Dear Readers,
While on a certain level, antitrust and patent laws share the ethos of fostering innovation and checking anti-competitive conduct, they also differ in their methods – in that patents effectively create legally recognized monopolies and are a well-accepted exception to antitrust regulation. Standard essential patent (“SEP”) licensing (where the SEP holders agree to license their products on fair, reasonable, and non-discriminatory (“FRAND”) terms in lieu of adoption of their technology standards) is an issue that rests at the intersection antitrust laws and patent laws. Standard-setting in the U.S. is sectoral and market-led, while in certain countries it is state-led / influenced – which may place SEP licensing issues at the crossroads of law and international diplomacy, adding another layer of complexity.
Lately, SEP licensing has been at the front and center of the policy debates across the globe. Illustratively, in the U.S., there has been an update to the patent policy of the Institute of Electrical and Electronic Engineers, Inc., which has been received favorably by the DOJ and a decision by a U.S. Court of Appeals that discusses how royalties should be calculated. Elsewhere, Korean and Chinese authorities have stepped up on the issue and have taken stands with respect to SEP licensing in recent decisions.
Our contributing authors in this special issue on SEP licensing discuss various facets of the issue. The articles trace the U.S. competition landscape with respect to patent rights, the underlying principles of FRAND terms, critically examine recent case law, and ask certain relevant questions, such as – whether the focus of FRAND terms should be on checking excessive returns to the SEP holder or to preclude collusion amongst patentees, whether DOJ approval of the IEEE’s patent policy update is beneficial for innovation and whether it sets a good global precedent, what is a “reasonable” royalty for a RAND-encumbered patents, what is the optimal method for determining royalty base, what are the economic and legal theories regarding royalty stacking, whether there is empirical evidence to support the concerns regarding royalty stacking, whether there needs to be regulation of non SEP holders as well, how have the Chinese and Korean authorities dealt with the SEP licensing issues, and so on. While the jury is still out on the issue of SEP licensing and what is the best way forward to balance innovation and consumer interest, we hope that this issue is useful in steering the discourse in right direction.
As always, thank you to our great panel of authors.
Sincerely,
CPI Team
