Innovation, Intellectual Property, and Industry Standards (CRS Report for Congress)
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| Release Date |
May 29, 2003 |
| Report Number |
RL31951 |
| Report Type |
Report |
| Authors |
John R. Thomas, Resources, Science, and Industry Division |
| Source Agency |
Congressional Research Service |
Summary:
An "industry standard" is a set of technical specifications that provides a common design for a
product or process. Relating to products ranging from typewriter keyboards to high technology
computer protocols, standards are pervasive in the modern economy. Standards sometimes arise
through government action or through the operation of the marketplace. However, private industry
groups called standards bodies have long been active in promulgating standards.
Standards bodies and their members have encountered a growing number of claims that a
privately held "intellectual property right" -- such as a copyright or patent -- covers an industry
standard. Most of these assertions have involved patents. If the patent is valid and enforceable, it
is possible that the standard cannot be employed without infringing that patent.
Striking a balance between open industry standards, on one hand, and exclusive intellectual
property rights, on the other, is an important component of contemporary industrial policy. Industry
standards potentially bring economic benefits ranging from a broad range of interoperable products
to more robust, competitive markets. In turn, intellectual property rights may promote innovation,
the disclosure of new inventions and technology transfer. Conflicts between industry standards and
intellectual property rights require a careful weighing of these competing interests.
Aware of potential conflicts between industry standards and intellectual property rights, many
standards bodies have enacted intellectual property polices. Although these policies vary, they
generally require that members of the standards body (1) disclose intellectual property that is
pertinent to a proposed standard and (2) license the intellectual property to others, often on
"reasonable and nondiscriminatory" terms. Past litigation and governmental agency actions have
involved cases where a member of a standards body allegedly did not abide by these obligations.
Various legal doctrines, including contract law, fraud, equitable estoppel and antitrust law, have been
employed to compel the observance of disclosure and licensing commitments. However, some
uncertainty surrounds the enforceability of the intellectual property polices of standards bodies,
particularly against individuals and firms that were not members of the group that promulgated the
standard.
Should Congress have an interest in this area, several options present themselves. No action
need be taken if the current relationship between industry standards and intellectual property is
deemed satisfactory, particularly as standards bodies become increasingly aware of intellectual
property and as the growing number of judicial precedents may make the legal situation clearer.
Congress might also encourage the development of model intellectual property disclosure and
licensing obligations for use by standards bodies; assist standards bodies in identifying intellectual
property that pertains to a proposed standard; and, as a possible more far-reaching legal reform,
encourage proprietors to disclose intellectual properties that bear upon proposed industry standards.
