77 former government enforcement officials and university professors wrote to AAG Makan Delrahim to express concern with some of his recent speeches. Makan Delrahim’s newly-announced approach to SEPs is not consistent with the broad bipartisan legal and economic consensus that has existed for over a decade regarding standard setting.
The letter raises the following arguments:
- The anticompetitive harms from patent holdup have been consistently acknowledged by officials in Republican and Democratic administrations, courts and standard setting organizations.
- The risks faced by innovators are consistent with the “speculative investments” always made by technology and product developers; in contrast, implementers are vulnerable to paying supra-competitive royalties based on the entire value of the product, not on the value of the patented technology.
- Patentees that obtain or maintain monopoly power as a result of breaching a FRAND commitment present a standard monopolization case.
- While patents are important for innovation and injunctive relief often is appropriate, it cannot be agreed that patents provide an unqualified “property right to exclude” that is accompanied by an injunction and a conclusion that “unilateral patent hold-up” is “per se legal.”
- The position that patent infringement necessarily results in an injunction is, for good reason, no longer the law. Because there could be thousands of patents in a product today, it is not appropriate uniformly to apply standards from the 18th century.
- Pointing to exclusive rights granted to patentees as a type of natural property right ignores the uncontroversial utilitarian framework for the patent grant. It tells only half the story to focus on the incentives relevant to the initial invention while ignoring follow-on innovation, which is just as important and may be undermined significantly when patent owners abuse their FRAND obligations.
- The holder of a standard essential patent voluntarily chooses to license on a FRAND basis.