One of the most significant challenges facing competition policy today is defining the appropriate role of antitrust law within the context of intellectual property right licensing by standard-setting organizations (“SSOs”).  Many commentators believe it is necessary to apply the full force of the antitrust laws, and sometimes special rules that would increase the scope of antitrust, to the standard-setting process in order to adequately oversee what they perceive as a unique opportunity for anticompetitive behavior.  Indeed, antitrust agencies both in the United States and around the world have expressed agreement with the notion that the standard setting process requires strong enforcement of antitrust liability rules in order to ensure efficient outcomes that benefit consumers.  However, this view largely fails to consider the costs of antitrust.  In particular, it fails to recognize the limits of antitrust when the marginal benefit of antitrust enforcement is slight and the potential for erroneous enforcement (“false positives”) and thus, the likelihood that procompetitive behavior will be deterred, is high.  The Supreme Court itself has emphasized repeatedly that the scope of the antitrust laws should be responsive to such a cost-benefit analysis.
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It has been almost 15 years since the Dell consent decree placed firms on notice regarding their obligations to  disclose essential patents in the standard setting process. In the wake of Dell, there has been a huge surge in IPR disclosures. But it is does not seem that all of this disclosure has resolved the uncertainty surrounding IPR in standards. Since Dell, there have been controversies over: what types of IP must be disclosed, and at what stage of the standards process (Rambus); whether commitments are binding on subsequent patent owners (N-Data); and what is meant by a promise to license on Fair Reasonable and Non-Discriminatory terms (Qualcomm).
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Competition agencies on both sides of the Atlantic have been keen to pursue cases on IPR licensing in standard setting.  In the United States, it is the Federal Trade Commission leading the charge, with the Dell Corporation decision in 1996, the Union Oil Company of California (Unocal) consent order in 2005, the Negotiated Data (N-Data) settlement of 2008, and the long but ultimately unsuccessful Rambus case that came to a close just this year. In Europe, the European Commission also investigated Rambus, picking up the strands laid out by the FTC and reaching a tentative settlement in June of this year. The EC also opened a formal investigation of Qualcomm in 2007 (after two years of “informal” investigation). And at least one European member state has entered the fray, albeit at the court level rather than at the level of the national competition authority, with the IP-Com v. Nokia litigation in Germany.
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