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DOJ downgrades Delrahim letter to IEEE on standard-essential patents: inter-agency rapprochement with FTC on SEP enforcement?

The language of diplomacy and other governmental communications is very nuanced, like the British Queen’s spokespersons saying she’s “not amused” when she’s actually outraged. The Antitrust Division of the United States Department of Justice (“DOJ-ATR”) has taken this concept to a higher level. In what could be described as a digital form of body language, the Biden Administration’s DOJ has unequivocally dissociated itself from the Trump Administration’s position on standard-essential patent (SEP) enforcement without saying or writing a single word: just by relegating a link to a document (with the PDF remaining in the same place as before) to a long list of links that is, for the most part, merely an archive. Parts of that archive are little more than the dustbin of DOJ-ATR history.

Look at it this way: if a colleague of yours had a picture of her sweetheart on his desk, but all of a sudden decided to put it into a dark storage room, wouldn’t that tell you something?

On September 10, 2020, less than two months before the election Donald Trump lost, Qualcomm-aligned Antitrust Assistant Attorney General Makan Delrahim tried to use his remaining time in office–he was going to leave anyway, and he knew what the polls said–tried to deal one final blow to net licensees of SEPs. He supplemented, updated, and appended the DOJ-ATR’s 2015 Business Review Letter (BRL) to the Institute of Electrical and Electronics Engineers (IEEE). An IEEE standard all of us use in our everyday lives is WiFi (IEEE 802.11). IEEE has been a strategically important forum at the forefront of how standard-setting organizations could set more specific rules governing SEP enforcement than, for example, ETSI, whose FRAND pledges (which must be interpreted under French law wherever in the world they are enforced) come with a lack of clarity that is fully intended (though some interpretations are still clearly less reasonable than others).

Mr. Delrahim’s BRL 2.0 was meant to make the IEEE change course by giving companies like Qualcomm–which in all fairness is a tremendous WiFi innovator–ammunition for IEEE-internal discussions. Qualcomm executives publicly predicted on various occasions that the IEEE was going to make its rules more patentee-friendly under pressure from the federal government. Last month, MLex’s Khushita Vasant reported on a recent clash between Qualcomm, Apple, Huawei, and other companies at an IEEE patent policy meeting. It was a clash between the progressives like Apple–who wanted to continue on the path of setting implementer-friendly rules–and those seeking a revision, led by Qualcomm.

What I mentioned at the start of this post obviously doesn’t apply to the Trump Administration. Mr. Delrahim’s letter to IEEE suggested that the Obama Administration’s 2015 BRL to IEEE had been misinterpreted. But Mr. Delrahim also disparaged his predecessor’s work by claiming that “[t]he Department’s assessment in 2015 of the ‘direction’ of U.S. law interpreting FRAND commitments on royalty rates and damages assessments was not well-supported and has not proven accurate.”

In late March, I was wondering whether the DOJ and the FTC would continue to fundamentally disagree on the application of antitrust law to SEP abuse, given that the FTC didn’t seek a Supreme Court review of the Ninth Circuit’s FTC v. Qualcomm ruling and mentioned its coordination with the DOJ. But that was just a question, not speculation. Also, the Solicitor General would have had to represent the FTC before the Supreme court, not DOJ-ATR.

Apparently, the Biden Administration is inclined to undo at least some of Mr. Delrahim’s SEP policy initiatives. The full extent will become clearer with time. But it’s already certain that change has come to DOJ-ATR.

Currently, DOJ-ATR is being run by Acting Assistant Attorney General Richard Powers. Just like we’ve recently seen quadruple-antisuit injunctions, which I abbreviate as A4SIs and others as AAAASIs, Mr. Powers has a quadruple-A title: he’s the Antitrust Acting Assistant Attorney General. What an alphabet soup.

Mr. Powers could have done his own “update” to the 2020 Delrahim letter. That update could simply have stated that the 2020 letter was an aberration, and the 2015 letter was in full force and effect again. But doing so would have required a communication style closer to that of the Trump Administration.

That’s where the hierarchical structure of the DOJ-ATR website came in handy. There’s one section where one can find the currently valid BRLs. On that one, Mr. Delrahim’s letter has been silently removed. His letter to the Avanci patent pool is still there, and it remains to be seen what–if anything–will change in that context. But the 2020 IEEE letter is no longer there. The 2015 BRL to IEEE can still be found on that page. That makes it the one that currently counts.

The original and now-restored BRL tends to strengthen those favoring component-level SEP licensing.

The Delrahim letter to IEEE is now on the page listing “comments to state and other organizations”. That page is hidden deep down in the hierarchical structure of the DOJ-ATR website. The dark storage room I mentioned further above.

This move has been clearly interpreted by the tech industry. Cisco’s Senior Director, Antitrust and Competition, Gil Ohana, replied to a tweet of mine that this marked the “end of an error”:

A nice wordplay. Few people in California would refer to the Trump years as an “era” not only because #45’s reelection bid failed but also for substantive reasons.

But let’s also be realistic that there’ll be a lof of wrangling over SEP issue now. The downgrade of the Delrahim letter to IEEE is a significant first step.

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