August 2019

FTC and DOJ Face Off Over Antitrust And FRAND Licensing In FTC v. Qualcomm

Antitrust law in the United States is regulated by both the Antitrust Division of the Department of Justice (DOJ) and the Federal Trade Commission (FTC). Usually, these two agencies are able to reach a common understanding on antitrust policy and enforcement. Infrequently, they find themselves in disagreement. Currently, the proper antitrust treatment of standard-essential patents and patent-holder commitments to make these patents available on “fair, reasonable and non-discriminatory terms” is such an occasion. The disagreement has come to a head in FTC v. Qualcomm, now on appeal before the Ninth Circuit.

Standard-Essential Patents and “FRAND” First, a brief introduction to standard setting and essential patents.

A technological standard adopted by a standard setting organization (an “SSO”) may sometimes be written in such a way that it is impossible to build a product or provide a service without infringing on one or more patents. When this happens and the patents are owned by a member of the working group creating the standard, the SSO may fear that once a standard is adopted the patent holder will take advantage of its SSO-granted market power and charge an excessive royalty to license the patents – that the patent owner will “hold up” companies that have made an irreversible investment (in a practical sense) in the standard.Read the full article