Voluntary industry standards on technical specifications play an important role in the economy by ensuring interoperability among complementary products and interchangeability between competing products. Once such a standard is established it may be prohibitively difficult to switch to an alternative technology. As a result, the owner of patented technology incorporated into a standard may engage in "patent hold-up" by asserting the patent to exclude a competitor or obtain a higher price for using the technology than would have been possible before the standard was set. Standard-setting organizations (SSOs) rely on voluntary licensing commitments, which often take the form of an agreement to license on fair, reasonable, and non-discriminatory (F/RAND) or reasonable and non-discriminatory (RAND) terms, to mitigate the possibility of patent hold-up.
By statute, an injunction is available in the United States as a remedy for patent infringement. In eBay v. MercExchange,1 the Supreme Court held that a court evaluating a request for an injunction in a patent case must consider, among other factors, whether monetary damages are adequate and whether an injunction would be in the public interest. European courts also grant injunctions to prohibit patent infringement. Recently, two courts in the United States have held that an injunction was not available to an owner of a standard-essential patent (SEP) where the patent owner had previously committed to license the patent on F/RAND terms. The Antitrust Division of the Department of Justice recently issued a policy statement to the same effect, and the Federal Trade Commission (FTC) has issued two decisions stating that merely seeking an injunction in these circumstances can constitute a violation of Section 5 of the FTC Act. Similarly, the European Commission competition authority (EC) last year initiated investigations of Samsung and Motorola for such conduct.
