Patent ambush

A patent ambush occurs when a member of a standard-setting organization, while participating in development and setting a standard, withholds information about a patent that they or their company owns, has pending, or intends to file (and which is relevant to the standard), and the company subsequently asserts that it is infringed by use of the standard as adopted. ^{[1] [2]}

Standards-setting organizations, such as the IEEE ^[3] and ANSI, typically require each member of their standard-setting committees to file letters with them that either deny knowledge of company patents that are relevant to the standard, or identify the patents they do know about. When an organization is advised of relevant patents, it will often either seek to use a different technology for the standard, or obtain a commitment from the patent owner that it will license users of the standard on fair reasonable and non-discriminatory (FRAND) terms.

Once the proposed standard has been adopted, companies wishing to implement the standard may be forced to pay substantial royalties to the patent holder, ^[1] creating barriers to entry that distort competition within the market. ^[4] Consequently, the practice has been considered to be in breach of antitrust or competition law in the United States ^[5] and the European Union ^[2] and has resulted in several lawsuits and other actions.

In the United States, a patent ambush may involve the filing of a continuation application with claims targeting a standard ^[6] or the exploitation of a submarine patent, that is, a patent application which has been filed but has not yet been made public years after the filing. ^[7]

See also

• Essential patent, a patent which is essential for implementing e.g. a standard
• Patent misuse
• Patent thicket

References

1. "Telecom standards face patent ambush threat". ZDNet. 2005-06-15. Archived from the original on 2007-09-30. Retrieved 2007-08-30.
2. "Antitrust: Commission confirms sending a Statement of Objections to Rambus". European Commission. 2007-08-23. Retrieved 2007-08-30.
3. See IEEE Standards Association
4. Matt Whipp (2005-12-12). "EC thwarts 'patent ambush' tactics". PC Pro. Archived from the original on 2013-12-02. Retrieved 2013-11-23.
5. See, for example, FTC Challenges Patent Holder's Refusal to Meet Commitment to License Patents Covering 'Ethernet' Standard Used in Virtually All Personal Computers in U.S. (FTC press release about its suit against N-Data, 23 Jan. 2008); FTC Charges Unocal with Anticompetitive Conduct Related to Reformulated Gasoline: Complaint Alleges Company Gained Monopoly Power by Defrauding the California Air Resources Board and Industry Groups During Phase 2 Gasoline Rulemaking Archived 2009-01-19 at the Wayback Machine (FTC press release about its suit against Union Oil Co., 4 March 2003). See also Broadcom Corp. v. Qualcomm Inc. Archived 2010-10-11 at the Wayback Machine (4 Sept. 2007 opinion of Third Circuit holding that deceptive conduct in the standard-setting process can constitute actual or attempted monopolization).
6. Herbert J. Hovenkamp, Patent Continuations, Patent Deception, and Standard Setting: the Rambus and Broadcom decisions, University of Iowa Legal Studies Research Paper (June 2008), page 6, first paragraph.
7. Stacy Baird, "The Government at the Standards Bazaar", 18 Stanford Law & Policy Rev. 35, 82 n.138 (2007) (noting that "the risks of assault on a standards-setting proceeding are most notably that of the imposition of a "submarine patent" or of patent royalty "hold up" risks".

Further reading

• Brian Dean Abramson, "The patent ambush: misuse or caveat emptor?, IDEA: The Intellectual Property Law Review , Vol. 51 No. 1, 2011, pp. 71-109.