This is a follow-up to last month's post on an open letter that 77 former government officials and professors (of law, economics, and business) sent Assistant Attorney General Makan Delrahim in order to remind him of long-standing and consistent U.S. policies on standard-essential patents (SEP) under both Republican and Democratic administrations. I've meanwhile become aware of the AAG's reply, which does not provide any indication that he's on the side of innovation and fair competition.
To his response, Mr. Delrahim attached a letter dated February 13, 2018 from about a dozen academics and former government officials that support the statements he makes, which he describes as "the United States' policies" (we'll talk about that further below). With the greatest respect for those individuals, they do not collectively counterbalance the 77 signatories of the letter that criticized Mr. Delrahim's statements. That's not just a matter of numbers: for an example, there is no former FTC chairman among them.
Also, before the academics' February letter, there was a very impressive industry letter to AAG Delrahim in January, signed by industry bodies such as CCIA, the Fair Standards Alliance, the Software & Information Industry Association (SIAA), and ACT | The App Association, but also by major tech companies such as Apple, Intel, Microsoft, Samsung, HP, Dell, and Cisco. It's very hard to understand why neither of those letters appears to have given AAG Delrahim pause. Does he seriously think he can make his contribution to #MAGA by acting against the likes of Apple, Intel, HP, and Microsoft--and trade organizations that have such companies as Google among their membership?
There's one little passage in Mr. Delrahim's response to the professors and former government officials that strikes me as being hostile in a way that isn't particularly subtle: "[...] we are happy to receive your or your clients' views [...]" (emphasis added)
The 77 signatories wrote him in their own names, not on behalf of clients. Just like I could cite examples of signatories of the other (anti-FRAND) letter who have attorney-client relationships with certain organizations, that may very well also apply to some of the 77 FRAND defenders. However, the FRAND cause really does get a lot of support from competent people who simply understand the devastating impact on innovation and competition that standard-essential patents (SEP) abuse has. The cause is so strong and important that many thought leaders are glad to defend it without anyone paying them for it.
In general, one of the things I like about President Trump and his administration is that they speak out without too much constraint from traditional, conventional etiquette (including, but not limited to, political correctness). It's important to be open and direct. However, in AAG Delrahim's case I'm afraid that his thinking (that anyone who disagrees with him likely does it because he's retained by someone) makes it even harder to help him understand the real issues. He appears to genuinely believe that holdout (companies not paying license fees they owe) is a bigger problem than holdup (SEPs being used as "one bullet to kill"). That's unsupported by any evidence. It would obviously be inappropriate, regardless of his gratuitous reference to the signatories' "clients," to suspect some kind of conspiracy between him and the enemies of FRAND access to industry standards, but according to Wikipedia, Qualcomm is one of his former clients.
What's way more important than present or past, disclosed or undisclosed, existing or imaginary attorney-client relationships is what the law says. Further above I mentioned that he refers to his outlier positions as "the United States' policies." With the greatest respect for the Department of Justice and its officials (though the DoJ has, to the best of my knowledge, never been under even a fraction of this much fire from the White House), "the United States' policies" on antitrust were never made by the DoJ's related division. There's also the Federal Trade Commission (FTC), but above all, let's not forget about the judges.
An article (PDF) written by two Washington, DC-based antitrust lawyers, Orrick Herrington Sutcliffe's John "Jay" Jurata, Jr. and Emily Luken, for the Global Competition Review explains that Mr. Delrahim's positions "lack legal support" and are simply "out of sync with a large and growing body of US case law" on such issues as injunctive relief and FRAND royalty rates. As a tech litigation watcher I couldn't agree more.
Share with other professionals via LinkedIn:
