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McKool Smith principal Nick Matich shared his opinion in IPWatchdog on Department of Justice (DOJ)’s antitrust department requesting public comment on a new iteration of the Joint DOJ-USPTO-NIST Policy Statement on Remedies for Standards-Essential Patents (SEP) Subject to Voluntary FRAND Commitments. Nick said, “We need a balanced SEP system that allows manufacturers to come to market with products at predictable royalty rates while fairly compensating innovators who build the technologies and standards that make the products possible. As a theoretical matter, hold up and hold out are both possible. The question for policy makers is which is more likely to cause harm in the current environment. The draft statement would be better if it acknowledged that hold out is currently the greater danger. Implementers currently perceive that the worst that can happen to them in litigation is that they have to pay the SEP owners’ initial ask. Therefore, the best business strategy is to string out negotiations and litigation to avoid paying. The draft partly acknowledges this by pointing to the possibility of enhanced damages. But enhanced damages are difficult to get and often modest. Injunctions in SEP cases should be rare, but if they are perceived to be virtually impossible to get—as they currently are—then bad incentives will lead to inefficient licensing markets. The result will be undercompensated inventors and damaged U.S, competitiveness.” Read the article here.

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