	Introduction

This report provides an overview of the current debate over whether a holder of a patent essential to an industry standard, who has promised to license such patented technology on fair, reasonable, and non-discriminatory (FRAND) terms, may nevertheless obtain an injunction from a federal court or an exclusion order from the International Trade Commission against infringing products that implement the industry standard. Standard-Setting Organizations and FRAND Licensing21

An "industry standard" is a set of technical specifications that provides a common design for a product or process. Standards bodies and their members have increasingly encountered claims that a patent covers an industry standard. Many standards bodies have established disclosure and licensing polices to attempt to preempt the potential conflict between industry standards and patent rights. Although these policies vary, they generally require that members of the standards body (1) disclose patent rights that are pertinent to a proposed standard and (2) license the patented invention that is essential to an adopted standard to others, often on "reasonable and nondiscriminatory" terms, a standard commonly known as "RAND licensing" or "FRAND licensing" (some policies call for fair, reasonable, and nondiscriminatory terms). Companies that produce products governed by a standard become "locked in" to the technologies included in the standard. In addition, eBay has impacted the availability of injunctive relief for SEP holders that promised to license on FRAND terms. Few would disagree that the SEP holder should be entitled to monetary damages in a situation where an SEP holder offers a FRAND license to an implementer of a standard, but the implementer (believing that the proposed royalty rates are too excessive) refuses to license the SEP and produces the infringing product anyway. However, in such a situation, is injunctive or exclusionary relief appropriate for the SEP holder against any party that wants to practice the standard but does not agree to the SEP holder's licensing terms? Recent Cases Before the ITC Involving Standard-Essential Patents

Several cases before the ITC involve whether a FRAND-encumbered SEP holder is entitled to exclusionary relief. The FTC submitted a statement to the ITC that sets forth the potential economic and competitive impact of injunctive relief on disputes involving SEPs: 
ITC issuance of an exclusion or cease and desist order in matters involving RAND-encumbered SEPs, where infringement is based on implementation of standardized technology, has the potential to cause substantial harm to U.S. competition, consumers, and innovation.... [W]e are concerned that a patentee can make a RAND commitment as part of the standard setting process, and then seek an exclusion order for infringement of the RAND-encumbered SEP as a way of securing royalties that may be inconsistent with that RAND commitment. Furthermore, many consumers, counting on standards to provide the functionality they require, are unwilling to purchase noncompliant products. economy." Removing this patent enforcement option at the ITC may be harmful to the rapidly growing IT and telecommunications industries that often participate in the SSOs. For example, Google may seek an exclusion order issued by the ITC or an injunction order issued by a federal court against a potential licensee who:
1. is outside the jurisdiction of the U.S. district courts; 2. has stated in writing or in sworn testimony that it will not license the FRAND patent on any terms (although the Order provides that a challenge to the validity, value, infringement, or essentiality of the FRAND patent shall not constitute a statement that the potential licensee will not license the patent); 3. refuses to enter a license agreement on terms that have been set in a final ruling of a court or through binding arbitration; or 4. fails to respond within 30 days of receiving a "FRAND Terms Letter" that Google sends to a potential licensee, in which Google requests that Google and the potential licensee agree to license each other's patents that are essential to complying with standards that each uses on terms that are FRAND and comply with each party's FRAND commitments.
An "industry standard" is a set of technical specifications that provides a common design for a product or process. Standardization is crucial to the functioning of the modern innovation-based economy and in particular to the efficient interoperability of technologically complex consumer electronic devices. Standards allow several firms to supply services and products that incorporate the standard, which may help to lower prices and provide greater consumer choices. Standard-setting organizations (SSOs) are voluntary membership organizations in which industry participants collaboratively select particular technical standards to be used by products in that industry. Many SSOs require their members to adhere to licensing policies and bylaws that try to preempt the potential conflict between industry standards and patent rights; such policies generally require that members of the SSO (1) disclose patent rights that are pertinent to a proposed standard and (2) license the patented invention within a standard to others on "fair, reasonable, and nondiscriminatory" terms, a standard commonly known as "FRAND licensing."
In the past several years, there has been considerable debate over whether injunctive relief in a patent infringement lawsuit (or exclusionary relief at the International Trade Commission (ITC)) should be available to companies that own patents that cover a particular industry standard (so-called "standard-essential patent" or SEP), when those companies have previously committed themselves to license their patented technology to anyone (corporate partners or competitors) on FRAND terms. The question particularly impacts the computing and telecommunications industries, as consumer electronic products such as smartphones, GPS devices, tablets, and gaming consoles incorporate a number of industry standards that include patented technology. Many high technology companies have been involved in patent infringement lawsuits and cases before the ITC that concern disputes over SEPs and FRAND licensing. Some of the electronic device manufacturers object to what they believe are unreasonably excessive royalty requests by the SEP holder and thus do not reach an agreement to license the SEP. In such a situation, the SEP holder has sought out a judicial determination of the royalty rate or even an injunction (from federal courts) or exclusion order (from the ITC) against the sale or importation of products made by companies that did not obtain a license.
Some argue that a company that owns an SEP and that has promised to license such patent on FRAND terms essentially waives its right to seek an injunction against another company that implements the standard but fails to reach a license agreement with the SEP holder. They raise concerns about the potential negative effects on competition and U.S. consumers of allowing injunctive or exclusionary relief in cases involving FRAND-encumbered SEPs. They also believe that the threat of an injunction weighs heavily in negotiations over SEP licensing in a way that disproportionately rewards the SEP holder. However, others argue that an SEP holder is entitled to injunctive relief because an SSO's FRAND agreement does not include a promise not to seek an injunction in appropriate circumstances. Yet, they assert that if an SSO required its members to give up their right to exclude others (which is the primary right that a patent confers), participation in the voluntary standard-setting process may diminish. Furthermore, if SEP holders were limited to only damages and not injunctive relief, implementers of the industry standard may forgo negotiating a license before introducing a product and then wait for a federal court to decide on an award of damages for the infringement.