An Overdue Reexamination of Antitrust Policy toward SEPs

David Teece and Ed Sherry write about standard-essential patents, commitments to make licenses to such patents available on “fair, reasonable and nondiscriminatory” terms, and treatment of these issues under antitrust law.

In November 2017, Assistant Attorney General Makan Delrahim, head of the U.S. Department of Justice’s Antitrust Division and a patent lawyer, gave a speech at the University of Southern California Gould School of Law titled “Take It to the Limit: Respecting Innovation Incentives in the Application of Antitrust Law.” In that speech, Delrahim gave what we believe to be a salutary reappraisal of antitrust issues regarding standards development and patents implicating standards.

The issue of standard-essential patents, commitments to make licenses to such patents available on “fair, reasonable and nondiscriminatory” terms, and the proper treatment of these issues under the antitrust law has attracted both a voluminous literature and a wealth of case law in recent years. Delrahim said, “Fresh thinking about the implications of SSOs [standards setting organizations} and the proper role of antitrust law is long overdue.” We agree.