In this issue:
In our next two issues, compiled with Danny Sokol’s guidance, we’re diving into the murky waters of patents. We’re asking how to balance the need to protect competition with the desire to encourage innovation, and, in an obviously related question, how to compensate for others to use that innovation. Recent events have underscored the continuing turmoil in the field—the Ericsson and Qualcomm decisions; intensified discussion on royalties, including asking whether royalty stacking even exists; the Recent FTC IEEE letter; and others.
And do any conclusions stand out? For one, we couldn’t give all these issues sufficient attention in just one issue, so this will be part one of a two-part colloquium. But also, if you’re involved in antitrust today, this is a field you really need to understand. And reading these papers will move you a long way down that road.
Antitrust and Patent Issues, Part 1
Recent FTC and DOJ actions related to standard setting promote dubious enforcement theories and favor technology implementers over innovator patentees, to the detriment of dynamic competition and innovation. Alden F. Abbott (Heritage Foundation)
Carte Blanche for SSOs? The Antitrust Division’s Business Review Letter on the IEEE’s Patent Policy Update
The DOJ’s devaluing of concerns about harm to innovation incentives has serious implications that will affect the choices made by other SSOs, as well as enforcement policies of foreign competition authorities looking to U.S. antitrust law for guidance. Stuart M. Chemtob (Wilson, Sonsini)
Those debating what “reasonable” means in RAND have crafted intricate and complex arguments on both sides. Sean Gates (Morrison & Foerster)
Based on this evidence, it concludes that the choice of the royalty base affects the royalty size. Joseph Kattan, PC (Gibson, Dunn & Crutcher)
Has the possibility of royalty stacking manifested itself as a real-world problem? Richard J. Stark (Cravath, Swaine & Moore)
The CAFC formulation for determining the RAND value of standard-essential patents is different from the FTC formulation of the same. Dina Kallay (Ericsson)
Given that the Federal Circuit is often the last word on patent issues, the court’s Ericsson decision provides important guidance to lower courts on how to determine RAND royalty rates. Anne Layne-Farrar (CRA) & Koren W. Wong-Ervin (FTC)
The KFTC’s enforcement action against Qualcomm should create little surprise. Yoonhee Kim & Hui-Jin Yang