IP for the Next Generation of Mobile Technology: How the Antitrust Division Devalued Standard-Essential Patents

In advance of our Sixth Annual Fall Conference on IP for the Next Generation of Technology, we are highlighting works on the challenges brought by the revolutionary developments in mobile technology of the past fifteen years.

As we highlighted in previous posts in this series (see here and here), a 2015 policy change at the Institute of Electrical and Electronics Engineers-Standards Association (IEEE)—a standard-setting organization (SSO) for mobile technologies—placed one-sided restrictions on patent owners that have demonstrably harmed innovator participation and technological advancement.

Writing about the policy revisions, economist Gregory Sidak, the Founder and Chairman of Criterion Economics LLC in Washington, D.C., explains how the IEEE made these profound changes to its patent licensing policies with the encouragement and blessing of the Antitrust Division of the U.S. Department of Justice. The amendments were intended to ameliorate the supposed problems of patent holdup and royalty stacking, but they went much further than necessary and weakened the rights of patent owners in the process.

Despite the lack of evidence of harm from patent holdup or royalty stacking, the Antitrust Division commended the IEEE for changing its policies. Mr. Sidak notes that the Antitrust Division simultaneously turned a blind eye to the collusion of the implementers who had pushed for the changes (and who benefited from them by way of suppressed royalty obligations at the expense of the patent owners), and he argues that this course of action was a dereliction of duty on the part of the Antitrust Division to dispassionately assess the competitive implications of such concerted activity.

To read the Sidak article, which was published in the Georgetown Law Journal, please click here.