Actions the U.S. Government Can Take to Protect the U.S. Economy From Unfair Practices

In our increasingly connected world, telecommunications and network interoperability is crucial to the United States economy.  Interoperability is provided by functional, well-designed standards.  If the U.S. is to maintain its leadership in the networking, telecommunications and emerging IoT markets, the U.S. government must act to protect the critical standards, such as Wi-Fi and cellular, used by Americans and American companies.

The first step in this process is recognizing that, even though most standard developers and SEP holders, are acting in good faith, that does not mean they all are.  The U.S. should not allow a few companies to hijack important standards.  The United States government should act to protect the rights of American companies and American consumers who use critical standards from unfair and harmful behavior by standard developers and SEP holders.

Here are a few things I urge the Trump Administration to do to protect American businesses and consumers, and stamp out damaging behavior by bad faith actors.

1.      Stop a few Senators from remaking the U.S. legal system to be more like Germany’s.  Prevent the so-called “RESTORE” Act, or similar legislation, from ever becoming law.  See, Just Say No to the "Restore" Act. 

2.      The International Trade Commission ("ITC") is tasked with protecting U.S. domestic industry, not foreign companies, but it has lost sight of what that means. It therefore is time to stop the duplicative and wasteful reliance on the ITC by foreign companies seeking to prevent American companies from selling products in America.  Remove the ITC’s jurisdiction over patent infringement claims except for cases filed by a U.S. company in which U.S. courts do not have jurisdiction over the foreign respondent.  See, U.S. International Trade Commission - An Agency Run Amuck

3.      Enforce existing competition laws to prevent unfair practices by standard developers and SEP holders, including reviewing such behavior across different standard setting organizations and different standards to determine whether an entity, or group of entities, has engaged in anticompetitive activities when their behavior is viewed across a single or multiple standards.  See, Back to Basics – An Overview of Competition Law, Standard Development and Standard Setting

4.      Maintain the right of implementers to challenge bad patents through the less costly mechanism of inter partes review at the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board.

5.      Support litigation transparency in SEP cases, including by requiring upfront disclosure in litigation of any licenses that include the SEPs in suit, any refusals to license and any third-party financing used for purchase of the SEPs or to fund the SEP litigation. 

6.      Investigate third party financing of SEP purchases and litigation in order to prevent individuals, entities and governments subject to U.S. sanctions, illegal cartels, and those who obtained their money illegally, from providing third party litigation or patent purchasing financing (including indirectly).

7.      Work with foreign governments to limit the availability of injunctions in SEP cases in foreign courts.  In all cases, courts should balance the equities and carefully consider the public good.  Injunctions should not issue when it would be unfair or unreasonable or would harm the public interests which would be the case in nearly every SEP related patent matter. 

8.      Work with foreign governments to prevent SEP holders from unfairly running to foreign courts in order to end run around the protections offered by U.S. courts by creating a worldwide equivalent of “forum non conveniens.”  When global SEP portfolios are at issue, cases should first be brought in the jurisdiction which is the locus of the alleged infringement, or which has the closest connection to the dispute, for example the jurisdiction in which the implementer (not some small subsidiary) is located or where the implementer has the majority of its sales.  If cases are brought in other jurisdictions, they should be stayed pending resolution of the primary case.

I urge the Trump Administration to undertake these commonsense actions to prevent bad behavior by certain entities, and to aid U.S. businesses and U.S. consumers who want to use critical standards.