ITU Patent Roundtable
Mark Seidman*
Federal Trade Commission
October 10, 2012
* The views expressed in these slides and in my oral
presentation are my own and do not necessarily
reflect the views of the Federal Trade Commission or
any individual Commissioner.
Introduction
• Federal Trade Commission background
– Share antitrust jurisdiction with Dept. of Justice
– Section 5 of the FTC Act
• Topics to Cover
– FTC’s Interest in Standard Setting
– Concerns about Patent Hold-Up
– Standard Essential Patents and Injunctions
2
The FTC and Standard Setting
• FTC’s Interest in Standard Setting
– Two decades of enforcement and policy
research
– FTC recognizes the pro-competitive benefits of
standard setting and interoperability
– Abuse of market power created through
standard setting
3
Balance between IP Rights and Competition
• Patent Law and Antitrust Law work
towards similar goals
– Efficient Competition
– Innovation
• Risk: Patent Hold-Up
– Once the industry has adopted the standard,
implementer investment is tied to the
standard
– Higher royalties based on switching costs,
not on the value on the invention
4
Managing Hold-Up
• Standards Development Organizations
(SDOs) have sought to mitigate hold-up
– Disclosure of IP
• Patent implications of adopting a particular standard
– RAND (Reasonable and Non-Discriminatory)
commitments
• Intended to protect implementers who need access
to SEPs
5
What is the FTC’s Concern?
• Patent Hold-Up with Standard Essential
Patents
– RAND Commitment is made in Standard
Setting Process
– An SEP holder may threaten or seek injunctive
relief as a way of securing terms that are
inconsistent with the RAND commitment
6
ITC vs. District Court
• Two venues in the U.S. to seek injunctions
– Federal District Court
• Can grant injunctions and/or monetary remedies
• Controlled by eBay Inc. v. MercExchange LLC, 547 U.S. 388
(2006)
– Limits circumstances where court will grant an injunction
– International Trade Commission
• Primary remedy is injunction (exclusion order)
• Not bound by the eBay case
7
Conclusion
• SDOs are capable of solving the hold-up
problem
– Clarification of the RAND commitment with
respect to injunctions
• FTC will continue to monitor the standard
setting process
– Investigate instances of hold-up
– Develop policies to mitigate the likelihood of
hold-up
– Protect the standard setting process
8