Criterion Economics, Inc. HomeAntitrust and the IEEE’s Bylaw Amendments
In February 2015, the IEEE began regulating the calculation of FRAND royalties for standard-essential patents. It made that change with the encouragement and subsequent blessing of the Antitrust Division of the U.S. Department of Justice, which, several years earlier, had begun urging standard-setting organizations to amend their bylaws. In a speech in October 2012 to the International Telecommunication Union, Deputy Assistant Attorney General Renata Hesse said that the holder of standard-essential patents might “engag[e] in . . . patent hold-up, . . . obtaining an unjustifiably higher price for its invention than would have been possible before the standard was set.” She then itemized policies that she urged standard-setting organizations to adopt. The Patent Committee of the IEEE’s Standards Board embraced this advice. It appointed an ad hoc committee that drafted proposed amendments to the IEEE’s bylaws that mirrored Ms. Hesse’s recommendations. In the words of the IEEE’s outside counsel, the IEEE’s amendments would “provide greater clarity on issues that have divided SEP owners and standards implementers in recent years.”