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First, if a group of patent implementers were to engage in concerted efforts to exclude a patent holder from meaningful participation in standard setting unless the patent holder agreed to offer particular licensing terms dictated by the group of implementers, those facts would raise red flags. Similarly, if patent holders A, B and C were to agree to exclude from consideration for inclusion substitute technology owned by their competitor patent holder D—for the purpose of harming patent holder D, rather than as a result of good-faith efforts to incorporate the most effective technology—that would also raise concerns. While I believe in a very restrained approach to antitrust enforcement when it comes to the legitimate exploitation of valid IP rights, the Division will not hesitate to enforce against anticompetitive collusive conduct, particularly in an area as high-stakes for the American consumer as this one. Speaking at the College of Europe in Brussels, Belgium, on February 21, 2018, Delrahim similarly explained : “The dueling interests of innovators and implementers always are in tension, but the tension is best resolved through free market competition and bargaining. And that bargaining process works best when standard setting bodies respect the intellectual property rights of technology innovators, including the very important right to exclude.” Obviously, there has been a significant shift in DOJ antitrust policy in the several years since the IEEE changed its patent policy and September 2017, when Delrahim was sworn in as the head of the Antitrust Division. There is absolutely no doubt that certain standard setting organizations (SSOs), like the IEEE, have actively sought to regulate patent owners in an actively and objectively anticompetitive way. It seems the time for that may be nearing an end. Increasingly, Delrahim’s speeches are moving past where he began in his USC speech in November 2017 , discussing this being the appropriate time to now have a discussion about the proper role antitrust enforcement plays with respect to standard setting, to his LeadershIP April 2018 speech where he explained the Antitrust Division will not hesitate to enforce against collusive anticompetitive conduct detrimental to patent owners. Furthermore, Delrahim has now several times discussed his view that in a free market, competition based economy the remedy for patent owners violating obligations to SSOs is a contractual remedy, not an antitrust remedy. It seems there is an emerging three-part Delrahim Doctrine: (1) Agreements outside the scope of a legitimate standard setting exercise can have a detrimental anticompetitive effect on competition; (2) When anticompetitive SSO agreements are the result of collusive conduct, any harm resulting to those holding valid IP rights will provoke antitrust enforcement review; and (3) The proper remedy for a patent owner reneging on promises to a SSO is not a preemptive anticompetitive agreement, or antitrust enforcement review, but rather a private contract action. Time will tell, but it sounds like collusive behavior of standard setting organizations, which received a pass under the Obama Administration, will be the type of behavior that will start to provoke antitrust scrutiny during the remainder of the Trump Administration. Gene Quinn is a Patent Attorney and Editor and founder of IPWatchdog.com . Gene is also a principal lecturer in the PLI Patent Bar Review Course and an attorney with Widerman Malek .
For the original version including any supplementary images or video, visit http://www.ipwatchdog.com/2018/04/11/doj-antitrust-chief-standard-setting-concerns/id=95759/
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