SEP Antitrust Analysis — More Complex Than It Seems

December 2012
Donald Martin, PhD

In its recent decision allowing the Bosch acquisition of SPX, the FTC, in part, conditioned approval of the deal on Bosch’s agreement that it would not attempt to enforce its standard-essential patents (SEPs) by way of court-imposed injunctions (including at the ITC) against alleged infringers. This pre-condition reflects the FTC’s conviction that SEPs endow patent holders with potential market power (as they lock-in licensees) and that injunctions levied against alleged infringers serve anticompetitive purposes by either excluding (or threatening to exclude) competition from the relevant market or extorting excessive royalties in settlement (known as “Hold-up”).

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