Jorge L. Contreras (American University - Washington College of Law) has posted
Patent Pledges on SSRN. Here is the abstract:
In the midst of today’s global smartphone wars, patent holders are promising to refrain from asserting their patents under certain conditions or to license their patents on terms that are “fair, reasonable and non-discriminatory” (FRAND). These promises are not being made in closed door negotiations, but in public, for the benefit of entire markets. I call these public, market-facing promises “patent pledges”, and they are beginning to dominate certain large and heavily litigated sectors of the global technology marketplace. But despite their increasing prevalence, current contract and antitrust law theories used to explain and enforce these pledges have fallen short. Most importantly, they fail to take into account the diverse range of settings in which technical standards and other common technology platforms are developed, and the public, rather than private, character of these commitments. Thus, a new theory is needed to secure the market-wide benefits that patent pledges offer. This article proposes a novel “market reliance” theory that adapts the equitable doctrine of promissory estoppel to the patent pledge framework by adding a rebuttable presumption of reliance borrowed from the “fraud-on-the-market” theory under Federal securities law. Under this new approach, a patent holder’s public commitment to refrain from enforcing its patents should be enforceable by any participant in the relevant market, absent a showing that it knowingly rejected the commitment.