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Comments on the DOJ, USPTO and NIST 2021 Draft Policy Statement on Licensing Negotiations and Remedies for Standard-Essential Patents Subject to F/RAND Commitments

Comments to the Department of Justice, Antitrust Division (DOJ), United States Patent and Trademark Office (USPTO) and National Institute of Standards and Technology (NIST) Draft Policy Statement on Licensing Negotiations and Remedies for Standard-Essential...

One of the experts within the European Commission’s Standard Essential Patents (SEP) Expert Group proposed the formation of licensing negotiation groups (LNGs) by implementers to collectively negotiate with SEP owners and patent pools. Accordingly, LNGs could be used for a more efficient SEP licensing process, particularly relevant in the Internet of Things (IoT) with increasingly new stakeholders entering the market.

This article examines how LNGs could work in practice and raises concerns about LNGs turning into hidden buyers’ cartels creating an industry-wide collective holdout. As a less restrictive alternative, this article explains how existing patent pools and other similar licensing platforms that aggregate complementary SEPs and provide a onestop shop for licensing already enable the efficiency and transaction costs savings in the IoT with no harmful anti-competitive effects. By gathering inputs from individual implementers before the formation of royalty programs, some licensing platforms can ensure that implementers are consulted and participate in royalty formulations without the risk of collusive outcomes.

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