Brief Of Amicus Curiae Law And Economics Scholars In Support Of Petition For Rehearing En Banc in Continental v. Avanci (5th Cir. 2022)

Technical interoperability standards that are broadly adopted offer substantial benefits to technology markets. Many standards-setting organizations (SSOs) seek to ensure the broadest possible adoption of their standards by imposing “fair, reasonable and nondiscriminatory” (FRAND) licensing commitments on their members. These commitments ensure that holders of patents essential to a standard (standards-essential patents or SEPs) authorize all potential implementers of the standard to practice those SEPs on FRAND terms.

Under Fifth Circuit precedent, recognized in sister circuits, Plaintiff-Appellant is an intended third party beneficiary of the FRAND commitments that patent-holding defendants have made to the relevant SSOs. In holding that Plaintiff-Appellant lacks Article III standing to bring its claims, the panel relied on several erroneous assumptions that the evidentiary record does not support and which contradict this Court’s precedent and the holdings of sister circuits. More important, the panel’s error may have severe consequences for markets that rely on standardized products.

The panel’s refusal to give Plaintiff-Appellant its day in court is likely to have the following severe consequences for markets that rely on standardized products:
• It eviscerates the FRAND commitments that are intended to assure broad access to standardized technologies,
• It is likely to deter entry and reduce competition in markets for standardized components; and
• It will limit the supply options of end product manufacturers (OEMs), particularly from entrants that have not yet entered into SEP licensing agreements themselves.

These results, taken together, are likely to hinder the dissemination and utilization of standardized products in the relevant market, leading to less choice, higher prices, and a reduction in consumer welfare.

Keywords: standards, FRAND, licensing, patent, standing, SSO, antitrust

Suggested Citation: Suggested Citation

Contreras, Jorge L. and Carrier, Michael A. and Chao, Bernard H. and Chin, Andrew and Hovenkamp, Erik and Lemley, Mark A. and Love, Brian J. and Melamed, Doug and Rub, Guy and Sarnoff, Joshua D. and Semeraro, Steven and Simcoe, Timothy S. and Xiang, Joy, Brief Of Amicus Curiae Law And Economics Scholars In Support Of Petition For Rehearing En Banc in Continental v. Avanci (5th Cir. 2022) (April 19, 2022). Santa Clara Univ. Legal Studies Research Paper , Available at SSRN: https://ssrn.com/abstract=4090051 or http://dx.doi.org/10.2139/ssrn.4090051