The International Trade Administration (ITA), The National Institute of Standards and Technology (NIST) and The United States Patent and Trademark Office (USPTO) have asked a dozen questions in their request for public comments on the strategy. I responded with my in-depth submission which can be downloaded, here.
In this, my focus is on technical standards providing interoperability in communications and networking technologies. These have been most significant technically, economically and in improving consumer welfare in the US and globally over several decades. Purely national or geographically limited technical standards might make sense in limited cases for reasons of national security, but there is broad consensus that standardizing globally is most effective and efficient due to economies of scale and the universal interoperability provided. Various “International Standards” have also flourished because, in accordance with World Trade Organisation (WTO) Technical Barriers to Trade (TBT) requirements, these also foster various competing business models. Some industry participants are dependent on generating licensing royalties, others move fast and succeed in downstream product markets by licensing-in standard-essential technologies and incorporating semiconductor chips and other components that already include them. Many other companies have hybrid business models that operate in both ways concurrently.
My responses explain that what is good for International Standard development with Fair, Reasonable and Non-Discriminatory (FRAND) licensing of Standard-Essential Patents (SEPs) is also good for America. The US is the world leader in various advanced technologies — as a technology developer, and as an implementer. For market leaders, more can usually be gained by growing the pie than by simply taking share from others.
The US should promote predictability with legal certainty in institutions and open market processes that have proven successful in the development of International Standards by private sector companies. Intellectual property rights (IPR) policies and legal rulings in foreign jurisdictions are threatening US leadership and development of International Standards overall by eroding and potentially severely undermining the value of patented standard-essential technologies. While these actions might provide some short-term advantage to certain implementers; for example in Asia where the overwhelming majority of consumer electronics products implementing Standard Essential Patents (SEPs) are manufactured, in the medium and long term these policies and rulings impede technical and market developments across the entire ecosystem, and in turn harm consumer welfare.