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ANSI Testifies Before FTC and Justice Dept. on Intellectual Property and Competition within Standards Setting Activities

Testimony Stresses Importance of Flexible, Open Process

New York, May 15, 2002

In its testimony before the Federal Trade Commission (FTC) and the Department of Justice (DoJ) last month, the American National Standards Institute (ANSI) advocated maintaining a flexible, open approach to dealing with intellectual property rights issues within the standards-setting community.

During the American Bar Association Antitrust Section Fall Forum last November, FTC chairman, Timothy J. Murris, announced that hearings would take place on this issue. At that time, Chairman Murris indicated "a new initiative by federal authorities to develop a better understanding of how to manage issues at the intersection of competition and intellectual property right law and policy." He revealed that the FTC had investigated anticompetitive issues in standards-setting activities and questioned whether circumstances warranted a reevaluation of the current process with respect to the degree anticompetitive conduct occurs in this arena. He noted the purpose of the hearings would be "to consider the implications of competition and intellectual property law for innovation and other aspects of consumer welfare."

On behalf of the Institute's Patent Group, Amy A. Marasco, ANSI vice-president and general counsel, provided FTC and DoJ officials with an overview of the Institute's Patent Policy, which applies to all American National Standards (ANS). "[The policy] was derived with the objective of finding a balance among intellectual property rights, competing interests in implementing a given standard, the standards-setting milieu, and the avoidance of unnecessary rigidity that may inhibit U.S. competitiveness both nationally and in increasingly global markets."

Ms. Marasco pointed out that the ANSI policy is "self-policing" and has proven effective thus far, "evidenced by the fact that there has not been any adjudicated abuse of the process relating to patents that has occurred in connection with any ANS…Given this track record, delineated, generalized, one-size-fits-all guidelines from the FTC or DoJ do not appear to be needed or warranted; in fact they may very well be counterproductive." She explained that federal guidelines could stifle competition and the standardization of technological advances in the U.S. "Different approaches by different groups with different participants and different objectives provide the necessary flexibility to maximize the overall results for the U.S. community as a whole."

In addition, the testimony emphasized the Institute's concern that guidelines could have an adverse effect in the international standards arena as well if they suggest any "duty to disclose" on the part of the patent holder at the risk of losing valuable intellectual property rights. Ms. Marasco explained that such guidelines could allow foreign standards setting bodies to use any perceived mandatory obligation in the U.S. as justification for their own imposition of burdensome and potentially harmful obligations on U.S. companies seeking to participate in non-U.S.-based standards processes.

"The ANSI Patent Group was pleased to have been invited to present testimony on this very important and complex issue," noted Ms. Marasco. "Our testimony emphasized the effectiveness of the ANSI Patent Policy and the safeguards inherent in the Institute's procedural requirements for developing American National Standards."

FTC and DoJ officials have projected that a report reflecting the conclusions drawn from the hearings will likely be issued by the end of the summer. ANSI will follow this matter closely and disseminate additional details when they are released.

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