A patent ambush occurs when a member of a standard-setting organization withholds information, during participation in development and setting a standard, about a patent that the member or the member's company owns, has pending, or intends to file, which is relevant to the standard, and subsequently the company asserts that a patent is infringed by use of the standard as adopted.12
Standards-setting organizations, such as the IEEE3 and ANSI, typically require each member of their committees engaged in standard setting to file a letter with the organization stating either that the member does not know of any patents of their company relevant to the standard or else identifying those patents about which they know. When the organization is advised of relevant patents, often it will either seek to use a different technology for the standard or obtain a commitment from the patent owner that it will license users of the standard on reasonable and non-discriminatory (RAND) terms.
Once the proposed standard has been adopted, companies wishing to implement the standard may be forced to pay substantial royalties to the patent holder,1 creating barriers to entry that distort competition within the market.4 Consequently, the practice has been considered to be in breach of antitrust or competition law in the United States5 and the European Union2 and has resulted in several lawsuits and other actions.
In the United States, a patent ambush may involve the filing of a continuation application with claims targeting a standard6 or the exploitation of a submarine patent, that is, a patent application which has been filed but has not yet been made public years after the filing.7need quotation to verify
- Essential patent, a patent which is essential for implementing e.g. a standard
- Patent misuse
- Patent thicket
- "Telecom standards face patent ambush threat". ZDNet. 2005-06-15. Retrieved 2007-08-30.
- "Antitrust: Commission confirms sending a Statement of Objections to Rambus". European Commission. 2007-08-23. Retrieved 2007-08-30.
- See IEEE Standards Association
- "EC thwarts 'patent ambush' tactics". MacUser. 2005-12-12. Archived from the original on 2007-09-28. Retrieved 2007-08-30.
- See, for example, FTC Challenges Patent Holder's Refusal to Meet Commitment to License Patents Covering 'Ethernet' Standard Used in Virtually All Personal Computers in U.S. (FTC press release about its suit against N-Data, 23 Jan. 2008); FTC Charges Unocal with Anticompetitive Conduct Related to Reformulated Gasoline: Complaint Alleges Company Gained Monopoly Power by Defrauding the California Air Resources Board and Industry Groups During Phase 2 Gasoline Rulemaking (FTC press release about its suit against Union Oil Co., 4 March 2003). See also Broadcom Corp. v. Qualcomm Inc. (4 Sept. 2007 opinion of Third Circuit holding that deceptive conduct in the standard-setting process can constitute actual or attempted monopolization).
- Herbert J. Hovenkamp, Patent Continuations, Patent Deception, and Standard Setting: the Rambus and Broadcom decisions, University of Iowa Legal Studies Research Paper (June 2008), page 6, first paragraph.
- Stacy Baird, "The Government at the Standards Bazaar", 18 Stanford Law & Policy Rev. 35, 82 n.138 (2007) (noting that "the risks of assault on a standards-setting proceeding are most notably that of the imposition of a "submarine patent" or of patent royalty "hold up" risks".
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