Overview
The US Department of Justice announced last month that it is requesting public comment on an updated draft policy statement on standards-essential patents (SEP). The December 6, 2021 draft statement was issued pursuant to the Executive Order on Promoting Competition in the American Economy on July 9, 2021. The draft statement seeks to modify a policy statement issued in December 2019, which modified a previous policy statement issued in January 2013. Each policy statement provides guidance on when and how SEP holders who have voluntarily committed to make available a license for a patent on fair, reasonable, and non-discriminatory (FRAND) terms should be entitled to relief for violations.
The December 2021 draft statement steps back from the 2019 statement, which favored SEP holders and suggests a return toward the more neutral position of the 2013 guidance. It also outlines a framework to guide parties in their negotiation of FRAND terms.
- On injunctive relief: the 2019 statement stated that "[a]ll remedies available under national law, including injunctive relief and adequate damages, should be available for infringement of standards-essential patents subject to a F/RAND commitment." However, the 2021 draft statement shifts away from injunctive relief and states that "monetary remedies will usually be adequate to fully compensate a SEP holder for infringement." Similarly, the 2021 draft statement declares: "[w]here a SEP holder has made a voluntary F/RAND commitment, the eBay factors, including the irreparable harm analysis, balance of harms, and the public interest generally militate against an injunction."
- On good-faith negotiation: the 2019 statement stated that SEP holders and potential licensees were "encouraged" to engage in good-faith negotiation to agree on FRAND terms. However, the 2021 draft statement is more emphatic and states that parties "should" engage in good-faith negotiation.
- On guidance to conduct good-faith negotiation: the 2021 draft statement goes further and provides guidance on points for the parties to consider in pursuit of good-faith negotiation, including:
- An SEP holder engaged in good-faith negotiation should alert a potential licensee of the specific SEPs it believes will be or are being infringed and make a good-faith FRAND offer.
- A potential licensee should consider the offer and respond within a commercially reasonable amount of time in a manner that advances the negotiation by: (1) accepting the offer; (2) making a good-faith FRAND counteroffer; (3) raising specific concerns about the offer’s terms, including with respect to validity and infringement of the patents; (4) proposing that issues be resolved by a neutral party; or (5) requesting that the SEP holder provide more specific information on the offer.
- In response, an SEP holder should respond to the potential licensee within a commercially reasonable amount of time in a manner that advances the negotiation by: (1) accepting the counteroffer; (2) addressing concerns about the original offer and making a new good-faith FRAND offer; (3) responding to a request for information; or (4) proposing that issues be resolved by a neutral party.
