SEP injunctions do not breach competition law, clarify US officials
US officials have said that standard-essential patent (SEP) owners who seek injunctions to stop the sale of infringing products will no longer be pursued under competition laws.
In a joint statement issued yesterday, December 19, the US Department of Justice, Patent and Trademark Office and National Institute of Standards and Technology said the infringement of SEPs should be treated no differently than a regular patent dispute.
The update diverts from the agencies’ 2013 guidance which said it could be potentially anti-competitive for SEP owners to seek injunctions to blocking the sale of products which depend on their patents.
The latest statement from the federal agencies said that remedies available in normal patent litigation, such as injunctive relief, lost profits, and enhanced damages, are equally available in SEP infringement cases.
According to the statement, courts should continue to consider all relevant facts, including the conduct of the parties when deciding whether a blocking order is necessary.
The courts are “more than capable of considering these factual issues” when deciding which remedies to award remedies for infringement, the statement added.
Assistant attorney general Makan Delrahim said: “Our patent system is what has made the American economy the innovation capital of the world, and we should not misapply the antitrust laws to diminish the incentive to innovate.”
The statement marks a shift from the position adopted by the same federal agencies in a 2013 policy statement.
Authorities had previously argued that, when a standard is widely implemented by industry, it may be prohibitively difficult and expensive to switch to a different technology.
“As a result, the owner of that patented technology may gain market power and potentially take advantage of it by engaging in patent hold-up,” the 2013 statement said.
Patent hold-up, it explained, “entails asserting the patent to exclude a competitor from a market or obtain a higher price for its use than would have been possible before the standard was set, when alternative technologies could have been chosen.
Morgan Reed, president of software developer group The App Association, said he was disappointed by the new policy, Reuters reported.
According to Reed, it does “not go far enough” in protecting small businesses from abusive licensing practices.
The new US position comes just days after it emerged that technology companies and carmakers had written to the European Commission, raising their concerns about access to SEPs in the EU.
A letter to the commission, signed by 27 companies including Apple, Cisco, Daimler, BMW and Lenovo, said it was increasingly difficult to access technology essential to self-driving cars and other connected devices on fair, reasonable, and non-discriminatory (FRAND) terms.
“The practice of some SEP owners to grant licences only to certain companies...prevents companies across the internet of things and related innovative technology industries from planning investments in R&D,” the letter, seen by The Financial Times, said.
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