Professor Patterson’s antitrust essay has been updated. I had inadvertently posted a draft version. ☹ – DDC
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Guest Post by Professor Mark R. Patterson (Fordham)
The past few months have seen a remarkable back-and-forth between Makan Delrahim, the Assistant Attorney General for the Antitrust Division of the Department of Justice, and attorneys both objecting to and supporting his views on standard-essential patents (SEPs) and standard-setting organizations (SSOs). For parties who are interested in this controversy but who do not have time to review and compare all the documents, I have annotated them, with Acrobat sticky notes keyed to highlighting of text.
- Speech by Delrahim Nov 10 annotated
- Letter from Industry Jan 24 annotated
- Letter Commending Delrahim Feb 13 annotated
- Speech by Delrahim Mar 16 annotated
- Speech by Delrahim Apr 10 annotated
- Letter to Delrahim May 17 annotated
- Response by Delrahim May 18 annotated
- Article by Willard Tom June 18 annotated
To put my cards on the table, I am largely in agreement with AAG Delrahim’s critics, though I did not sign either of their letters. I agree with Delrahim that it is reasonable to devote scrutiny to the patent “hold-out” problem that is his focus, but doing so does not require dismissing a well-established consensus on the validity and harm of patent “hold-up.” The most compelling evidence for hold-up, it seems to me, is the 100-to-1 ratio of royalty demands to royalty awards that have been seen in some cases. Perhaps that differential is the product of confused courts, but despite the calls of AAG Delrahim and his supporters for evidence or more evidence for hold-up, they themselves provide nothing to show that the courts are confused. Nor do they provide empirical evidence to demonstrate the claimed greater importance of hold-out.
In the (currently) final document from AAG Delrahim in this saga, he states that the DoJ is “not able to comment on any pending investigation or evidence that [they] have reviewed.” As I note on that document, the possible problems he suggests might turn out to be present in the SEP context, perhaps in the process of the 2015 amendment of the IEEE’s patent policy, to which the speeches might obliquely refer. If so, his speeches will merely have been valid warnings to SSOs. Again, though, the speeches seem to go much further than necessary in dismissing other problems.
I make no claim to complete objectivity or thoroughness in my annotations, which are only my immediate responses to various points made in the documents. But I have pointed out what I think are weak points and strong points not only in the comments of Delrahim and his supporters but also in the responses of his critics. Also, some of my points in some of the documents are raised also in others, but I have tried to avoid duplication.
Finally, the annotation approach that I take here might seem more argumentative than necessary. Obviously neither my own writings nor anyone else’s would emerge unscathed from such an approach, but some of the rhetoric in these documents is best addressed in this way. I also think this approach is warranted by the importance of the issues, the dramatic differences in the views expressed, and the unfamiliarity of some with these issues. This controversy deserves even more attention than it has already received.
Mark R. Patterson is a Professor of Law at Fordham University School of Law.