AIPLA Submits Comments to the US Department of Justice on Draft Policy Statement on Licensing Negotiations and Remedies for Standards-Essential Patents Subject to Voluntary F/RAND

On February 4, 2022, the American Intellectual Property Law Association (AIPLA) submitted comments to the United States Department of Justice on on Draft Policy Statement on Licensing Negotiations and Remedies for Standards-Essential Patents Subject to Voluntary F/RAND.

AIPLA regularly comments on issues concerning the development, protection, commercialization, and licensing of intellectual property rights (“IPRs”), nationally and internationally. AIPLA has previously explained the importance of strong IPR protection when considering the intersection of intellectual property and competition law. AIPLA agrees with the agencies that legal rules that incentivize the efficient licensing of standards-essential patents (“SEPs”) advance innovation, consumer choice and competition, and promote the participation of small- and medium-sized enterprises in the standards ecosystem. AIPLA also commends the agencies for recognizing that SEP licensing negotiations can be complex and that both licensors and licensees have the incentive to engage in opportunism, which unnecessarily increases the transaction costs of SEP licensing and adds an unnecessary burden to the standards-development ecosystem.

We are concerned, however, that revising the 2019 policy statement as indicated in the draft may hinder rather than advance the agency’s worthy goals. Federal courts have now clarified that SEPs subject to a voluntary contractual commitment to license on reasonable and nondiscriminatory or fair, reasonable, and nondiscriminatory (together
“F/RAND”) are not subject to special remedies rules under federal patent law. Instead, courts have held that the specific F/RAND contractual commitment, which may vary across standards-development organizations (“SDOs”), is a fact that is relevant to evaluating the appropriate remedy for infringement under existing law.

AIPLA recommends the agencies leave the 2019 statement in place. The 2019 statement accurately describes Supreme Court and Federal Circuit law on patent remedies for infringement of SEPs subject to a F/RAND commitment and, importantly, clarifies the misunderstanding associated with the 2013 statement. Withdrawing the 2019 statement will signal that the document is inaccurate, which it is not.

If the agencies ultimately determine to issue a third policy statement, which AIPLA believes is counterproductive, we provided more detailed suggestions including eliminating commentary on settled law that goes beyond what the courts have held, and eliminating or modifying the proposed licensing negotiation framework, as set forth in the full comment letter. (Downloadable as a PDF to the left)