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Slides for Class #4 ASU Technology Standards Seminar February 15, 2010 Brad Biddle 1 Student presentations Student presentations Student presentations Case study: China Policy: Role of government Policy: private stnds & law IPR: Patent pools IPR(+): “Openness” IPR: RAND v. RF Antitrust Business strategy / “Why” Taxonomy / “How” Introduction * 2 INTELLECTUAL PROPERTY ANTITRUST / COMPETITION STANDARDS LAW Two primary ingredients 3 [1] IP: monopoly [2] Standards: joint action by competitors Antitrust: anti-monopoly Antitrust: suspicious of joint action 4 PATENT CLAIM A PATENT CLAIM B • PATENT OWNERS NON-PATENTENED TECHNOLOGY PATENT CLAIM C • SSO • PARTICIPATING FIRMS PATENT CLAIM D STANDARDS-COMPLIANT PRODUCT PATENT OWNERS (POTENTIALLY) BEHAVING BADLY TRANSACTION COST / COORDINATION ISSUES • Anticommons • Patent hold-up / ambush SSOs OR PARTICIPATING FIRMS (POTENTIALLY) BEHAVING BADLY • Royalty stacking • Price fixing • Disclosure rules • Monopsony • Ex ante licensing • Refusals to deal • Patent pools 5 • Sherman Act Section 2 monopolization claims • FTC Act Section 5 unfair/deceptive practices claims 6 PATENT OWNERS (POTENTIALLY) BEHAVING BADLY • Patent hold-up / ambush “During the standards setting process, Party A deceptively represented that they [had no relevant patents]/[would license on RAND terms] but now is seeking excessive post lock-in royalties.” “Party B said it would license under certain terms in the past, but now has changed its mind and is demanding more.” 7 8 V. • FTC wins administrative process, wins in district court, LOSES in appellate court, Supreme Court denies cert. • FTC: JEDEC either would have (1) chosen differently, or (2) ensured RAND; in either case, it’s a Section 2 problem • DC Cir.: if “(2)” then just a price-for-patents issue; not for antitrust law to decide 9 V. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1460997 http://biddle.us/uploads/QCOM_v_BCOM_548_F3d_1004.pdf 10 V. V. Apple: Nokia's "false" F/RAND promise "enabled Nokia to obtain the 'hold up' power it now abusively seeks to wield." http://standardslaw.org/AAPL-NOKCountersuit.pdf 11 N-DATA 12 SSOs OR PARTICIPATING FIRMS (POTENTIALLY) BEHAVING BADLY • Price fixing • Monopsony • Refusals to deal “The SSO has excluded my technology.” “The SSO is conspiring to set my royalties too low.” 13 14 Golden Bridges v. Nokia 15 (Soundview eventually loses, though) Soundview v. Sony 16 TRANSACTION COST / COORDINATION ISSUES • Anticommons • Royalty stacking • Disclosure rules • Ex ante licensing • Patent pools 17 http://www.justice.gov/atr/public/hearings/ip/222655.pdf 18 19 20 21 22