Tech standards group’s policy chills innovation, warns DoJ antitrust chief
A business review letter, which gave a group that sets technical standards the go ahead to change its policy, is being frequently misapplied and may be chilling innovation, according to the US Department of Justice (DoJ).
In an update issued yesterday, September 10, the department’s antitrust division claimed that its 2015 letter—which was sent to the Institute of Electrical and Electronics Engineers—was outdated and being incorrectly cited as an endorsement of the group’s policy.
Under the DoJ’s business review procedure, organisations can submit proposed conduct to the antitrust division and receive a statement as to the division’s current antitrust enforcement intentions based on the information provided.
The 2015 letter, which was provided by the department under the Obama-administration, said that the DoJ wouldn’t take issue with IEEE’s proposed policy changes, which included limiting the scope of available royalties.
The antitrust division said it was concerned that the letter had been “repeatedly and widely misconstrued and misapplied” which, in turn, could undermine the value of the business review process to the business and legal communities.
“Of greatest concern, IEEE and others have represented that the 2015 letter is an endorsement of the policy by the department, which is incorrect,” said the DoJ.
According to a supplemental letter, released yesterday, September 10, the misinterpretation appears to extend worldwide, and may have influenced foreign enforcement activity.
“Over the last several years, some foreign competition authorities have misapplied the 2015 letter in support of enforcement actions against essential patent holders that have no basis under US law, raising the prospect that the business review process could be subject to intentional manipulation abroad,” said the letter.
It cited the example of South Korea’s competition agency claiming that the DoJ expressed support for IEEE's injunctive relief provisions in connection with a liability decision penalising an essential patent owner in 2017 in a case involving Qualcomm.
Additionally, aspects of the 2015 letter had become outdated based on recent jurisprudential and policy developments, according to the DoJ.
The supplemental letter is meant to align the outdated analysis with current US law and policy, which has evolved in important ways over the last five years in relation to the licensing of standard essential patents, and the governance of standards development organisations, according to the DoJ.
Assistant attorney general Makan Delrahim said: “The 2015 IEEE letter ... has proven outdated and we fear that reliance on its analysis, both in the US and abroad, could actually harm competition and chill innovation. The division concluded this supplement is necessary to provide increased clarity, given recent developments and potential misinterpretations of the division’s enforcement views.”
Yesterday’s letter concluded by encouraging IEEE to consider whether changes are needed to promote “full participation, competition, and innovation” in IEEE's standard setting activities.
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