AAI Urges FTC to Take Stronger Action Against Patent Holdup Conduct in Connection with Standard Setting Activities

The American Antitrust Institute responded to the Federal Trade Commission’s (FTC) new standard-setting project yesterday by filing comments.

The FTC was seeking comments on “the practical and legal issues arising from the incorporation of patented technology in collaborative standards” with particular reference to “the risk of patent hold-up and its effects on competition and consumers.”

The AAI urged stronger agency action to prevent patent hold-ups that subvert open standards efforts through

  • more meaningful obligations to disclose patent interests during the course of standard-setting processes
  • effective alternatives to now-common but vacuous RAND license commitments such as required ex ante disclosure of license terms
  • requiring assignees of patent interests to honor prior owners’ license commitments

The AAI has, on several occasions, supported and encouraged the FTC’s actions to address the hold-up problem in connection with standards development activities. “We now urge the FTC to remind standard-setting organizations of their exposure to antitrust liability for failure to implement effective safeguards against abuse of their processes, particularly abuses that can that can lead to anticompetitive patent hold-up outcomes,” said AAI President Bert Foer.

The full text of AAI’s comments is here.