Equity, Antitrust, and the Reemergence of the Patent Unenforceability Remedy

Jorge L. Contreras, Professor at American University - Washington College of Law.

11/10/2011
(Original Publish Date: 11/1/2011)

The conventional legal analysis of technical standard setting derives primarily from antitrust law. But antitrust remedies, taken alone, may not be broad enough to address recent abuses of the standardization process. The principal example of this shortcoming is the well-known case of Rambus, Inc., which, over the course of several years, was alleged to have concealed relevant patent applications from a standards organization in which it participated and then successfully sued the entire DRAM industry for royalties after the standard was “locked-in.” Remarkably, Rambus prevailed in its litigation campaign despite aggressive enforcement efforts by the Federal Trade Commission. Rambus’s success stemmed, in part, from inherent limitations of the antitrust theories asserted against it to reach its opportunistic behavior. Another tool for redressing deceptive conduct in the context of standard setting is the equitable remedy of patent unenforceability, the use of which was recently affirmed by the Federal Circuit in Qualcomm v. Broadcom. The Qualcomm decision marks an important advance in the law surrounding standards-based patent hold-up by making available a remedy that is not constrained by the narrow requirements of antitrust law and which is effective toward both defendants in private litigation and the broader community of standards implementers. Though not yet universally acknowledged as such, the remedy of patent unenforceability, when coupled with affirmative theories of liability, may offer the most effective tool available to address patent hold-up in standard setting, both for private litigants and, potentially, for public enforcement agencies.