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Brief for Amicus Curiae Intel Supporting Apple and Next Software

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Brief for Amicus Curiae Intel Supporting Apple and Next Software

Introduction
This case raises an issue of exceptional importance to the U.S. economy. Computing, networking, and communications products incorporate numerous interoperability standards promulgated by SSOs (“standards”)—technical specifications that ensure a common format for communicating between devices. These standards are often critical to further innovation and consumer choice, facilitating the rapid adoption of new products and services. Without such SSO-devised standards, consumers could not be assured that their devices would be able to communicate with devices made by other manufacturers. As a result, many consumers would delay purchases until the industry settled on a single technology through a process of attrition (thereby delaying the adoption of innovative new technologies), and early purchasers would be stranded with devices that cannot communicate with most other devices.

The expanding role of standards may exacerbate an already significant obstacle to innovation in the high-technology sector: the “holdup” problem, which arises when a patentee uses the threat of “an injunction, and the potentially serious sanctions arising from its violation” (for example, contempt sanctions), as “a bargaining tool to charge exorbitant fees to companies that seek to buy licenses to practice the patent.” eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 396 (2006) (Kennedy, J., concurring). This problem is particularly acute when compliance with a standard requires the infringement of standard-essential patents (“SEPs”). Because it is commercially necessary for manufacturers to comply with interoperability standards that achieve broad acceptance, manufacturers of standard-compliant products are required to practice technologies that are subject to SEPs, which in turn confers enhanced holdup power upon SEP holders who fail to honor their commitments.

Read the full Brief for Amicus Curiae Intel Supporting Apple and Next Software.