The Innovation Alliance filing supportive of the ALJ and IDCC. I like what they have to say about reverse patent hold up and foreign companies use of US IPR>

• INNOVATION
ALLIANCE
JlmprQving Patent Quality· Promoting fnno\lation
Lisa R. Barton
Acting Secretary
United States International Trade Commission
500 E Street, S. W.
Washington, DC 20436
August 7, 2013
Re: The Innovation Alliance's Response to the Commission's Request for
Written Submissions in Certain Wireless Devices with 3G Capabilities and
Components Thereof, Inv. No. 337-TA-800.
Dear Acting Secretary Barton:
The Innovation Alliance ("IA") respectfully submits these cornn1ents in response to the
Notice of Request for Statements on the Public Interest issued by the United States International
Trade Commission in the matter of Certain Wireless Devices with 3G Capabilities and
Components Thereof, lnv. No. 337-TA-800, on July 10, 2013 (the "Commission Request ').
Introduction to the Innovation Alliance
The IA is a coalition of companies seeking to enhance America's innovation environment
by improving the quality of patents and protecting the integrity of the U.S. patent system. The IA
represents innovators, patent owners, and stakeholders from a diverse range of industries that
believe in the critical importance of maintaining a strong patent system. Many of the lA 's
members also manufacture and/or sell products and services that utilize not only their own
patents, but those of third parties as well. The lA believes in the pro-itmovation and procompetitive
benefits of voluntary standardization efforts and in good faith bilateral negotiation of
licenses and cross-licenses an1ong standardization participants.
The !A's members include several cellular technology pioneers that have contributed key
essential technologies to the development of current standards and that are longstanding
participants in standard setting efforts by the European Telecommunications Standards Institute
("ETSI") and other standard setting bodies. lA companies therefore care deeply about the legal
landscape surrounding patents that are relevant to technical standards and that may be
encumbered by a commitment to license on certain tern1s, such as fair, reasonable and
nondiscriminatory ("FRAND").
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lA's Response
The administrative law judge ("AU") in the above-referenced investigation ("the 800
investigation") recently issued an initial determination finding no violation of Section 337.
Specifically, the AU found the asserted patents to be not infringed and/or invalid. However, in
his Recommended Determination on Remedy and Bonding, the AU advised the Commission to
issue a limited exclusion order in the event the Commission determines that at least one of the
asserted patents is both valid and infringed. The IA respectfully submits these comments in
response to the Commission's notice soliciting comments on the public interest issues raised by
the AU's recommended relief. Despite the Administration 's recent decision to disapprove the
Commission's determination in another matter- a decision with which the IA strongly disagrees
-the IA respectfully urges the Commission to carefully consider the significant pro-consumer
benefits of standardization and the importance of encouraging innovators' voluntary participation
in standard-setting activities. The IA also urges the Commission to be mindful of the significant
negative consequences to our national economy from any decision or policy that encourages
infringing imports.
Availability of an Exclusionary Remedy
On August 3, 2013, the United States Trade Representative ("USTR") disapproved the
Commi sion's determination to issue an exclusion order and cease and desist order in the Matter
of Certain Electronic Devices, Including Wireless Communication Devices, Portable Music and
Data Processing Devices, and Tablet Computers, Investigation No. 337-TA-794 ("the 794
investigation"). While the USTR's letter to the Commission offers no explanation of the rea ons
for the disapproval, the USTR noted that exclusionary relief on the basis of a FRANDencumbered
patent should be available in the circumstances outlined by the Department of
Justice ("DOJ") and United States Patent and Trademark Office ("USPTO") in their "Policy
Statement on Remedies for Standard-Es entia! Patents Subject to Voluntary FRAND
Commitments" ("DOJ-USPTO Policy Statement"). For example, to address "reverse patent
hold-up", the DOJ-USPTO Policy Statement explain that an exclusionary remedy should be
available when a potential licensee refuses to engage in a negotiation to determine FRAND
terms, such as by insisting on terms clearly outside the bounds of what could reasonably be
considered to be FRAND terms in an attempt to evade the potential licensee's obligation to fairly
compensate the patent holder. To facilitate this analysis, the USTR has recommended that in
future cases the Commission develop a comprehensive factual record related to such issues.
The lA respectfully urges the Commission to carefully consider the vast record that has
already been developed in the 800 investigation when con idering the circumstances for
exclusionary remedies outlined in the DOJ-USPTO Policy Statement. On the issue of FRAND,
the lA understands that the current record includes multiple fact and expert witnesses, and a
substantial amount of briefing. Indeed, based on this record, the AU has already found that the
complainant negotiated in good faith and did not breach any obligations to grant licenses on
FRAND terms. The Commission can equally look to this record when considering the issue of
"reverse patent hold-up."
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Accordingly, the lA respectfully urges the Commission to use the comprehensive record
in this investigation to further develop the jurisprudence surrounding the DOJ-USPTO Policy
Statement and to make findings related to the presence or absence of patent hold-up or reverse
hold-up with respect to any patents that are subject to a standards-based FRAND licensing
obligation.
Enforceable Intellectual Property Rights are Vital to an Innovation-Based Economy
Protecting American intellectual property rights is vital to our national economy,
regardless of whether those rights implicate technical standards or not. The export of technology
is one of the few areas in which the U.S. maintains a trade surplus. The best way to continue
encouraging investment in innovation and technology development is to protect valid intellectual
property rights from infringement by others, particularly foreign-based manufacturers who
operate in exporting countries that do not have an established culture of respect for intellectual
property. Denying protection against infringing imports would not only undermine U.S. policies
designed to encourage investment in our economy by giving importers an excuse to ignore U.S.
trade laws, it would also embolden other countries to continue pursuing, or worse enact, policies
intended to undermine the intellectual property rights of others abroad.
Conclusion
For at least these reasons, when considering the AU's Recommended Determination in
this investigation, the lA respectfully urges the Commission to fully consider the significant proeconomic
and pro-consumer benefits that derive from vigorous patent protection and from robust
participation in standards.
0~R
Brian Pomper ~
Executive Director
The Innovation Alliance