Seeking Comment on Standards, SEPs, and Competitiveness

by Dennis Crouch

The U.S. Patent and Trademark Office (USPTO), International Trade Administration (ITA), and National Institute of Standards and Technology (NIST) have extended the deadline for public comments on their request for information on standards and intellectual property. The new deadline is November 6, 2023.

On September 11, 2023, the three agencies jointly published a request for comments in the Federal Register seeking input from stakeholders on issues related to standards and intellectual property, especially as they impact small and medium enterprises in critical and emerging technologies.  This request complements a broader NIST request published on September 7, 2023 seeking comments on implementing the U.S. Government National Standards Strategy for Critical and Emerging Technologies. Both requests were originally due on October 11, 2023.

Specific topics of interest include:

• Participation of U.S. firms in international technical standards development
• Ability of U.S. companies to adopt technical standards to grow and compete globally
• Issues small and medium enterprises face regarding technical standards and intellectual property
• Fostering standardization of critical and emerging technologies
• Policies related to standard essential patents (SEPs)

Technical standards play a critical role in ensuring interoperability and have potential benefits of both enhancing competition and driving innovation.  Innovator companies can compete on implementation, quality, features, and price rather than controlling a proprietary technology that locks-in users. The standard interface becomes a platform for market competition.  For nascent technologies, early standards adoption can help coordinates efforts to advance the state of the art.

The IP side of standards development and adoption can be fairly complex.  Patents that cover technologies essential to implementing a standard are known as standard essential patents (SEPs). If not properly licensed, SEPs can enable patent holders to exert undue market power across entire industries. This highlights a need to balance rights of patent holders with obligations to license SEPs on fair, reasonable, and non-discriminatory (FRAND) terms.  Although I am not a fan of forced participation, there is a rationale for considering policy options to incentivize licensing of SEPs on FRAND terms, and discouraging patent holder from laying in wait until standards develop. For example, measures that increase transparency around patent declarations, licensing terms, and availability of dispute resolution may help balance good faith participation and voluntary consensus in standards bodies. Improved patent search and analysis can also help ensure that all SEPs are captured within the pool.

On the international level, standards and intellectual property issues are intricately linked to U.S. global competitiveness, especially in emerging technology areas.  Divergent national/regional approaches can disadvantage U.S. technology companies as they expand globally — assuming growth in that direction.  At the same time, those approaches open the door to price discrimination (and avoiding arbitrage) by selling products that only work within certain regional standards.

Submitting Comments:

To submit comments on the joint USPTO, ITA, and NIST request, refer to the Federal Register notice published on September 11, 2023. Comments can be submitted electronically via www.regulations.gov.