Standards and Technology, F/RAND, DOJ

JEL Classification: K2, K20