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Federal Agencies Issue New Draft Policy Statement Regarding Standard Essential Patent Licensing and Remedies, DOJ Seeks Public Comments

On December 6, 2021, the U.S. Department of Justice (“DOJ”) announced a request for public comments on a new “Draft Policy Statement on Licensing Negotiations and Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments” (“Draft Statement”). The Draft Statement is a joint policy statement of the DOJ Antitrust Division, U.S. Patent and Trademark Office (“USPTO”), and National Institute of Standards and Technology (“NIST”), issued in response to President Biden’s July 9, 2021 Executive Order on Promoting Competition in the American Economy. Therein, the President encouraged the Attorney General and the Secretary of Commerce to consider whether to revise the joint DOJ-USPTO-NIST 2019 “Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments” (“2019 Statement”), which, in turn, had replaced a withdrawn 2013 DOJ-USPTO joint policy statement by the same title (“2013 Statement”). All three statements address whether and under what circumstances the owners of standard essential patents (“SEPs”) who agree to license essential technology on fair, reasonable, and non-discriminatory (“FRAND”) terms should be entitled to injunctive relief. The Draft Statement signals a return to the general policy of the 2013 Statement, leaning against the availability of injunctive relief where certain implementers—so called “willing licensees”—agree to take licenses on FRAND terms. The Draft Statement does, however, set out various circumstances in which an implementer who is unwilling to take such a license could face injunctive remedies (or the possibility of enhanced damages for willful infringement).

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Supreme Court Dismisses Closely Watched Patent Case

Time to Read: 1 minutes Practices: Intellectual Property

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On June 22, the U.S. Supreme Court issued a “non-decision” in Laboratory Corporation of America Holdings v. Metabolite Laboratories, a case closely watched by the patent bar. At issue in Metabolite was the patentability of a claim to detecting vitamin deficiencies -- specifically, whether the claim covered unpatentable “natural phenomena.” A majority of the justices dismissed the case on the grounds that the Court had improvidently granted the writ of certiorari because the lower courts had not adequately addressed the issue.

Justice Stephen Breyer dissented, joined by Justice John Paul Stevens and Justice David Souter. In Justice Breyer’s view, the importance of resolving the issue outweighed the benefits of waiting for another case in which the lower courts had more thoroughly addressed the issue. With respect to the merits, Justice Breyer found that the claim at issue, which involved testing blood for presence of a substance and making a correlation with the test result to determine whether a vitamin deficiency exists, covers unpatentable natural phenomena. Justice Breyer acknowledged, however, the difficulty of drawing the line between unpatentable natural phenomena on the one hand, and patentable processes on the other. The dissent strongly suggests that the claim at issue was too broad.

You may expect to see this issue remain a matter of controversy, returning to the Supreme Court’s docket in the not-so-distant future. In the meantime, you may also expect to see lower courts struggle with what amounts to a line-drawing exercise between pure and applied science, or even more broadly, between science and technology. At stake is not only the viability of patents covering medical technologies, but virtually every other technological discipline -- not to mention business method patents.

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