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Issue 4 | October 23, 2001
Set A Standard - Still Keep Your Patents

Disclose Patents and Published Applications to Standards-Setting Organizations in Which Your Company Participates

According to media sources, the Federal Trade Commission ("FTC") is currently investigating whether several companies may have violated antitrust law by encouraging various standards-setting organizations to adopt patented technologies without disclosing their patent rights to those organizations. Public statements by the FTC and its former officials have noted that the applicable enforcement standard from In re Dell Computer Corp., 121 FTC 616 (1996), does not create a general obligation to search for, or disclose, pertinent intellectual property rights to organizations without a policy on such matters. However, according to former Chairman Robert Pitofsky, the decision in Dell was aimed at merely protecting the integrity of the private standard setting process, rather than the rights of accused infringers. Thus, patent owners may still have a general duty of disclosure under the defensive Doctrine of Equitable Estoppel. Here are some guidelines for meeting these obligations without incurring significant commercial risk.

For issued patents, the commercial risks associated with disclosure are minimal when compared to the legal risk of an undisclosed patent being unenforceable. Therefore, if a standards-setting organization in which your company participates has a patent disclosure policy, then you should follow it (or withdraw from the organization and start your own). If the organization's patent disclosure policy is unclear or nonexistent, then it is best to err on the side of caution by disclosing as much as possible about potentially relevant patents, as early in the standards-settings process as possible.

For pending patent applications, an the other hand, the uncertain state of the law and vagueness of some standards-setting organization's intellectual property disclosure policies make it more difficult to establish clear guidelines. There are also certain procedural risks associated with disclosing a patent application to a competitor, such as protests, interferences, and public use proceedings, that will depend upon whether the application has been formally published by the Patent Office.

Nonetheless, any patent that covers a widely-accepted industry standard is likely to be closely scrutinized by competitors with respect to prior art and inventorship before any licenses are negotiated. Consequently, besides starting the clock on provisional remedies, providing actual notice of published applications to competitors may help to identify any weaknesses that can then be addressed early in the prosecution history, when the remedial costs are likely to be at their lowest. While these same principles would also apply to the disclosure of unpublished applications, the loss of eighteen months of trade secret protection will, in many instances, tip the analysis in favor of nondisclosure and/or withdrawal from participation in the standards-setting organization.

To discuss this topic further, please contact the author, Bill Heinze, bill.heinze@tkhr.com at Thomas, Kayden, Horstemeyer & Risley.

The information contained in this e-mail is provided for informational purposes only and does not represent legal advice. Neither the APLF nor the author intends to create an attorney client relationship by providing this information to you through this message.


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