Efforts to ban the sale of imported goods because they...

have paved the way for moving many important innovations into the marketplace, including the complex communications networks and sophisticated mobile computing devices that are hallmarks of the modern age.” But such standards-setting can also result in the owner of an SEP gaining “market power and potentially take advantage of it by engaging in patent hold-up” and “may induce prospective implementers to postpone or avoid making commitments to a standardized technology or to make inefficient investments in developing and implementing a standard in an effort to protect themselves,” the agencies said. They said consumers then may pay higher prices because of “unwarranted higher royalties” on SEPs. The U.S. encourages the use of voluntary fair, reasonable and nondiscriminatory licensing commitments, “rather than the imposition of one-size-fits-all mandates for royalty-free or below-market licensing, which would undermine the effectiveness of the standardization process and incentives for innovation,” the agencies said (http://xrl.us/bn94mz). The FTC’s consent order with Google should require the company to license its SEPs on terms that are fair, reasonable and nondiscriminatory (F/RAND) without current exceptions in light of Tuesday’s policy statement from Justice and USPTO, said Microsoft Deputy General Counsel Dave Heiner in a blog post (http://xrl.us/bn94mv). The two agencies said they have concerns “about the potential impact of exclusion orders on ‘competitive conditions in the United States’ and ‘United States consumers’ in some cases involving F/RAND-encumbered patents that are essential to a standard.” In its settlement with Google, the FTC issued a consent order requiring the company to license its F/RAND-encumbered SEPs to competitors. Heiner said settlement “does not live up to the approach outlined by the DOJ and the PTO” because it allows Google to “abandon its promise to make its standard essential patents available on reasonable terms with regard to any firm that has tried to obtain an injunction against any product made by Google on the basis of that firm’s standard essential patents.” In addition to being “logically inconsistent” with the FTC’s settlement with Google, the exception “appears to endorse the notion that holders of standard essential patents may indeed sue each other for product injunctions ... creat[ing] the very harm that the FTC is seeking to address by its order,” Heiner said.