Antitrust Division Issues Update to 2015 Business Review Letter on IEEE Guidance for Standard-Essential Patents: Update to 2015 Business Review Letter to IEEE Provides Further Evidence That the Antitrust Division Seeks to Have Market Forces—Rather Than Pre-Set Rules—Impact the Terms of Licenses for Standard Essential Patents

Sullivan & Cromwell LLP - September 11, 2020
Read More

In what it referred to as an “extraordinary step,” on September 10, 2020, the Antitrust Division of the U.S. Department of Justice (“Division”) issued a letter supplementing and updating a 2015 business review letter addressing the Institute of Electrical and Electronics Engineers’ patent policy.  The update reinforces the Division’s view that: (1) holders of standard essential patents (“SEPs”) have the same right to seek injunctive relief as other patent holders; (2) reasonable royalties on SEPs can be determined “in a variety of ways,” and that the Division does not agree with a standard setting organization mandating that royalty rates be based on the value of components or the smallest salable patent practicing unit, as contrasted with the value of end products; and (3) SEP policies should “encourage good-faith bilateral licensing negotiations,” without advantaging licensees over licensors.