David Cohen was admitted to practice in New York in 1999. He is also admitted to practice in New Jersey the District of Columbia and before the USPTO. His experience includes strategic litigation planning; global project management; patent monetization; FRAND licensing; legal and IP department development and management; patent licensing and negotiations; global anti-trust; strategic patent portfolio development and acquisition; and IT needs strategy & design.
Last summer, I lamented how the Department of Justice – Antitrust Division (DOJ), without Senate confirmed leadership, was hastily pushing through policies that augmented the already-enormous power of Big Tech and benefitted China’s interests. Similarly, I uncovered how the App Association, a Big Tech-funded advocacy organization masquerading as a group of small app developers, was able to trick the Federal Trade Commission (FTC) into inviting it to speak at its July 2021 Commission meeting alongside legitimate small businesses. This is the same association that supported Apple in its litigation against (real) app developers, issued a June 2021 press release against the House bills aimed at regulating Big Tech, and misses no opportunity to support Big Tech interests.
Historically an esoteric area of law, in recent years, antitrust policy is drawing broader attention as a tool to curb the exercise of monopolistic market power, especially by big tech behemoths. Congressional reports on both Democratic and Republican sides of the aisle, multiple legislative initiatives to reform U.S. antitrust law, and a recent book by Senator Amy Klobuchar (D-MN), Chair of the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights, are some indicators of this trend. Along these lines, broad outcry broke out against rumored Department of Justice (DOJ) Antitrust Division leadership appointments of candidates representing big tech interests, such as Karen Dunn (Apple, Amazon), Renata Hesse (Google, Amazon), Susan Davies (Facebook), and against Deputy Attorney General Lisa Monaco’s (Apple, Google) involvement in deliberations over the nomination of a DOJ Assistant Attorney General (AAG) for Antitrust.
As I noted in part one of my talk at the IPWatchdog Patent Masters Symposium, the validity statistics for SEPs do not look very good at first glance. Thus, according to a 2017 PricewaterhouseCoopers study, plaintiffs in U.S. courts (ignoring patent type) have on average a 33% chance of success—only a 27% chance in the case of telecommunications patents. This chance of success is probably overstated for Standard Essential Patents (SEPs), based on the easy availability of prior art. Indeed, according to RPX’s 2014 study, in the United States, SEPs are likely to be less than half as successful as non-SEPs.In my talk, I pointed to the high invalidation rates in Europe to buttress my point that, at first glance, SEPs seem particularly vulnerable to validity challenges. Thus, in Germany, a supposed nirvana for patent assertion, the authors of the study “Patent Paper Tigers” reviewed the case law of the German Federal Patent Court and the German Federal Court of Justice in nullity matters in the period from 2010 to 2013 and found that: The nullification rate of all Senates of the German Federal Patent Court is 79.08% in total; and the nullification rate at the German Federal Patent Court regarding Software and Telecom patents which are (currently) of particular relevance from an economic point of view is 88.11%. Returning to the point made in the first part of my talk, having noted that most SEP nullification comes from obviousness, and not novelty, there should be no public interest exception to my argument that: unprovoked—that is, without first having made a FRAND offer or counteroffer—serial nullification of SEPs is contrary to the duty to negotiate in good faith and should remove a party’s defense against an injunction to SEPs.
Now, there is a flaw in this theory, and that is that, in the past few years, third parties have emerged that will—for their members or other contracted entities—kill patents.
Standards-declared patents have been challenged in ex parte and post-grant review for years as part of enforcement efforts and other strategies, though the volume of patents declared essential and their largely unlitigated status has limited the appeal of post-grant challenges against them. One such standard, High-Efficiency Video Coding (HEVC), promises to be the successor to the current H.264 standard used by most streaming visual media. As all parties seek to clear risk and license as they implement, developing patent pools have been utilizing new strategies for licensing standard-declared patents. Recently, Unified Patents launched an HEVC zone aimed at encouraging adoption and shedding light on the standard-essential patent (SEP) landscape, and has conducted damages studies, landscape models, and analysis of the patent landscape around the HEVC standard. As part of those efforts, Unified has been challenging patents related to the standard. To date, only a handful of litigations have been filed related to HEVC patents.