Patents and Industry Standards
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Patents and Industry Standards

Jae Hun Park

This insightful book reviews the inherent conflict between patent rights and industry standards and through analysis of both US and European case law proposes measures to improve current systems and foster greater innovation.
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Chapter 3: Patents and Standards in the US

Jae Hun Park


THE LEGAL ISSUES Patent rights, which are granted by statutory patent law, are exclusive rights and thus the patent holders are entitled to exclusive control of the patented subject matters. Patent owners have the right to refuse to deal or refuse to grant access to the patented technologies. However, it may be undesirable to allow the patent holders who have the patents covering industry standards to enjoy absolute exclusivity because they may use the rights for anticompetitive purposes or to impede technical innovation. A company cannot compete in a network market without access to standards and thus the absolute exclusivity of patents covering standards may exclude all the competition in the market, increasing social costs arising from patent systems. Likewise, the legal issues concerning the patent rights and standards in network industries arise in those cases where the owners of patents which have become industry standards refuse to license the patents to those who wish to offer interoperable products or services. Where third parties cannot access the patented technology essential to enter the market because the patent holders do not allow them to do so, the third parties may turn to antitrust law to gain access to the proprietary technology because antitrust liability may grant a compulsory licence. It is here that tension exists between patent law and antitrust law concerning the extent to which the antitrust law limits the exclusive rights of patent holders. Indeed, standards and standardisations involve the complex interactions of antitrust law and patent law and...

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