U.S. approach to industry-standard patents undergoes policy-shift

In a far-reaching policy shift, officials from the United States antitrust and patent office stated they no longer deem holders of industry-standard patents anti-competitive if they sue to stop the sale of infringing products.

In a joint statement, the U.S. Justice Department, and the U.S. Patent and Trademark Office as well as the National Institute of Standards and Technology released a policy statement on standard essential patents which essentially replace its policy since 2013.

In the tech industry, standard essential patents are often used when makers of different types of devices want them to work harmoniously together. Case in point: cellular networks, phones and mobile towers uses a wide body of patents from different patent holders but must work with each other across makers and borders.

So as to arrive at a single standard, companies including Ericsson, Nokia and InterDigital Wireless contribute their respective patents to a certain technology such as 5G.

Every company that makes cellular devices are required to adopt that technology and pay a license fee to patent holders. In exchange, the holders agree to license the patents on fair and reasonable terms.

In 2013, the Justice Department and Patent Office took the view that it was anti-competitive behavior for patent holders to seek injunctions to block the sale of a products for infringing standards patents. However, holders could still seek monetary damages without running afoul of the policy.

This policy has now been reversed, with officials saying patent holders seeking to block sales in standards patents cases present no harm to competition and standards patents should be treated no differently than other patents.

“Our patent system is what has made the American economy the innovation capital of the world, and we should not misapply the antitrust laws to diminish the incentive to innovate,” said Assistant Attorney General Delrahim in a statement.

Categories: Creativity, Economy & Finance, Entrepreneurship, HR & Organization, Regulations & Legal, Strategy

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