February 7, 2020

The Honorable Makan Delrahim

Assistant Attorney General, Antitrust Division
United States Department of Justice
950 Pennsylvania Avenue, N.W.
Washington, DC 20530

RE: The Antitrust Division’s 2015 Business Review Letter to IEEE-SA

The undersigned members of the antitrust and patent bars, including former Antitrust
Division, Federal Trade Commission, and U.S. Patent and Trademark Office leadership under both
Republican and Democratic administrations, and a former Chief Judge of the U.S. Court of
Appeals for the Federal Circuit, write to you today to urge action with regard to the 2015 Business
Review Letter (“BRL”) written by the Antitrust Division (“Division”) to the Institute of Electrical
and Electronics Engineers Standards Association (“IEEE-SA”).

In 2014, IEEE-SA introduced significant revisions to its patent policy that included, inter
alia, a new definition of “reasonable rate” based on the smallest saleable implementation of a
standard and would severely limit the evidentiary value of comparable licenses. IEEE-SA’s policy
revisions also imposed a near-ban on the availability of injunctions and exclusion orders against
infringement of standard-essential patents (“SEPs”) irrespective of the infringer’s behavior, and a
compulsory license of SEPs to component makers.1 IEEE-SA conditioned adoption of these policy
revisions upon issuance of a positive BRL by the Division.

The extensive nature of IEEE-SA’s proposed policy revisions — unprecedented at other

standards developing organizations2 — has led politicians, policymakers, antitrust experts and
scholars to express serious concerns about their potential negative ramifications for competition,
standard development at IEEE-SA, innovation and U.S. competitiveness. Sen. Chris Coons,3

1 See IEEE-SA, Draft 39 IEEE Standards Board Bylaws § 6.1, at 1 (2014), http://grouper.ieee.org/groups/pp-

dialog/drafts_comments/SBBylaws_100614_redline_current.pdf (redline reflecting the 2015 changes to IEEE-SA policy).

2 For example, consistent with longtime practice in standardization, the three European SDOs have explicitly stayed out

of commercial negotiations of F/RAND rates. See CEN-CENELEC, CEN AND CENELEC POSITION ON STANDARD ESSENTIAL
PATENTS AND FAIR, REASONABLE AND NON-DISCRIMINATORY (FRAND) COMMITMENTS (September 2016),
https://www.cencenelec.eu/News/Policy_Opinions/PolicyOpinions/EssentialPatents.pdf; Sophia Antipolis, ETSI’s Director
General issues public statement on IPR policy, ETSI (Dec. 3, 2018), https://www.etsi.org/newsroom/news/1458-etsi-s-director-
general-issues-public-statement-on-ipr-policy.
3 Letter from Sen. Chris Coons to Eric Holder, U.S. Att’y Gen., and Renata Hesse, Assistant U.S. Att’y Gen. (Jan. 14,

2015), https://www.ipwatchdog.com/materials/1-14-2015-Coons-IEEE.pdf.
former Rep. Lee Terry4 and others5 raised these concerns domestically, and similar worries were
echoed across the Atlantic.6

Despite these cautionary statements, in early 2015, the Antitrust Division issued an
unusually broad and positive BRL to IEEE-SA.7 The BRL went beyond expressing lack of
antitrust enforcement intentions; it was perceived by many as apparently endorsing the proposed
policy changes. For example, the BRL praised the new policy as having “the potential
to . . . facilitate and improve the IEEE-SA standards-setting process,”8 and the related press release
from the Department of Justice stated that it “supports [IEEE-SA]’s efforts to clarify [its] patent
licensing policies.”9

Respected antitrust experts widely criticized the BRL’s analysis. These critics pointed out
its failure to either conduct a complete rule of reason analysis or consider adequately the impact
of IEEE-SA policy changes on hold-out, innovation and dynamic competition.10 Many also raised
the lack of serious consideration of the legality and propriety of the underlying policy development
process.11

4 Lee Terry, Don’t Stop WiFi, THE HILL (Jan. 8, 2015, 2:00 PM), https://thehill.com/blogs/congress-

blog/technology/228817-dont-turn-off-wi-fi.
5 David Long, IEEE’s controversial proposed Intellectual Property Rights (“IPR”) Policy amendments, ESSENTIAL

PATENT BLOG (Feb. 3, 2015), https://www.essentialpatentblog.com/2015/02/ieee/; Adam Mossoff, Reality Check: Weakening
wireless technology patents hurts everyone, RCR WIRELESS NEWS (Jan. 28, 2015),
https://www.rcrwireless.com/20150128/opinion/reality-check-weakening-wireless-technology-patents-hurts-everyone-tag10;
Letter from J. Gregory Sidak, Chairman, Criterion Economics, to Renata Hesse, Deputy Assistant Att’y Gen. (Jan. 28, 2015),
https://www.criterioneconomics.com/docs/proposed_ieee_bylaw_amendments_affecting_frand_licensing_of_seps.pdf.
6 Leah Nylen and Lewis Crofts, EU Warns of Impact of IEEE Patent Policy Change, MLEX (Jan. 27, 2015) (describing

a Jan. 5, 2015 letter from European Commission Director Gerard De Graaf warning that the “change in the IEEE policy . . . may
risk having a significant impact” and calling for the new policy to be “carefully examined” before its adoption).
7 Letter from Renata B. Hesse, Acting Assistant Attorney General, to Michael A. Lindsay, Dorsey & Whitney LLP

(Feb. 2, 2015), https://www.justice.gov/atr/response-institute-electrical-and-electronics-engineers-incorporated.

8 Id.

9 Press Release, Office of Pub. Affairs, US Dep’t of Justice, Department of Justice Will Not Challenge Standards-

Setting Organization’s Proposal to Update Patent Policy (Feb. 2, 2015), http://www.justice.gov/opa/pr/department-justice-will-

not-challenge-standards-setting-organizations-proposal-update-patent.
10 See, e.g., Marco Lo Bue, Are These Cartels? Price Guidelines Adopted by Standard Setting Organisations, 7(8) J. OF

EUR. COMPETITION L. & PRACTICE, 537–43 (2016); Nicolas Petit, The IEEE-SA Revised Patent Policy and Its Definition of
‘Reasonable’ Rates: A Transatlantic Antitrust Divide?, 27 FORDHAM INTELL. PROP., MEDIA & ENTERTAINMENT L.J. 211 (2017); J.
Gregory Sidak, The Antitrust Division’s Devaluation of Standard-Essential Patents, 104 GEO. L.J. ONLINE 48 (2015); Stuart M.
Chemtob, Carte Blanche For SSOs? The Antitrust Division’s Business Review Letter On The IEEE’s Patent Policy Update, 2
COMPETITION POL’Y INT’L ANTITRUST CHRON., March 2015, https://www.wsgr.com/publications/PDFSearch/chemtob-0315.pdf;
Luke Froeb and Mikhael Shor, Innovators, Implementers, and Two-Sided Hold-Up, AM. BAR ASS’N ANTITRUST SOURCE, August
2015, http://www.americanbar.org/content/dam/aba/publishing/antitrust_source/aug15_froeb_7_21f.authcheckdam.pdf; Roy E.
Hoffinger, The 2015 DOJ IEEE Business Review Letter: The Triumph of Industrial Policy Preferences Over Law and Evidence, 2
COMPETITION POL’Y INT’L ANTITRUST CHRON., March 2015,
https://www.competitionpolicyinternational.com/assets/Uploads/HoffingerMar-152.pdf; Hugh M. Hollman, IEEE Business
Review Letter: The DOJ Reveals Its Hand, 2 COMPETITION POL’Y INT’L ANTITRUST CHRON., March 2015,
https://www.competitionpolicyinternational.com/assets/Uploads/HollmanMar-152.pdf; Lisa Kimmel, Standards, Patent Policies,
and Antitrust: A Critique of IEEE-II, AM. BAR ASS’N ANTITRUST MAGAZINE, Summer 2015,
https://www.crowell.com/files/Standards-Patent-Policies-and-Antitrust-A-Critique-of-IEEE-II.pdf.
11 See, e.g., Nicolo Zingales & Olia Kanevskaia, The IEEE-SA patent policy update under the lens of EU competition

law, 12 EUR. COMPETITION J. no. 2–3, 2016, at 195–235; Petit, supra note 10; Sidak, supra note 10; Hoffinger, supra note 10.

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 We understand that some criticisms of IEEE-SA’s new approach to SEPs may reflect a
policy debate and do not base our request for action on relitigating the past. Nevertheless, because
the BRL was based on a rule of reason analysis, the positive outcome hinged on forward-looking
predictions that the new policy would bring about procompetitive benefits such as “clarity” and
“facilitat[ing] and improv[ing] the IEEE-SA standards-setting process.” In light of the subsequent
developments described below, the logical underpinning of the BRL has not stood the test of time
and thus should be repudiated.

The Factual Aftermath of the BRL and 2015 IEEE-SA Patent Policy

The years since the issuance of the BRL have seen the following significant developments,
each of which evidences the effects of the 2015 IEEE-SA patent policy.12

1. Disclosure delays are significant and serious. There have been significant delays in
disclosure of licensing intentions by IEEE-SA participants.13 These delays have resulted in
reduced clarity with respect to the patent landscape surrounding IEEE-SA standards.

2. RAND commitments have waned. Since the adoption of IEEE-SA’s new patent policy, there
has been a record number of negative Letters of Assurance (“LOAs”), which reflect patent
holders’ refusal to give RAND licensing assurances under the new policy. Between January
2016 and June 2019, 77% of LoAs related to WiFi technology have been negative.14
The Division has long praised RAND commitments as a tool to mitigate the potential for hold-
up, and the BRL had predicted that the new IEEE-SA patent policy would “further help to
mitigate hold up.”15 Conversely, the unprecedented proliferation of negative LoAs over the
past few years demonstrates that this stated procompetitive rationale has proven unsupportable.

The BRL endorsed an IEEE-SA policy that has proven out of step with U.S. intellectual
property law and policy. While the BRL characterized the new IEEE-SA policy provisions
as “not out of step with the direction of current U.S. law interpreting RAND” as of 2015, U.S.
case law and administration policy positions in this area since that time have not been
consistent with that anticipated “direction”. For example, in December 2015, the Federal
Circuit rejected the argument that damages models for SEP infringement must begin with the
smallest salable patent-practicing unit methodology, describing that position (a position

12 For a cummulative summary of effects see David L. Cohen, The IEEE Patent Policy – A Natural Experiment in
Devaluing Technology, KIDON IP (Aug. 12, 2019) (“Kidon IP”), https://www.kidonip.com/news/the-ieee-2015-patent-policy-a-
natural-experiment-in-devaluing-technology/.
13 For example, Huawei — one of the most significant contributors to WiFi technology — did not submit any patent

assurances between 2015 and 2019. See Richard Lloyd, Huawei joins IEEE patent refuseniks four years since controversial
policy change, IAM MEDIA (May 17, 2019), https://www.iam-media.com/frandseps/huawei-joins-ieee-patent-refuseniks-four-
years-controversial-policy-change.
14 Kidon IP, supra note 12; Aldrin Brown, No change to IEEE SEP policy planned despite uptick in resistance (PaRR,

Dec. 12, 2019) (“Negative LOAs rose sharply in wake of 2015 policy change, IEEE data shows”).
15 Letter from Renata B. Hesse, supra note 7.

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 mandated by IEEE-SA patent policy) as “untenable” given established precedent.16 Similarly,
IEEE-SA patent policy effectively precludes the potential for injunctive relief for infringement
of an SEP,17 but the Federal Circuit has expressly rejected the creation of a special rule
regarding injunctions for infringement of SEPs.18 The Antitrust Division, U.S. Patent and
Trademark Office and National Instititue of Standards and Technology have described some
of this U.S. law in their recent statement on remedies for standards essential patents.19

3. Inefficiencies observed in IEEE standards development. Engineers working on IEEE-SA’s

flagship WiFi standard have described the effects of the new patent policy as “delay and
chaos,” “loss of momentum,” a “broken” process that “appears to be not enforceable or
implementable,” and as causing “delay in progress.”20

4. IEEE WiFi standard amendments have lost American National Standard-quality

designation. In March 2019, the American National Standards Institute issued two notices of
disapproval for IEEE “WiFi” standard amendments, denying them accreditation as American
National Standards.21 We believe that this disapproval was the result of patent owners refusing
to grant RAND assurances under the new policy. This action is another indication that the
quality of IEEE’s WiFi standards has been impaired, rather than “improved” as the BRL
predicted.

5. The BRL is subject to misrepresentation and misuse in foreign jurisdictions. The BRL
has been repeatedly mispresented overseas, especially in Asia, as expressing U.S. government
support for the new IEEE-SA patent policy,22 or as evidence that the policy’s claimed potential

16 CSIRO v. Cisco Sys., Inc., 809 F.3d 1295, 1303 (Fed. Cir. 2015); see also Memorandum of Findings of Fact and
Conclusions of Law at 10, HTC Corp. et al. v. Telefonaktiebolaget LM Ericsson et al., No. 6:18-cv-00243 (E.D. Tex. May 23,
2019) (No. 538) (“[T]he only reasonable inference to draw from the jury’s verdict is that the jury found HTC’s SSPPU-based
arguments unpersuasive”); id. at 11 (“[T]he market evidence, in the form of comparable licenses, has failed to embrace HTC’s
preferred SSPPU methodology.”); HTC Corp. v. Telefonaktiebolaget LM Ericsson, No. 6:18-cv-00243-JRG at *11 (E.D. Tex.
Jan. 7, 2019) (“[T]he Court finds that the parties to the ETSI IPR policy did not intend to impose a requirement that every
FRAND license must be based on the SSPPU.”).
17 See INST. OF ELECTRICAL & ELECTRONIC ENG’RS, IEEE-SA STANDARDS BOARD BYLAWS § 6.2, at 16 (2015) (stating

that a FRAND commitment “precludes seeking, or seeking to enforce, a Prohibitive Order” except in limited, specific cases that
the IEEE-SA policy identifies).
18 See Ericsson, Inc. v. D-Link Sys., 773 F.3d 1201, 1232 (Fed. Cir. 2014).

19 See U.S. STATEMENT ON REMEDIES FOR STANDARDS-ESSENTIAL PATENTS SUBJECT TO VOLUNTARY F/RAND

COMMITMENTS (Dec. 19, 2019) at https://www.justice.gov/atr/page/file/1228016/download.

20 INST. OF ELECTRICAL & ELECTRONIC ENG’RS, MINUTES (UNCONFIRMED) - IEEE 802 LMSC EXECUTIVE COMMITTEE

MEETING, REVISION 0, (Jan. 22, 2016), http://ieee802.org/minutes/2016_01/2016-01-22-minutes-v0.pdf. Some later demanded

that the text be revised. See INST. OF ELECTRICAL & ELECTRONIC ENG’RS, MINUTES (UNCONFIRMED) - IEEE 802 LMSC
EXECUTIVE COMMITTEE MEETING, REVISION 1, (Jan. 22, 2016), at http://ieee802.org/minutes/2016_01/2016-01-22-minutes-v1.pdf
(later version).
21 AM. NAT’L STDS. INST., Notice of Disapproval, 50 ANSI STANDARDS ACTION no. 9, Mar. 1, 2019, at 15 (“Notice of

Disapproval, IEEE (Institute of Electrical and Electronics Engineers). . . . The requested standards actions listed below have not
been approved by the ANSI Board of Standards Review . . . IEEE 802.11ah . . . IEEE 802.11ai”).
22 See INST. OF ELECTRICAL & ELECTRONIC ENG’RS, [Governance issues at the interface of patents and standards —

What SDOs can do to improve the current situation] (May 4, 2016), at 13, 41-42,
http://standards.ieee.org/develop/policies/white_paper.pdf (IEEE-SA Mandarin language policy paper explaining to Chinese

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 procompetitive effects have been established.23 IEEE-SA officials themselves have used the
BRL to advocate and explain U.S. antitrust law and Antitrust Division positions to China’s
antitrust enforcers.24 Given that the purpose of the 2015 IEEE-SA patent policy could fairly
be described as the devaluation of SEPs, the U.S. government’s “endorsement” of that policy
could only encourage Chinese antitrust enforcers to use their antitrust policy and enforcement
powers to devalue SEPs. Needless to say, any use of the BRL to convey to Chinese officials
that the U.S. government supports IEEE-SA’s policies is inconsistent with the administration’s
efforts to increase China’s respect for intellectual property rights.

6. The potential for confusion regarding the BRL’s “endorsement” of the IEEE patent
policy (as opposed to statement of enforcement intentions) is apparent. At a June 2019
OECD Competition Committee roundtable,25 even a U.S. academic represented the BRL as a
pronouncement of U.S. government support for a prohibition of injunctions as a remedy for
SEP infringement, and support for the 2015 IEEE-SA patent policy.26

Conclusion

A solid body of evidence gathered since 2015 demonstrates that the procompetitive
benefits predicted for the revised IEEE-SA patent policy have not materialized. Instead, the new
policy has resulted in the deterioration of standards development at IEEE-SA, with increased
inefficiencies in the standards development process and a reduction in clarity of RAND assurances
and standard quality. And, regardless of the Division’s intentions at the time of the BRL in 2015,
the seeming “endorsement” of IEEE-SA’s policy has made it apt for misuse with antitrust
enforcers overseas.

Given these developments, we urge you to repudiate the BRL, at least to modify its
predictive language regarding expected procompetitive effects, and to clarify its sole focus on
enforcement intentions.

We believe that such a modification would be consistent with the Information Quality Act
requirement that ensures the quality, objectivity, utility, and integrity of government-provided

readers that in the BRL, the U.S. Department of Justice confirms that the patent policy change is beneficial to competition and
consumers).
23 Advance Technology for Humanity with Greater Clarity in Standards Patent Policy, an Interview with Dr.

Konstantinos Karachalios, 78 CHINA STANDARDIZATION J. no.16 (May/June 2016), at 20.

24 NDRC’s Antitrust Chief Meets with IEEE Director, MLEX (May 17, 2016); China’s NDRC Antitrust Bureau Meets

with Visiting IEEE Delegation, PARR (May 17, 2016). According to a Chinese press release, the Director of NDRC’s Price
Supervision Bureau met with an IEEE delegation led by Konstantinos Karachalios, General Director of IEEE-SA, and Don
Wright, chairman of IEEE-SA’s Patent Committee. 价监局张汉东局长会见电气电子工程师学会首席执行官Karachalios一
行 [Director Zhang Handong of the Price Supervision Bureau met with Karachalios, CEO of the Institute of Electrical and
Electronics Engineers], NETEASE NEWS (May 17, 2016, 2:18 PM),
http://3g.163.com/touch/article.html?docid=BN9A771V00014JB5&qd=pc_adaptation&version=gll.
25 http://www.oecd.org/daf/competition/licensing-of-ip-rights-and-competition-law.htm.

26 According to eyewitnesses in the meeting (note: meeting attendees included the addressee of this letter and Principal

Deputy Assistant Attorney General Andrew Finch, who can independently assess the accuracy of the applicable point).

5
information,27 and as the BRL contains information that has a substantial impact on important
public policies and private sector decisions. Accordingly, we urge you to take action to repudiate
the 2015 BRL, either through revision as described above or through withdrawal of the BRL.

Thank you for your consideration in this matter. We would be happy to discuss with you
further at your convenience.

Sincerely,

/s/ James F. Rill /s/ Christine A. Varney

James F. Rill Christine A. Varney
(DOJ) (DOJ, FTC)

/s/ David J. Kappos /s/ Joshua D. Wright

David J. Kappos Prof. Joshua D. Wright
(USPTO) (FTC)

/s/ Luke M. Froeb /s/ Abbott Lipsky

Prof. Luke M. Froeb Prof. Abbott (Tad) Lipsky
(DOJ, FTC) (DOJ, FTC)

/s/ Paul R. Michel

Chief Judge Paul R. Michel
(U.S. Court of Appeals for the Federal Circuit, Ret.)
 

27 See Information Quality Act, Pub. L. No. 106-554 app. A, 114 Stat. 2763A–70 (2000) (requiring that “each Federal

agency to which the guidelines apply . . . issue guidelines ensuring and maximizing the quality, objectivity, utility, and integrity
of information” it disseminates); id. (further requiring each such agency “establish administrative mechanisms” to allow “persons
to seek and obtain correction of information maintained and disseminated by the agency that does not comply” with such
guidelines).