FTC Hosts Workshop on Preventing Patent “Hold-Ups” in Standard-Setting


The FTC recently hosted a workshop on preventing patent “hold-ups” in standard-setting. Panelists addressed and evaluated the three main tools currently used by SSOs to prevent patent hold-ups: patent disclosure rules, ex ante disclosure of licensing terms by patent holders, and RAND commitments. The FTC has yet to formally comment on the workshop, but may prepare a report discussing the issues raised in this project.

On June 21, 2011, the Federal Trade Commission (FTC) hosted a workshop on preventing patent “hold-ups” in standard-setting. A patent “hold-up” occurs when an industry-wide standard incorporates patented technology, allowing the patent owner to then leverage for higher or more costly royalties or licensing terms than could have been obtained before the standard was chosen. Most patent hold-up situations in which the FTC is involved result from the FTC determining that the patent owner did not disclose the patents prior to the incorporation of the standard. The FTC has brought enforcement proceedings against patent holders who have allegedly engaged in this conduct, most notably with Rambus, Dell, and Unocal.

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