The Justice Department has confirmed that it is seeking to develop new policies regarding how standards essential patents could be used as tools for anti-competitive practices.
The policy change will mean a big deal for law firms that can combine highly technical intellectual property advice with their antitrust and litigation practices, with a lawyer comparing the demanding skill set to “three-dimensional chess.”
Standards Essential Patents, or SEPs, are a fundamental part of intellectual property for business and innovation because they are so frequently used under license by manufacturing companies other than patent holders.
The policy change was brought up during an online event in late May, when Richard Powers, the acting attorney general of the DOJ’s antitrust division, gave an indication that the government could reverse the relaxed approach implemented by the DOJ under the Trump administration.
A spokesperson for the Department of Justice confirmed in an email to Law.com on Tuesday that it would change its policy on SEPs and antitrust behavior, with the agency still working on the details. The new administration, the DOJ spokesperson said, is rethinking policies at the intersection of intellectual property and antitrust that will best serve competition and consumers.
“The management of the new department is working with career staff to develop a more balanced approach,” said the spokesperson for the Ministry of Justice. “The department wishes to develop neutral and balanced policies in this area that recognize the importance of both antitrust law enforcement and intellectual property protection to our economy and that do not promote a set of interests by compared to others. “
Such policy changes could result in increased business for law firms with in-depth and technical intellectual property benches and a solid track record of representing industry in enforcement actions, lawyers said. .
Trump’s DOJ had “slipped off the gas” over SEPs as a focus of anti-competitive behavior, a Washington-based lawyer said, speaking on condition of anonymity because he currently active cases involving both SEP enforcement and defense.
“That didn’t mean we weren’t busy as litigants. There has been a lot of work to enforce SEPs against violators and defend against allegations of counterfeiting, ”he said. “But we weren’t busy in the antitrust arena. A greater focus on SEPs – not only by the DOJ but also by other agencies – could mean more litigation, but it will also mean a more transparent playing field. It is of no use to businesses that there is unhindered application of SEP. “
In 2015, a few months before Trump took office, in a letter at the Institute of Electrical and Electronics Engineers, the DOJ had expressed the view that SEP holders could violate antitrust rules if they refused to share their licensed patents without a valid reason.
Two years earlier, the Obama administration had vetoed an International Trade Commission exclusion order that Samsung had won against Apple – that veto was based on Samsung SEP’s obligations. This veto signaled that SEP’s blatant abuse could also end up at the center of antitrust authorities.
However, under Trump, the policy expressed in the IEEE letter was effectively returned, and government agencies were generally less active on competitive concerns about SAHs.
“But now the pendulum is swinging back,” said Joshua Pond, partner in the DC office of Crowell & Moring, whose practice centers on blocking and defending infringing IP imports before the ITC. “Policy in this area is being restructured which will result in a significant change in the volume and nature of cases of intellectual property litigators and their clients. “
Pond said he expects business to increase over the next several years as Biden’s policies refocus on IP protections in general and SEPs in particular.
“US law has often been reluctant to enforce SEP obligations. But that seems set to change, and with it the service offerings of law firms in the field. The application of SEP and litigation are sufficiently complex. But when you add antitrust laws, it becomes a three-dimensional chess game, ”Pond said, adding that he expects a demand from lawyers with high-level IP litigation experience. not only at ITC, but also in the Northern California, Delaware and Southern District. New York neighborhood. “Clients are going to want intellectual property litigators who understand these courts. “
In recent months, law firms have positioned themselves for new cases in their IP and antitrust practices. McKool Smith has hired Paul Hastings’ intellectual property litigation expert Blair Jacobs to open an office in Washington and expects at least 12 attorneys to reside by the end of the year.
On the Department of Justice’s shift in antitrust policy to the Department of Justice, Jacobs says that traditionally, when the country moves from a Republican administration to a Democratic administration, antitrust laws are “used more frequently” and investigations are intensified.
“Large MS holders have proactively sought advice from the Department of Justice for a long time,” Jacobs said.
For lawyers who defend and enforce SEPs and FRANDs – fair, reasonable and non-discriminatory use of patents – the threat of antitrust investigations becomes “another arrow in the quiver to be used in negotiations” with competition, Jacobs said .
This article has been updated to clarify the veto over the Samsung-Apple decision.