Standards and Patent Assertion Entities at the IP-Antitrust Interface: Adhering to Basic Principles

The United States antitrust approach to intellectual property has evolved over time. The same antitrust analysis now applies to conduct involving IP as to conduct involving other forms of property, taking into account the specific characteristics of the particular property right.

However, there have been significant calls recently for findings that infringements suits and licensing conduct by patent assertion entities (PAEs) labeled “patent trolls” and holders of standard essential patents (SEPs) generally are monopolization or attempts to monopolize that violate Sherman Act §2, 15 U.S.C. §2. This paper argues that the basic principles of keeping in mind history and context, and general antitrust principles, apply equally to SEPs and PAEs as to other economic phenomena.

1. Introduction

The interaction of intellectual property rights laws and antitrust laws has been the subject of much debate over the years. The United States antitrust approach to IP has evolved over time. Earlier, there was an assumption that the IP laws were intended to create and did create monopolies, so that effectively IP was exempt from the antitrust laws. Later, there was a view that that there is an inherent conflict between IP laws that grant “monopolies” and antitrust laws that prohibit monopoly. Because an IP right was assumed to confer upon the holder some monopoly, and is an exception to the prohibition against monopolies, there was a focus on ensuring that the exercise of IP rights was strictly within the scope of the rights, and ancillary restraints in IP transactions were generally viewed as outside the scope of IP and therefore an abuse of monopoly power and violation of the antitrust laws. As a result, practices relating to IP licenses such as tying, grantbacks, exclusive dealing and package licensing were commonly considered antitrust violations.

The IP laws and the antitrust laws are now commonly viewed as complementary. Both value innovation, competition and consumer welfare. The view is that the IP laws do not necessarily confer monopolies, but confer only the right to exclude others from the areas covered by the IP. Under U.S. law there is the fundamental right unilaterally to exclude others from the scope of the IP. In actuality, most patents are either never put into practice, or, if practiced, do not convey any market power at all.

Under current U.S. law, the same antitrust analysis applies to conduct involving IP as to conduct involving other forms of property, taking into account the specific characteristics of a particular property right. IP rights are considered to be a form of personal property rights. There is no presumption that IP creates market power. The Patent Act makes that clear in the context of patent law, which requires a demonstration of actual market power before patent misuse may be found.

The Supreme Court’s decision in Illinois Tool Works Inc. v. Independent Ink, Inc., a tie-in case, extended that principle to the antitrust context. The Supreme Court reviewed its earlier cases involving tie-ins, and noted that it had moved away from assumptions of market power to requiring proof of actual market power in tie-in cases generally. It also noted that the presumption of market power in a patent arose in the patent misuse context and later was adopted in antitrust cases. However, since those decisions, Congress amended the Patent Act to eliminate that presumption in patent misuse. In light of the change in the patent law, and the evolution of the thinking in the antitrust law in non-patent contexts, the Supreme Court concluded that there needs to be evidence of actual market power rather than a presumption of market power in a patent in a tying case involving that patent. It rejected a rebuttable presumption of market power. Moreover, as in other areas of the economy, the mere fact of monopoly power, even if from the holding of IP, is not an antitrust violation.

However, in recent years, there have been significant calls for findings of antitrust liability against holders of standard essential patents (SEPs) and patent assertion entities (PAEs) labeled “patent trolls”, arguing that infringements suits and licensing conduct by PAEs and SEPs holders generally are monopolization or attempts to monopolize that violate Sherman Act §2, 15 U.S.C. §2.

This paper considers the question of the appropriate approach under the antitrust laws to SEPs and PAEs, and argues that basic principles apply equally to SEPs and PAEs as to other economic phenomena. Basic principles in this context are generally the principle of keeping in mind history and context, and general antitrust principles. This paper first considers each of these aspects before addressing the appropriate specific antitrust approach to SEPs and PAEs.

2. History and Context

In the 128 years since the 1890 enactment of the Sherman Act, the basic U.S. antitrust statute, the U.S. has accumulated vast experience with competition law and policy enforcement. The U.S. enforcers dealt with challenges ranging from breaking up immense cartels that dominated the U.S. economy, such as the legendary Standard Oil trust at the turn of the 20^th Century, to reverse payments in patent settlements and the activities of PAEs today. The understanding and application of the law have evolved significantly over 128 years in light of this experience, including in the IP context.

The context of the state of a country’s economy affects its law, including competition law. Many of the early, key U.S. Supreme Court decisions interpreting the Sherman Act and laying the foundations of U.S. antitrust law involved huge cartels that affected substantial portions of the U.S. economy, such as the Standard Oil trust, the railroad trust, and the meat packing cartel. These are cases that may be unlikely to occur today in the U.S., substantially precisely because of this early law enforcement and because of changes in the U.S. economy in the last 120-plus years.

This interplay between changes in the economy and the evolution of the antitrust law may be playing out in jurisdictions around the world, perhaps especially at the IP-antitrust interface. Certainly the balancing in the U.S. between fostering innovation and ensuring public access to innovation, and the approach of U.S. antitrust law to IP, has evolved over time. Some of the evolution occurred perhaps as a result of the shift of the U.S. from being primarily an IP-taker in the 18th and 19th Centuries, to significantly an IP-giver today. Some of this evolution can be seen in other jurisdictions, currently perhaps even in China.

A reflection of the importance of context may be the following anecdote: A renowned U.S. antitrust professor was invited to speak at the celebration of the fifth anniversary of the enactment of a country’s first competition law. Two of the questions that the professor was asked were: (1) how do you protect your witnesses in competition law cases; and (2) how do you prevent your judges from being bribed. These two questions were beyond the learned professor’s experience, and he had been an antitrust practitioner early in his career. The questions are likely beyond the experience of U.S. antitrust practitioners today generally. On the other hand, it is unclear that the questions would have been beyond the experience of antitrust practitioners in the U.S. 120 years ago.

These may be situations of where one stands, depends on where one sits. The positions one takes depend on one’s particular circumstances. The challenge is to distinguish when the positions may be based on shaky principles, and when the positions may appear to have immediate benefits but will have serious long-term costs.

3. Antitrust Principles

In the context of IP, the most common scenarios raising competition law concerns involve the unilateral actions of individual IP holders. These are scenarios of monopolization and attempted monopolization.

After over 70 years of experience under the Sherman Act, in 1966, the U.S. Supreme Court established in its decision in U.S. v. Grinnell Corp. the U.S. test for monopolization, which includes two elements, first, that there is monopoly power in a relevant market, and second, that the power was acquired or maintained willfully as distinct from growing or developing as a result of a superior product, business acumen or historic accident. Therefore, in order for there to be monopolization, or abuse of dominant market position, in the U.S., there needs to be a dominant market position. Conclusions regarding the existence of market dominance should be reached only after a case-by-case factual analysis.

And over 30 years after Grinnell, more than 100 years after the enactment of the Sherman Act, in 1998, the Supreme Court in its decision in NYNEX Corp. v. Discon clarified as to the second element for monopolization in violation of the Sherman Act, that simply having an anticompetitive motive, even if there was fraud that enabled a monopolist to raise prices, is insufficient to constitute a violation of the Sherman Act if there was no harm to the competitive process as a result.

Where there may be insufficient market power for monopolization, attempted monopolization may be found, but only if there are the three elements of the specific intent to destroy competition or achieve monopoly, some exclusionary or anticompetitive conduct pursuant to that intent, and a dangerous probability of success. Therefore, unless there is a dangerous probability that a monopoly will be achieved as a result of the anti-competitive conduct, there is no attempted monopolization in violation of U.S. antitrust law.

These antitrust principles are based on the premise that the goals of competition law are to promote competition, consumer welfare and efficiency. In this framework, competition law is generally antithetical to industrial policy. To the extent other goals are considered to be competition law goals, then the application of competition law to IP may be different. These may also be situations of where one stands depending on where one sits.

4. Application to IP Generally

These basic antitrust principles apply to IP generally. The consensus in the U.S. is that there should be no special definition of market dominance in the IP context, and the holding of IP does not necessarily mean the holding of market power. The U.S. antitrust enforcement agencies have consistently adhered to these principles. This may be seen most recently in the 2017 updates to their 1995 Antitrust Guidelines for Licensing of IP, and in the Federal Trade Commission’s recent PAE Study.

The 1995 U.S. IP Guidelines were in place for over 20 years, and stated the Department of Justice’s and Federal Trade Commission’s antitrust enforcement policy regarding the licensing of IP protected by patent, copyright, and trade secret law and of know-how. Over the years, the agencies have reviewed the IP Guidelines, including in 2007, when they jointly issued their report “Antitrust Enforcement and Intellectual Property Rights: Promoting Innovation and Competition”.

The 2017 updates to the IP Guidelines reaffirm the agencies’ enforcement approach with respect to IP licensing and do not expand the guidelines beyond licensing. They are intended to conform the 1995 IP Guidelines to changes in statutory and case law since 1995. The 2017 updates include updating references to the lengthened patent and copyright terms, as well as references to the Supreme Court’s decisions in Illinois Tool Works and in Leegin Creative Leather Products, Inc. v. PSKS, Inc. applying the rule of reason to vertical price agreements. These changes do not affect the application of basic principles, but reaffirm them – that the same antitrust analysis applies to conduct involving IP as to conduct involving other forms of property, taking into account the specific characteristics of the property, that there is no presumption that IP creates market power, and that IP licensing is generally pro-competitive, enabling firms to combine complementary factors of production. As the agencies announced, the 2017 updates added language to the 1995 IP Guidelines to reaffirm their longstanding view that “the antitrust laws generally do not impose liability upon a firm for a unilateral refusal to assist its competitors, in part because doing so may undermine incentives for investment and innovation.”

One update that may further reflect the U.S. agencies’ continuing re-evaluation of their approach is, as they announced, to

“the analysis of markets affected by licensing arrangements to mirror the approach taken in the 2010 Horizontal Merger Guidelines. The IP Licensing Guidelines’ approach to innovation markets has been revised to reflect the agencies’ actual experience with this mode of analysis. The proposed update retains the concept of ‘innovation markets,’ but refers to them as ‘Research and Development Markets’ to more accurately reflect how these markets have been defined in enforcement actions.”

The FTC has also continuously researched developments relating to IP, including those summarized in its 2011 report, “The Evolving IP Marketplace: Aligning Patent Notice and Remedies with Competition (“Evolving IP Marketplace Report”). In its PAE Study the FTC suggested steps that may address some concerns relating to PAEs, which are consistent with the principle stated in its 2003 report “To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy”, and reiterated in its 2011 Evolving IP Marketplace Report, that where concerns with how patent rights are being exercised are based on aspects of the patent system that allow such abuses, then the remedy may be more appropriately in adjustments in the patent system, unless the abuses clearly have an adverse impact on competition. Where competition concerns are unclear but other concerns exist, then non-competition law remedies may be appropriate instead of competition law enforcement.

5. Antitrust Approach to SEPs

One definition of standards is “a set of characteristics or qualities that describes features of a product, process, service, interface or material”. The process of standard setting is that of identifying, developing and/or choosing such a set of characteristics or qualities. Standard setting may be as simple as agreeing on the size of paper, such as the A4 size that is common outside the U.S., so that printers can be built to handle a few sizes of paper. Or the configuration of electrical plugs, so that different types of appliances may be connected to wall outlets and get power. Such standards free up market participants to focus on how to build better printers or appliances, instead of expending effort to deal with ancillary issues such as accommodating an unlimited range of paper sizes or electrical wall outlet configurations.

Thus, standard setting have beneficial effects, increasing consumer welfare and efficiency by establishing uniform approaches that enable interoperability and scale. However, there are opportunities for anticompetitive conduct and impact. The standards development process, and standards themselves, may be abused and create anticompetitive effects. Standards, and the standards development process, are generally tested in the U.S. under the rule of reason. Some of the factors that may be considered are whether there is economic detriment to a firm excluded or unqualified as a result of the adoption of a particular standard, the scope of the restrictions in the standard, how the standard is applied, and whether a boycott or price fixing is involved.

Nowadays, many standards incorporate IP and require licenses of IP to be implemented. Under many standard development organization (“SDO”) policies, a patent is “essential” to a standard if it is not possible as a technical matter to implement the standard without infringing the patent.

The activities of holders of IP, often patents, essential to the implementation of a standard, or SEPs, may be subject to antitrust scrutiny, both during the development of the standard, and after the standard has been adopted. There may be antitrust and other implications of a possible failure to disclose SEPs during the standard development process, and of the royalty structure and other terms that the holder of a SEP demands in licenses to enable implementation of the standard. There is a significant concern with SEPs holders controlling and misusing market power that they obtained only because their IP is essential to implement a standard.

The consent order that the FTC reached in 1996 with Dell Computer Corp. may be the first of the current generation of cases reflecting concerns about SEPs. In Dell, the FTC alleged that Dell had violated Section 5 of the Federal Trade Commission Act through its participation in the Video Electronics Standards Association (VESA). While a member of VESA, Dell supported a design standard for a computer bus design, the VL-bus. Dell certified to VESA that the standard did not infringe on any Dell patents. In fact, a year earlier, Dell had received a patent covering the mechanical slot configuration used on the computer motherboard to receive the VL-bus card. Not only did Dell apparently fail to disclose this patent, but, once the standard was implemented, Dell informed VESA members who were manufacturing computers using the new design standard that they were infringing Dell’s patents. The FTC alleged that Dell harmed competition by hindering, preventing, and raising the costs associated with, the acceptance of the VL-bus standard. In addition, the FTC alleged that Dell’s actions had chilled willingness to participate in industry standard setting efforts. Dell entered into a consent decree which required it to cease all efforts to enforce the patent.

Another notable example is the Rambus case, which was litigated from the FTC in 2002 through to the D.C. Circuit Court of Appeals in 2008. The FTC alleged that Rambus, Inc. had violated Section 5 of the FTC Act by participating in the work of an industry standard setting organization, JEDEC, without disclosing that it possessed a patent and several pending patent applications that covered technologies ultimately adopted in some JEDEC standards. According to the FTC, Rambus perfected its patent rights, and once the standards had become widely adopted, enforced those patents against companies manufacturing products in compliance with the standards.

The FTC Administrative Law Judge dismissed the FTC’s claims, finding that Complaint Counsel did not demonstrate (1) that the challenged conduct amounted to a pattern of anticompetitive acts and practices, (2) exclusionary conduct, (3) intent, (4) causation, (5) anticompetitive effects or (6) that manufacturers needed to use Rambus’s technology to comply with the standard. The Commission reversed the ALJ and found that Rambus had in fact violated Section 2 of the Sherman Act and Section 5 of the FTC Act. The Commission found that a key factor was whether the specific standards development process created a reasonable expectation of non-deceptive conduct that Rambus’s behavior failed to meet, and rejected Rambus’s argument that its non-disclosure of information relating to its patent applications was necessary to protect trade secrets.

The D.C. Circuit reversed, finding that, even if there would have been anticompetitive impact if Rambus had engaged in deception to avoid being excluded from the standards, there would have been no anticompetitive effect if Rambus had only avoided making assurances that it would demand only reasonable and non-discriminatory (“RAND”) license fees. It reasoned that “an otherwise lawful monopolist’s use of deception simply to obtain higher prices normally has no particular tendency to exclude rivals and thus to diminish competition.” Ultimately the FTC dismissed its administrative complaint.

Another area that has been a focus of concern is that of the alleged refusal to license SEPs, or refusal to license SEPs on RAND or fair, reasonable and non-discriminatory (“FRAND”) terms. While all the cases brought by the U.S. agencies to date involving such allegations have been resolved by consent decree, and sometimes under the unfair practices prong of the FTC Act instead of the unfair methods of competition prong, the competition law approach of the U.S. agencies to standards remains adhering to basic principles.

A significant factor is that SDOs in the U.S. are overwhelmingly private organizations, with little if any government involvement. The practices of SDOs in the U.S. vary widely, and are influenced by the industries and histories involved. For example, while many U.S. SDOs require RAND commitments from holders of SEP, often as a quid pro quo for the inclusion of the IP in the standard, other SDOs require only disclosure by IP holders of potential SEPs and of their intent regarding the licensing of the SEPs to standard implementers. In some cases, the holder of the potential SEPs may commit to offer royalty-free licenses or set forth the specific terms under which it will license SEPs. In other cases, the holder of the potential SEPs may make a RAND commitment. The terms and conditions of patent license agreements, including agreements under RAND commitments, are negotiated bilaterally, between a patent holder and a potential licensee, taking into account the specific facts and circumstances of the parties and the relevant technologies, industries and jurisdictions. There is no one-size-fits-all definition of RAND terms.

Also, the concept of “de facto standards” is not recognized in U.S. law. “De facto” technical standards, those technologies that become standard because they succeeded in the market place, are treated under U.S. law just like any other IP. The majority view in the U.S. is that there is little reason to subject “de facto” standards to the more stringent requirements that may be appropriate for collaboratively set standards adopted by SDOs, unless the holder of an essential patent for a “de facto” standard has made commitments to license its IP to implement the standard. Such a situation was the case in Intel Corp. v. VIA Technologies, Inc. In that case, Intel unilaterally established a standard for certain computer chip specifications incorporating its technology, and provided a reciprocal royalty-free license available on its website for the technology. Via accepted Intel’s license and manufactured products that complied with the standard. Intel sued for infringement, claiming that the license did not cover technology needed to implement optional portions of the standard. The Federal Circuit found that, while the parties’ differing interpretations of the scope of the license each had merit, the District Court did not err in resolving the ambiguity against the drafter, Intel, and affirmed the District Court’s summary judgment of non-infringement.

In contrast, de jure standards, those technologies that become standard because they are adopted by an SDO, may appropriately be treated differently, because they may achieve a market position that is not solely the result of competition.

In all cases, there are at least two levels at which the antitrust analysis is made. First, there is the question of whether the particular standard has market power. The competitive impact of conduct relating to a SEP depends significantly on the market power of the standard involved. If the standard is not dominant, does not have the power to control prices or exclude competition, then it would appear difficult to argue that any IP that reads on the standard, whether or not a SEP, has market power by virtue of reading on the standard. In that case, conduct involving that IP in relation to the standard may not rise to the level of an antitrust violation.

Second, even if the standard involved has market power, there is still the question as to whether any particular IP that reads on the standard has market power. The question remains whether the patent holder has the power to control prices or exclude competition in a relevant market. Any conclusion of market dominance should be reached only after a case-by-case factual analysis, including in the case of SEPs. It is not always clear that the IP is a SEP. And it is unclear that a SEP must have market power. During the development of a standard, it is often unclear which patents will ultimately be essential, both because the standard itself is evolving and because the scope of protection afforded by a patent usually changes during the patent application process. Participants therefore typically identify, if required or asked to do so, patents and patent applications that “may be” essential, rather than patents and applications that “are” essential. Whether a declared (“may be”) essential patent is actually essential is an issue that may never need to be resolved or that may be resolved later. For example, some holders of SEPs do not actively seek to assert their patents, but instead hold their patents for defensive purposes. There is no need for the holders of such patents or implementers of standards to determine whether such patents are actually essential.

Moreover, where SEPs are subject to contractual RAND obligations, commitments to license the SEPs under RAND terms, the SEP holder substantially limits the circumstances in which it may refuse to grant a license or obtain injunctive relief against infringement. When an enforceable RAND obligation applies, the ability of the patent holder to raise prices or exclude competition may be constrained, mitigating the risk of actual “patent hold-up”.

There is debate in the U.S. as to whether the “nondiscriminatory” aspect of contractual RAND obligations would be best enforced as a contractual matter or whether competition law remedies are required. The adjudicated cases in the U.S. relating to RAND terms have been contract law and patent infringement cases, not competition law cases. The actual market situation, including the specific contractual RAND obligation and the rules of the particular SDO, should be examined. Patent, contract or other remedies may be available and more appropriate.

6. Antitrust Approach to PAEs

PAEs are entities which hold patents, but do not practice them, and instead gain revenues primarily from enforcing the patents against other entities. In the context of calls for quick action against patent trolls and anecdotes told of abusive practices by PAEs, the U.S. FTC issued its PAE Study in October 2016, reporting on the results of a study that it began in 2014. The following three aspects of the PAE Study are striking:

1. While there have been and continues to be calls for quick action against patent trolls and anecdotes told of abusive practices by PAEs, the FTC took the time and effort to gather facts before taking or recommending any action. It is a recognition that the plural of anecdote is not data.

2. Based upon its study, the FTC recommended several changes in procedures for patent litigation, and is silent on any application of the antitrust laws.

3. The recommendations are apparently based on a view that while there appears to be a significant amount of nuisance infringement lawsuits brought by a significant percentage of PAEs, those suits have little impact on competition, so that the appropriate remedy for such abuse of process should be adjustments to the process to make it more difficult to abuse.

The FTC’s PAE Study recommendations are consistent with the principle stated in its earlier studies of IP developments, that the remedy to the perceived abuses may be more appropriately in adjustments to the patent system, unless the abuses likely have an adverse impact on competition.

7. Infringement Suits by SEPs Holders and PAEs

There is certainly the potential for patent infringement suits to be used in an abusive manner, by all types of patent holders, including SEPs holders and PAEs. Nonetheless, the First Amendment to the U.S. Constitution protects the right to petition. Under the Noerr-Pennington doctrine, the Supreme Court has applied the First Amendment to protect lawsuits that may have been brought for anti-competitive purposes, unless the lawsuit was shown to be objectively baseless under the standard established in Professional Real Estate Investors v. Columbia Pictures Industries (PRE). PRE establishes a 2-pronged test for whether there is a sham litigation that is unprotected by the First Amendment:

1. Whether the lawsuit is objectively baseless; and

2. If it was objectively baseless, whether it was brought for the purpose of adversely affecting a competitor through the use of legal processes, instead of through the result of the process. In other words, whether the lawsuit was brought without caring whether it will be won, because the goal is to affect the competitor by forcing the competitor to defend the lawsuit.

In context of IP, the Walker Process and Handgards line of cases establishes that litigation to enforce a patent that is known to be invalid, not enforceable, or not infringed would not be protected by the Noerr-Pennington doctrine. In such cases, there is the specific bad intent that is required to show an attempt to monopolize in violation of §2 of the Sherman Act. Walker Process involved a case where a patent was obtained by fraud and a lawsuit was brought to enforce it by a plaintiff that knew that the patent was obtained by fraud. Handgards involved a situation where at the time the infringement suit was brought, the plaintiff knew that the patent was invalid. The courts have generally also applied this standard to infringement notices that are customarily sent before lawsuits are commenced. Therefore, unless the allegations in the notice were objectively baseless and made with that knowledge, the notice would be protected by the Noerr-Pennington doctrine.

Noerr immunity applies equally to suits seeking relief from infringement of SEPs subject to a FRAND assurance. And implementing a criterion of “objectively baseless” for lawsuits brought by a PAE, that is based on a reasonable litigant’s expectation of success on the facts and law applicable to a particular case, would serve a dual purpose – discouraging the abuse of litigation and governmental process for anticompetitive purposes while preserving the proper use of patent infringement suits for enforcement of patent rights.

However, under U.S. law, even if a lawsuit is a sham and brought for anticompetitive purposes, for the lawsuit to be an antitrust violation, the elements of monopolization or attempted monopolization must still be established. An entity may be guilty of abuse of process and bringing frivolous lawsuits, and may be liable to damages for those offenses, but there may still not be an antitrust violation. The presence of market power and impact on competition must still be demonstrated to support a monopolization claim. The presence of a specific intent to monopolize the market and a dangerous probability of success must be shown to support an attempt to monopolize claim. Moreover, if a lawsuit is not objectively baseless, then even if it was brought for the purpose of excluding a competitor from the market, there is no antitrust violation whether or not the lawsuit is ultimately successful.

In any event, the IP right to exclude does not imply that an injunction should issue in all cases of infringement. In the U.S., entitlement to an injunction in a patent infringement dispute is governed by the factors set out by the U.S. Supreme Court in eBay Inc. v. MercExchange, L.L.C. The factors that a patent holder seeking an injunction must show are: (1) it has suffered an irreparable injury; (2) remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) the public interest would not be disserved by a permanent injunction. This test is the same as that applied in other types of claims for preliminary injunctive relief and requires a case-by-case, fact-specific analysis. One of factors is whether the patent involved is subject to a RAND commitment, in which case an injunction may be unlikely except in cases such as where the prospective licensee is unwilling or unable to enter into a license on RAND terms. eBay should mitigate much of the concern over injunctions sought by SEPs holders and PAEs.

8. Conclusion

There needs to be care not to fall into the trap of having a hammer and seeing everything to be a nail, and to try to apply competition law to all problems. Sometimes, less is more. Sometimes, other remedies are more appropriate. IPs should not be viewed as inevitably essential facilities, including in the case of PAEs, standards and SEPs. It is important to make sure of the facts, and act accordingly after careful deliberation. The 2017 IP Guidelines and the FTC’s PAE Study are two examples of the adherence to basic principles, that should be applied to standards, and PAEs.