Learning from Rambus —How to Tame Those Troublesome Trolls

Abstract

The debate over using antitrust enforcement to prevent patent hold-up remains unresolved. The U.S. Court of Appeals muddied the waters in Rambus, and the European Commission decision clarified only little. The Broadcom v. Qualcomm case offers mere ad hoc solutions for standard setting, leaving trolls untroubled. We suggest a return to fundamentals. “Skillful silence” to lure an industry into a lock-in, creating opportunities for hold-up to extract unfair royalties, serves no procompetitive purpose and is not “competition on the merits.” Antitrust law itself should in certain cases create a “duty to alert” manufacturers to patents that are not subject to a promise to license on FRAND terms (or a ban on concealing them). Excessive pricing after hold-up could also be curbed under Article 102(a) TFEU and in certain cases under section 5 of the U.S. FTC Act, limiting patent damages to ex ante value of the technology. This would untether the law from the particular context of SSOs, addressing hold-up more completely and uniformly.