Academic journal article Harvard Journal of Law & Technology

From Private Ordering to Public Law: The Legal Frameworks Governing Standards-Essential Patents

Academic journal article Harvard Journal of Law & Technology

From Private Ordering to Public Law: The Legal Frameworks Governing Standards-Essential Patents

Article excerpt

TABLE OF CONTENTS     I. INTRODUCTION   II. PRIVATE ORDERING  III. PRIVATE ORDERING AND TECHNICAL STANDARDIZATION   IV. SDO DUE PROCESS AND PATENTS    V. FROM PRIVATE ORDERING TO PRIVATE LAW   VI. THE PUBLIC CHARACTER OF STANDARD SETTING       A. Historical Roots       B. Network Effects and Benefits       C. Today: Standards as Public Goods?  VII. THE PUBLIC INTEREST AND INJUNCTIVE RELIEF VIII. THE PUBLIC-PRIVATE DIVIDE AND ENFORCEMENT OF       SDO COMMITMENTS   IX. ANOTHER VIEW OF PUBLIC LAW FOR STANDARDS       Essential Patents    X. CONCLUSION 

I. INTRODUCTION

Technical interoperability standards such as Wi-Fi, Bluetooth, HTML, and 3G/4G enable smartphones, computers, game players, and other products manufactured by different vendors to communicate and operate within the modern networked infrastructure. The development of these standards, an activity conducted largely within industry associations populated by engineers and product designers, has recently become the subject of considerable legal controversy. In particular, disputes have emerged as private parties have accumulated and asserted patents covering standards against manufacturers of standardized products. This litigation has attracted the attention of antitrust and competition authorities worldwide, and efforts are under way to address perceived abuses of the standardization process through enforcement actions and new governmental regulations. But beneath the myriad doctrinal and economic issues raised by these efforts lies a more fundamental question regarding the appropriateness of governmental action to regulate what could be described as a private activity, though one with potentially significant effects on global product and service markets.

A deep conceptual gulf has emerged between the two camps in this debate. It highlights the basic question whether technical standard setting is best conceptualized as a private activity governed most efficiently by its own internal rules and procedures, or whether it is at root a public activity that should be regulated within the sphere of public law. (1) To a degree, this debate reflects the larger battle being waged today over the nature of patent law and the patent system itself, and whether these are most accurately described as private or public resources. (2)

This Article draws upon recent scholarship, judicial opinions, and agency guidance to frame the debate over the regulation of technical standard setting in terms of private ordering, private law, and public law. The remainder of this Article proceeds as follows: after a general

introduction to private ordering structures in Part II, Parts III and Iv describe how technical standard setting has evolved as a private sector activity. Part V analyzes the incorporation of standards bodies' rules and norms in private law adjudication among market participants. Part VI shifts the focus to the public benefits that standard setting affords and Part VII describes the recent debate regarding public interest considerations relevant to the issuance of injunctions to block the sale of standardized products. Parts VIII and IX look more broadly at the public character of technical standard setting and ask whether public law mechanisms such as antitrust and competition law should regulate this activity. This Article concludes by proposing a preferred legal framework for addressing behavior and commitments within standard-setting bodies.

II. PRIVATE ORDERING

The term "private ordering" refers to the use of rules systems that private actors conceive, observe, and often enforce through extra-legal means. (3) Since Professor Robert Ellickson's landmark study of the unwritten codes that govern cattle ranching in rural California, (4) a sizeable body of legal scholarship has emerged in this area. (5) Commentators have analyzed the private ordering systems of Hassidic diamond wholesalers, (6) Memphis cotton merchants, (7) Japanese organized crime syndicates, (8) the Internet domain name authority ICANN, (9) the New York Stock Exchange, (10) credit rating agencies, (11) and many others. …

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