DOJ & USPTO Argue Against Standards-Essential Patent Sales Bans

Standards Essential Patent Sales ban

Sales bans for infringement of standards-essential patents (SEPs) should only be award in very rare and specific cases, the U.S. Department of Justice (DOJ) and U.S. Patent and Trademark Office (USPTO) said in a joint statement Tuesday, as reported by Reuters. Monetary damages against the infringing company, and not outright sales bans, should be the normal course of action in an increasingly litigious patent-based economy that has seen nearly every major technology firm wage lengthy court battles over the past several years.

SEPs are patents that cover processes that are essential to the functioning of a technology or specification. In order to prevent specific companies from monopolizing entire industries, such as the smartphone market, and protect economic competition and consumer choice, regulatory agencies require that these crucial patents be classified differently from non-essential patents. Companies are therefore required to license their SEPs to competitors under FRAND (fair, reasonable and non-discriminatory) terms.

If a competitor refuses to pay for a license, or if there is a dispute over patent applicability, the SEP owner can still sue the alleged infringer, but the DOJ and USPTO believe that some companies abuse this right to keep competing products out of the U.S. marketplace. The two highest-profile patent gladiators, Apple and Samsung, have both sought injunctions against the sale of each other’s products in the U.S. for violations of SEPs and non-SEPs.

Other major tech firms including Google-owned Motorola Mobility, HTC, and Microsoft have all been involved in a circle of patent litigation in the U.S. and internationally.

With Tuesday’s policy statement, addressed to the U.S. International Trade Commission, the DOJ and USPTO hope that future decisions for sales bans will be rare and allowed only in extreme and specific instances. The public interest would be better served, they argue, by assigning fines to the infringing company rather than removing products from the market.

“The USITC, may conclude, after applying its public interest factors, that exclusion orders (sales injunctions) are inappropriate,” the statement said.

While DOJ and USPTO policy decisions carry the support of the Obama administration, they are not binding and the ITC is free to evaluate their weight to any degree it chooses. The ITC is currently reviewing an earlier decision that cleared Apple of infringement of Samsung’s patents. The DOJ and USPTO policy statement arrived in time for it to be considered by the ITC when making its final ruling, expected in the next week.

Teaser graphic made with help from Shutterstock.

[via AppleInsider]