DOJ will not oppose IEEE patent policy

By Colleen Taylor, Contributing Editor -- Electronic News, 5/1/2007

The United States Department of Justice (DOJ) announced in a business review letter Monday that it will not oppose a proposal by the Institute of Electrical and Electronics Engineers (IEEE) to implement a policy on the disclosure and licensing of patents in IEEE's standards-setting process.

The policy, which goes into affect at noon eastern today, allows patent holders to commit publicly to specific restrictions on their future licensing terms and conditions for the use of patents that are essential to IEEE standards. The DOJ said that the policy does, indeed, have some pro-competitive benefits and that it may enable the IEEE to make better-informed decisions when formulating standards that will benefit consumers.

The policy gives holders of patents essential to IEEE standards the option of publicly committing to the most restrictive licensing terms they would offer. Under the policy, the patent holder could also choose a number of other options. It could: choose not to provide any licensing information; state that it does not believe its patents are essential to the IEEE standard; state that it will not assert its essential patent claims against implementers of the standard; or commit to license its essential patent claims on reasonable and nondiscriminatory terms. The policy also clarifies that these types of assurances about future patent licenses are irrevocable, and that they are binding on affiliates of the patent holder. IEEE-SA implementation of the patent policy should permit IEEE "standard-setters" to access the relative costs of competing technologies.

In October 2006, the DOJ issued a business review letter to another standard-setting organization, VMEbus International Trade Association (VITA), in which the DOJ concluded that mandatory disclosure of a patent holder's most restrictive licensing terms before a standard is set can preserve "the benefits of competition between alternative technologies that exist in the standard-setting process." In the DOJ's letter Monday to IEEE, Assistant Attorney General Thomas Barnett said that IEEE's patent policy "could generate similar benefits as patent holders may compete to offer the most attractive combination of technology and licensing terms." In addition, the increased information that may become available should improve the decision-making of IEEE standard-setters.

"The requests from VITA and IEEE show that individual SDOs [standards development organizations] are working to find patent disclosure and licensing policies that will improve the efficiency of their standard-setting activities," Barnett said in the letter. "The antitrust laws permit reasonable efforts to enhance the effectiveness of such beneficial collaborative activities."

The policy is still open to amendments, however. Under the DOJ's business review procedure, an organization may submit a proposed action to the antitrust division and receive a statement as to whether the division will challenge the action under the antitrust laws.