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26 May 2011
The Federal Trade Commission (FTC) is consulting on the specific problem of patent hold-up in standard-setting organisations (SSOs). The FTC and Department of Justice have recognised that the standard-setting process furthers innovation and leads to better products and more competition. However, they have also expressed concern that standard-settings organisations can raise antitrust risk. Once a certain technology is incorporated into a standard, it can make it more difficult for a manufacturer to switch to another technology later. If the technology is protected by IP rights that were not disclosed to the SSO before the technology was adopted, the patent-holder may demand a higher royalty or more costly licensing terms from manufacturers than it would have obtained if it had disclosed the standard. The FTC in particular has expressed concern that this could undermine the integrity of the standard-setting process and, ultimately, harm consumers if manufacturers pass on these extra costs to their customers(1).
The FTC is examining three ways to prevent this problem of patent hold-up:
The FTC is seeking comments on several questions related to these issues, which are listed in the FTC's Federal Register notice. Comments must be received by the FTC on or before July 8 2011.
For further information on this topic please contact Eric J Stock at Hogan Lovells US LLP New York office by telephone (+1 212 918 3000), fax (+1 212 918 3100) or email (firstname.lastname@example.org). Alternatively, contact Logan M Breed or Michaelynn R Ware at Hogan Lovells US LLP Washington DC office by telephone (+1 202 637 5600), fax (+1 202 637 5910) or email (email@example.com or firstname.lastname@example.org)
(2) Request for Comments and Announcement of Workshop on Standard-Setting Issues (May 9 2011) www.ftc.gov/os/fedreg/2011/05/110509standardsettingfrn.pdf
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