Abstract

     An engineer sits quietly in a standards-setting organization (SSO) meeting at which technical proposals for a new high-speed digital subscriber line (DSL) modem are presented and discussed as part of the process of generating a new standard. He watches as one of his company’s fiercest rivals makes a proposal for how the modem at the customer’s premises will send diagnostic information to the modem at the telephone company’s central office. To his surprise, the proposal incorporates the very data protocol for which he and a colleague filed a patent application three months earlier. The proposal is well received by the other attendees, and after a short discussion, the group agrees to include in the standard the proposal that uses the method disclosed in the engineer’s patent application. As the editor of the standard records the agreement on the issues list, the engineer smiles, knowing that implementation of his soon-to-be-patented invention will be essential for anyone who wishes to build modems compliant with the standard.
     Does he have to say anything to the other SSO participants?
     Courts have found that if an SSO has a policy requiring its members to disclose information about their existing patents and pending patent applications, thus creating an obligation to speak, a patent holder who remains silent can be estopped from enforcing its patents against those who wish to implement the standard.**But what if the SSO has no policy requiring its members to disclose information about their intellectual property (IP) rights? Does the engineer who attends the SSO meeting and knows that the SSO is incorporating his invention in the standard still have an obligation to tell the other SSO participants about the pending patent? If he says nothing, and the standard that eventually issues does indeed contain his innovation, can he refuse to license the patent to those who wish to build standard-compliant equipment? If he agrees to license the patent, can he demand higher royalties than he would be able to collect for that patent absent the standard? This paper considers these questions.