Welcome FTC Commissioner Speech on Standard Essential Patents and Antitrust

2 November 2021, Brussels – The Fair Standards Alliance (FSA) commends the US Federal Trade Commissioner’s stance on the importance of antitrust enforcement in relation to standard essential patents (SEPs). The FSA strongly agrees that safeguards in the standard-setting process, such as commitments to license on fair, reasonable, and non-discriminatory (FRAND) terms, are critical to promote innovation.

In a speech delivered on 29 October 2021, FTC Commissioner Rebecca Slaughter stressed that “antitrust laws have an important role to play in the standard-setting context, including conduct related to the use or abuse of SEPs”.

The FSA is also encouraged by the anticipated “close cooperation between the [Department of Justice] and FTC and the shared commitment to protecting and promoting competition, especially at its intersection with intellectual property.”

We could not agree more that the threat of exclusion against a willing licensee can enable SEP holders to leverage that threat into royalties that are not in fact FRAND. We share the Commissioner’s “strong belief that SEP holders should not be able to seek exclusionary remedies against a willing licensee” – a stance we have taken for years, also based on EU case law.

As an alliance of businesses of different sizes from around the world and from across the value chain, we also share the Commissioner’s conclusion that competition and innovation from small and medium sized entities is most at risk of being inhibited or completely lost when SEP holders anticompetitively leverage their market power.

Based on our experience, small businesses do indeed have serious concerns about unchecked SEP licensing abuses that result in cost uncertainty and delays in bringing products and new technology to market.

Amongst other thoughtful observations the Commissioner has made in the speech, we also very much appreciate her clarifying that, unlike holdup, holdout is not an antitrust problem as “it does not pose the same concerns from a competition standpoint as holdup, which has the potential to exclude firms from implementing a standard.”

Robert Pocknell, the Chair of the FSA, said: “This FTC Commissioner speech is very encouraging in many respects as it signals a welcome step to restore balance to the licensing of SEPs. What we need now is an international consensus on these principles, and to ensure that those seeking to license SEPs on FRAND terms are able to do so on a level playing field. As the Internet of Things continues to gain pace, with more and more companies integrating standardised technologies into their products, the need for antitrust enforcement is needed more now than ever”.

The FSA looks forward to working with all branches of the US government to develop policy that creates balance in the standards ecosystem and promotes innovation within a competitive marketplace.

Rebecca Slaughter, “SEPs, Antitrust, and the FTC” Remarks of Commissioner Rebecca Kelly Slaughter

As Prepared for Delivery, (29 October, 2021)