Congress considers forbidding sales bans on essential patent products

Summary:Congress will consider later today whether there are antitrust concerns relating to U.S. sales injunctions on products that infringe standard-essential patents.

The Senate Judiciary Committee will discuss later today whether antitrust concerns could arise from companies seeking U.S. sales bans on products that infringe on standard-essential patents. 

The U.S. Federal Trade Commission and the U.S. Justice Dept. will also be present and give evidence in a bid to determine whether those who own standard-essential patents should be barred from asking for injunctions that would see rival products banned from sale.

Standard-essential patents are technologies that are required to be licensed on "fair and reasonable" (FRAND) grounds to allow compatibility between devices and rival products. It's what allows MPEG files to run across different devices, or allowing Bluetooth connectivity between a PC and a smartphone. 

Anyone wishing to use the patent can do so subject to license fees, which have to be fair and not extortionate. Many have fallen foul of FRAND rules with rival companies accusing patent owners of charging too much for the privilege of allowing their own products to work.

This often results in rival companies heading to court. Outcomes often result in either a patent holder found guilty of breaching FRAND terms and charging over the odds based on a claim from another company, or failing that: a sales injunction, banning the 'infringing' product from store shelves.

We saw this only a few weeks ago with Motorola successfully pursuing sales injunctions against Microsoft's Xbox 360 at the U.S. International Trade Commission (ITC) earlier this year.

One of the arguments is that companies holding these essential patents will continue to be expected to license the patents fairly, but they will make less. However, because these technologies are often widely sought after --- particularly consumer-related patents that can be used in a wide range of devices --- companies will still generate vast revenue from the industry-wide technologies they develop.

Mark Lemley, a patent expert and Stanford Law School teacher, said the ITC could cite reasons of "public interest" as a reason for turning down a product ban that infringe essential patents. 

"If they (smartphone makers) had taken the conservatively $15 to $20 billion dollars they've spent on this fight, imagine how much better a place the world would be," said Lemley, speaking to Reuters.

Image credit: CNET.

Topics: Patents, Government : US, Legal

About

Zack Whittaker writes for ZDNet, CNET, and CBS News. He is based in New York City.

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