Some Additional Commentary on the December 2019 USPTO/DOJ/NIST Policy Statement on Injunctions and SEPs

Shortly before Christmas, the USPTO, the Antitrust Division of the Department of Justice, and the National Institute of Standards and Technology issued a new Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments.  The new statement replaced the USDOJ/USPTO 2013 Policy Statement on Remedies for the Standards-Essential Patents Subject to Voluntary F/RAND Commitments.  I blogged about the new policy statement a couple of times in January (here and here), first calling attention to a critical analysis I published in Law360 titled Gov't Policy Statement on SEP Remedies Should be Cabined, and second to an analysis published by Michael Carrier on Bloomberg News titled New Statement on Standard-Essential Patents Relies on Omissions, Strawmen, Generalities.  Here are a couple more recent analyses, both of which make some excellent points:

1.  Herb Hovenkamp has published a short piece titled Justice Department's New Position on Patents, Standard Setting, and Injunctions, Reg. Rev., Jan. 6, 2019.  Here is a link to the paper, and here is the abstract:

A deep split in American innovation policy has arisen between new economy and old economy innovation. In a recent policy statement, the Antitrust Division of the Justice Department takes a position that tilts more toward the old economy. Its December, 2019, policy statement on remedies for Standard Essential Patents issued jointly with the U.S. Patent and Trademark Office and the National Institute of Standards and Technology reflects this movement.

The policy statement as a whole contains two noteworthy problems: one is a glaring omission, and the other is a mischaracterization of the scope of antitrust liability. Both positions are strongly relevant to the pending Qualcomm litigation in the Ninth Circuit.

First, the Statement say nothing about the conduct of patent holders. The Patent Act authorizes patent injunctions “in accordance with the principles of equity.” Under the equitable principle of “unclean hands,” a patentee who is in serious default of its own legal obligations cannot obtain an injunction, at least not until its own bad conduct has been terminated.

Second, the Statement’s declaration that FRAND disputes do not raise antitrust issues is false. In the first instance FRAND disputes are about contracts. But if a firm’s anticompetitive use of FRAND-encumbered patents meets the power and conduct requirements of the antitrust laws it can be unlawful under them as well.

Guidelines from the government are very useful when they state the law or an agency’s own enforcement position, or when they clarify ambiguities. But they are not legislation. They do not bind courts, other government agencies, or private plaintiffs, particularly not when they conflict with clearly established law. 

2.  Jay Jurata and Emily Luken have published a piece on Law360 titled USPTO, DOJ Downplay Essential Patents' Licensing Terms.  The authors wonder whether "the new policy statement is a solution searching for a problem," and like Hovenkamp note that "the new policy statement minimizes the significance of a patent holder's voluntary FRAND commitment."  They also argue that the policy statement's "actual effect should not be overstated," seeing how "has no force or effect of law" and "does nothing to alter the noteworthy and significant decisions issued by U.S. courts interpreting the scope and meaning of the FRAND commitment that emerged after the original 2013 statement."

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On a somewhat related topic, Mathieu Klos has an interesting article on JUVE Patent titled Sisvel vs. Haier judgment could see FRAND standardised in Germany.