Wednesday, August 7, 2013

Double Standards-Setting

On June 4, 2013, the United States International Trade Commission ("ITC") decided In the Matter of CERTAIN ELECTRONIC DEVICES, INCLUDING WIRELESS COMMUNICATION DEVICES, PORTABLE MUSIC AND DATA PROCESSING DEVICES, AND TABLET COMPUTERS (Inv. No. 337-TA-794).  In its decision, the ITC, a hybrid federal court-agency with authority to regulate trade via imports and sales, decided to issue an exclusion order banning imports, and a cease and desist order forbidding sales, of some older Apple Inc. mobile electronic devices on the grounds that they infringed claims of patents owned by Samsung Electronics Co..  Apple invoked as a defense Samsung's alleged violation of its obligations to make license standards-essential patents to Apple under fair reasonable and non-discriminatory ("FRAND") terms.

Growing interest by governments,  industry, and scholars in the roles of patents in standards setting, and particularly the possible dangers posed to healthy competition by abuses of patents essential to widely-adopted technical standards, has raised the consciousness of terms like FRAND and its less restrictive cousin reasonable and non-discriminatory ("RAND").  The National Academies have been intensively studying the issue, including its impacts on important emerging technologies like synthetic biology.  Thus, it was only somewhat surprising that President Barack Obama, via United States Trade Representative Irving A. Williamson, decided to "disapprove" (that is, veto) the decision of the ITC, thus allowing Apple to continue to import and sell goods the ITC found to infringe claims of Samsung's patents.

Although the disapproval letter issued by Williamson includes a mandatory reaffirmation of U.S. support for intellectual property rights and innovation, it also raises the specter of standards-essential patent abuse.  The tension between strong patent rights and competition will always be with us.  Now standards setting has become a significant new front in this conflict.

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