“Standard Setting Increasingly Under Siege”

During the standard-setting process, it often is advantageous to incorporate the latest technological advances into the standard. In the pharmaceutical and biotechnological fields, standardization of laboratory techniques (such as ultra-high throughput screening) may involve patented fluid delivery systems, vessel design, genetic markers, antibodies, or bioinformatic tools. A standard is captured when a rogue member of a standard-setting organization (SSO) influences the SSO to select a standard requiring the use of that member’s intellectual property, with the intention of extracting excessive royalty payments from the industry once the standard is adopted industry-wide. Once the standard is widely adopted, the rogue member may assert its patent rights against industry participants, thus “holding up” the industry that adopted the standard. This can be a no-win situation for the industry: agree to arguably excessive royalty payments; incur the cost and delay of adopting a new standard; or face costly patent litigation.

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