Monday, October 7, 2019

USPTO Director Iancu looking to fix standard-essential patents policy that just ain't broke

Four weeks ago, USPTO director Andrei Iancu gave a keynote address at a Brussels conference on standard-essential patents (SEP) strategy. That event, organized by commercial conference organizer Premier Cercle, covered a wide range of SEP-related topics (unlike my upcoming conference, which is focused on the #1 hot-button issue, component-level licensing).

After explaining the importance of standards, Director Iancu recalled the 2013 joint statement with the USPTO on SEP remedies. Mr. Iancu, without attributing this view to any particular organization or person, said that the 2013 policy statement has been interpreted "as putting the thumb on the scale against injunctive relief for FRAND-encumbered standard essential patents in most cases." And he then mentioned the recent decision of the DOJ Antitrust Division, under Antitrust Assistant Attorney General Makan Delrahim, to withdraw their agency's support for that joint statement.

In that Brussels speech, Mr. Iancu repeatedly indicated that the 2013 policy might not give SEP holders as much leverage as he--a former patent litigator--would like them to have. While the USPTO had not and has not withdrawn its support for the statement yet, he said his agency was "now carefully studying the issue and discussing it internally, with [their] stakeholders, and with other relevant government agencies." He describes the possibility of a new policy in the hypothetical, but let's be realistic: he's not going to stick to the 2013 policy, and the question is just how radical (on a scale from "grossly unbalanced" to "extremist") its replacement will be.

Rutgers Law School professor Michael A. Carrier published a reply to Director Iancu's speech on Law360 (and SSRN) a few days ago. Professor Carrier diplomatically exposes Director Iancu's quest for balance as unwarranted, given that the 2013 policy statement already struck one between SEP hold-up on the one hand and delay tactics by unwilling licensees on the other hand. As the paper notes, the Federal Circuit even cited to that policy statement in a decision clarifying that injunctive relief was available to SEP owners in more situations than a district court had said.

That Law360 article is not the first call on Director Iancu not to join AAG Delrahim in disowning the 2013 policy statement. Earlier this year, an open letter by multiple stakeholders and groups (which I had previously linked to on two occasions) delivered the same message.

Those efforts aren't totally in vain, but the most one can hope for is that the new policy statement won't be totally outrageous, though chances are that it will be.

Messrs. Delrahim and Iancu represent almost precisely the same school of thought with respect to patent policy. There's only a difference in style. While Mr. Delrahim doesn't seem to care about coming across as rash, radical, and highly partisan (as former outside counsel to Qualcomm) and won't even refrain from utterly absurd initiatives such as suggesting that standard-setting organizations that seek to give meaning to FRAND might violate the antitrust laws (while SEP abusers don't in his view) or making an untimely filing in a court case reflecting ignorance of the record, Mr. Iancu is more concerned about perception. He's a more sophisticated pretender. Now he's pretending to be on a quest for balance. He sure isn't.

In his Brussels speech, European-born Mr. Iancu tried to portray himself as understanding both sides of the SEP negotiating table, and called himself "sensitive to the business realities of licensing--both in and out--patent portfolios," including FRAND-encumbered ones. I don't doubt that his former firm (which he'll presumably return to), Irell & Manella, also advised implementers of standards and defended alleged infringers. But I've usually seen them represent plaintiffs, and their page on IP litigation primarily touts their record and expertise in IP enforcement. They also have an IP transactions practice that focuses on the maximization of the value of IP portfolios--which is exactly Mr. Iancu's mission (make bad patents strong again).

Apart from focus, it's good for the IP litigation business when even bad patents are kept alive (take Mr. Iancu's PTAB guidelines for an example) or when even FRAND-pledged patents can be asserted aggressively in litigation, regardless of whether a given litigator is on the asserting or defending side in a given situation. They get paid either way.

I'd love to be wrong on this, but I'd be surprised if Mr. Iancu didn't simply agree with Mr. Delrahim on virtually every aspect of SEP enforcement, just that Mr. Iancu tries to mislead people to think that he's open-minded about it. He's a patent enforcement extremist, the proverbial fox in charge of the hen house, and even Professor Carrier's strong defense of the existing SEP policy statement sadly won't change Mr. Iancu's mind, I'm afraid.

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