Public Comments on New Policy Statement Concerning Good-Faith Licensing Negotiations

by | May 10, 2022 | Article

The Department of Justice (“DOJ”) Antitrust Division, United States Patent and Trademark Office, and National Institutes of Standard and Technology (the “Agencies”) published a Draft Revised Policy Statement on remedies for the infringement of Standards-Essential Patents (“SEP”) that are subject to Fair, Reasonable, and Non-Discriminatory (“FRAND”) licensing for public comment. The public comment period, allowing stakeholders an opportunity to give their input has now closed. According to the DOJ, the Draft Policy is aimed to promote good-faith licensing negotiations and addresses the availability of remedies to patent owners that license their SEPs on FRAND terms. 

What are SEPs and FRAND? 

An SEP, or Standards-Essential Patent is “a patent claiming technology that is essential to an industry standard’s use.”1 In other words, they are patents that protect an industry’s core technology or the baseline standard set to further invention and innovation. SEPs are initially a typical patent and are formally declared a “standard” by certain Standard-Setting Organizations (“SSO”).2 In the standard-setting process, owners of the patent technology are sometimes involved and agree to license the technology on FRAND terms. 3 Common examples of SEPs are patents for Wi-Fi, LTE and USB, all technology which are widely used and integral to daily life. FRAND request the owners or licensors of SEP patents that are subject to FRAND negotiate licensing terms in a Fair, Reasonable, and Non-Discriminatory manner, allowing better access to these key patents. FRAND licensing requirements support standardization of license terms, promoting scalability of technology, and lowering prices for consumers.4 

The Verdict is In – Public Comments on the New Policy Statement 

A total of 1,030 comments were received on the Draft Policy, and 167 of those are posted and available for viewing on the docket. The American Intellectual Property Law Association (“AIPLA”) is among the many organizations who submitted comments on the Draft Policy Statement. The AIPLA suggests that while the draft statement is in line with the core objectives of prior statements, the new added commentary conflicts with current law regarding injunctions for commitment SEPs, and requests that the prior statement stay in place. There seems to be a consensus with the AIPLA’s argument, as the Information Technology & Innovation Foundation (“ITIF”) also noted the Draft Statement may not strengthen Intellectual Property rights by overlooking the “benefits and availability of injunctive relief.”  

We know this will not be the end of discussions involving SEPs subject to FRAND and we will continue monitoring the Department of Justice for updates on the potential implementation of the Draft Policy Statement and update with any key changes in the future.