The interplay between IP rights and competition law in the context of standardization

Abstract

This article attempts to analyse the patent ambush scenario in the context of both competition law and IP rights under US and EC law. The regulators such as the US FTC and European Commission attempt to combat the abuses, however the legal tools available require a very difficult balancing act between patent law (which protects innovation) and competition law (which attempts to hamper abuse of the free market rules). The patent ambush scenario employed within a standard-setting organization poses an important threat of jeopardizing the goals of achieving a common standard. The response to the problem concentrates on ensuring that the rules applicable to standard-setting organizations' members prevent abuse and/or reaching reasonable and non-discriminatory licensing terms to stop deriving undue benefits from proprietary technologies embedded in the standard. As the information exchange technologies become increasingly popular, the need to ensure interoperability between products of different manufacturers employing these technologies becomes crucial for market success. This consequently increases the danger of malignant abuse of co-operation within the standard setting-organizations. The law may need to step in to secure technological progress free of risks such as the patent ambush.