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Hey, tech titans! Those smartmobe sales bans? Give it a rest. NOW

US Patent Office, DoJ fed up with Apple, Samsung, Moto battles

The smart choice: opportunity from uncertainty

Companies can only ban the sales of rival products using patents essential to communications standards in rare and specific cases. That's the latest common-sense thinking from the US Justice Department and the US Patent Office.

The two bodies have taken the unusual step of releasing a joint policy statement on standards-essential patents (SEP) as their use in smartphone and tablet court cases, usually to shoo away Apple, has increased. The statement didn't name any names, but fandroid firms such as Samsung and Google-owned Motorola Mobility have been known to throw claims of SEP infringement back at the iPhone maker when it takes them to court.

The policy guidelines [PDF] were sent to the International Trade Commission (ITC), which has the power to block imports of patent-infringing gear into the US. The DoJ and USPTO's stance comes after the Federal Trade Commission last week said that SEP infringement should only be punished by cash damages except in special circumstances.

The various federal and judicial bodies are mostly citing competition as the reason to deny sales bans. The DoJ and PTO said that owning SEPs put firms in a position to "gain market power and potentially take advantage of it by engaging in patent holdup".

"The ITC, may conclude, after applying its public interest factors, that exclusion orders (sales injunctions) are inappropriate," the two organisations added.

Of course, while their opinions may carry some weight with judges and lawmakers, no one actually has to obey the statement as it's not legally binding.

Ideally, SEPs are licensed to companies on a fair and reasonable basis so that standardised technologies covered by the patents, such as 3G mobile networking, can be implemented by competing manufacturers and will therefore just work for users regardless of the product they choose to use.

So when a patent owner accuses a rival of infringing a protected system and demands a sales ban, rather than working out a simple licensing deal, it's rather counterproductive for paying customers: if gadget makers can't use established communications standards without being sued or financially ruined, rival devices will become incompatible as each firm invents it own system and buyers face chaos.

That said, the DoJ and PTO were keen to point out that if a potential licensee was offering unreasonable royalty rates in an attempt to evade paying up, or was deliberately avoiding negotiations, then it needed to be held accountable.

"Although we recommend caution in granting injunctions or exclusion orders based on infringement of voluntarily FRAND [fair, reasonable, and non-discriminatory] encumbered patents essential to a standard, DOJ and USPTO strongly support the protection of intellectual property rights and believe that a patent holder who makes such a FRAND commitment should receive appropriate compensation that reflects the value of the technology contributed to the standard," they said. ®

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