Standard-Essential Patents and Antitrust: Of Fighting Ships and Frankenstein Monsters

Sean P. Gates, Oct 15, 2013

Standard-essential patents (“SEPs”) have been at the heart of a debate about the reach of U.S. antitrust law. In recent years, the focus has been on whether breach of a good faith commitment to license on reasonable and non-discriminatory (“RAND”) terms can be the basis for a monopolization claim. The question is whether, in the absence of any fraud or deception at the time of the RAND commitment, an antitrust violation occurs when a holder of a RAND-encumbered patent either refuses to grant a license on RAND terms or seeks injunctive relief.

In consent decrees, the Federal Trade Commission (“FTC”) has stated that such conduct may violate Section 5 of the FTC Act as an unfair method of competition. But no court has ruled on such a theory.And the Commission has been careful to distinguish between Section 5, which only the FTC can enforce, and Section 2 of the Sherman Act, which the Department of Justice and private litigants may enforce.

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