In the rough-and-tumble atmosphere of present-day Washington, it is easy to forget common sense can play a role in making policy.
But the motivation for this week's joint policy statement from the Department of Justice (DOJ) and U.S. Patent and Trademark Office (PTO) may be as simple as common sense: bringing balance to the fractious debate over the use of injunctive relief to protect the rights of standards-essential patent (SEP) holders.
The DOJ and USPTO said exclusion orders can be an appropriate remedy when potential licensees refuse to take or accept terms for a fair, reasonable and nondiscriminatory license from the patent holder. Patent holders generally commit to offer fair, reasonable, and non-discriminatory (FRAND) terms when the products of their innovation are adopted as industry standards that are essential to guaranteeing the interoperability of rival technologies.
“Voluntary consensus standards-setting activities benefit consumers and are in the public interest,” the statement said. “Although we recommend caution in granting injunctions or exclusion orders based on infringement of voluntarily FRAND-encumbered patents essential to a standard, DOJ and USPTO strongly support the protection of intellectual property rights and believe that a patent holder who makes such a FRAND commitment should receive appropriate compensation that reflects the value of the technology contributed to the standard.”
The DOJ and USPTO said exclusions orders can be an appropriate remedy when, for example, “the putative licensee is unable or refuses to take a FRAND license and is acting outside the scope of the patent holder’s commitment to license on FRAND terms, “when the putative licensee “refuses to engage in a negotiation to determine FRAND terms,” and when such a putative licensee insists “on terms clearly outside the bounds of what could reasonably be considered to be FRAND terms in an attempt to evade the putative licensee’s obligation to fairly compensate the patent holder.”
Sometimes injunctions and exclusion orders aren’t in the public interest, the agencies also said, noting the facts of individual cases should determine the outcome.
But the moderation of the policy statement seemed a stark contrast with recent opinions expressed by officials at the Federal Trade Commission (FTC) who generally oppose injunctions for violations of standards-essential patents. And in both tone and substance, it seemed a clear rejection of the categorical “one-size-fits-all” FTC suggestions that even the act of seeking an injunction for standards-essential patents is an improper action.
Amid debate over the FTC’s position and a host of legal skirmishes concerning patent enforcement, the DOJ and USPTO acknowledged they are wading into “a topic of significant interest to the patent and standards-setting communities.”