The Department of Justice and the Patent and Trademark Office are pressing the International Trade Commission (ITC) not to ban imports that use standard-essential patents (SEP) when the manufacturers that are willing to license the necessary patents are accused to infringing them. “[I]n some circumstances,” the agencies argued, “the remedy of an injunction or exclusion order may be inconsistent with the public interest.” The Federal Trade Commission took a similar position in an amicus brief filed last summer.
SEP owners, the DOJ and USPTO argued, have agreed with standard-setting organizations that if their patents are chosen for a standard, then they will license those patents on fair, reasonable and nondiscriminatory (FRAND) terms, at least when the patent is essential to the standardized technology. These patent owners thus should not be allowed to use the threat of an import ban to extract unfairly high royalty rates. Such an order should be reserved for situations in which the user refuses to license the patent on reasonable terms or perhaps where damages would be unavailable to the patent holder.
These lobbying efforts are the result of a shift from federal court to the ITC by patent owners after a 2006 U.S. Supreme Court decision in the E-bay case that made winning injunctions in federal district court more difficult. The ITC, which has no power to award damages, generally issues orders excluding the importation of a produce that infringes a valid and enforceable U.S. patent.