Licensing clashes involving
The US Justice Department this month used Samsung’s suit against semiconductor company Netlist Inc. to double down on its position that disagreements over reasonable-and-nondiscriminatory—RAND—patent-licensing terms are best handled under patent and contract law. It also stepped into Disney’s lawsuit against patent owner InterDigital Inc. last fall.
That posture underscores a long-running tension in technology markets: when does a patent holder’s push for higher royalties become an anticompetitive “hold-up"—as Disney framed it—and when is it simply a hard-nosed licensing negotiation?
Companies that build products using standardized technologies often need licenses to use patents essential to those standards—known as standard-essential patents, or SEPs—and disputes arise over how much to pay and whether those demands cross the line into anticompetitive conduct.
Past battles over industry-wide SEP-licensing commitments have largely centered on patent portfolios tied to foundational wireless communications standards including Wi-Fi and 4G and 5G cellular. Those fights now extend to semiconductor technologies and video-compression standards that make modern streaming possible.
“This DOJ wants to keep contractual disputes over fair royalty rates away from the antitrust arena,” said Dylan Carson, a former senior Antitrust Division lawyer during the Obama administration who’s now a partner at Manatt, Phelps & Phillips.
The agency’s position in the two disputes “maintains the status quo” by preferring a case-by-case approach over broad antitrust rules for SEP disputes, he said.
The department is pushing courts not to presume that SEPs confer market power, Carson said, citing the DOJ’s statements of interest filed in Disney’s case and another filed April 7 in Samsung’s lawsuit over Netlist’s trade-agency bid to block US imports of its memory products. He also pointed to a March 25 speech by Deputy Assistant Attorney General Dina Kallay that further reinforced that position.
Presuming market power because a patent has been incorporated into a standard “would be an incorrect application of the antitrust laws that creates an unwarranted assumption of market power,” Kallay said in prepared remarks. “It may also unduly reduce the incentives for innovators to contribute cutting-edge technology to procompetitive industry standards.”
Disney says InterDigital crossed the line by misleading a global standards body about its willingness to license key video-compression patents on RAND terms, then demanding steep royalties and pursuing injunctions overseas against Disney+ and Hulu. InterDigital asked the court to toss the suit, accusing Disney of trying to frame a routine infringement-and-licensing dispute as an antitrust case.
Samsung similarly argues Netlist is wielding its memory-chip patents to maintain monopoly power, including by making RAND licensing commitments during standard-setting and then acting inconsistently with those commitments to harm competition. Netlist counters that its patents aren’t standard-essential and that Samsung’s claims improperly try to block its right to enforce them through the US International Trade Commission.
The DOJ didn’t respond to requests for comment.
Tech Backs Disney
Industry groups and academics say the DOJ’s emphasis on contract remedies in the Disney case misunderstands how SEP disputes often unfold in practice, particularly when patent owners pursue injunctions abroad while resisting US courts’ efforts to set reasonable licensing terms.
The Fair Standards Alliance—a coalition of more than 40 companies that includes tech giants such as
In a proposed amicus brief , the group said the “overall intent and effect” of the DOJ’s filing is to tilt the scales toward InterDigital. It pointed to the US Court of Appeals for the Third Circuit’s 2007 Broadcom v. Qualcomm decision, which held that a company may violate antitrust law if it deceives a standards body about its licensing commitments, secures market power, and then uses that leverage to demand higher royalties.
The DOJ’s filing also overstates the availability of contract remedies in these cases, the alliance said. SEP holders often argue that RAND commitments are too vague to enforce, resist court efforts to set reasonable license terms, and instead pursue injunctions—frequently overseas—to pressure companies into bigger payouts.
Two other industry groups—the Motion Picture Association and the App Association—also urged the Delaware court to reject InterDigital’s bid to toss Disney’s antitrust claims, warning that easing scrutiny of patent practices over standardized technology could destabilize streaming licensing and leave smaller companies exposed once an industry locks into a standard.
Policy Divide
The disputes echo debates that flared during the first Trump administration, said Michael Carrier, a professor at Rutgers Law School who has written extensively on antitrust and standard-essential patents. In Trump’s first term, then-Antitrust Division head Makan Delrahim told a patent-licensing conference that disputes over RAND—often used interchangeably with fair, reasonable, and nondiscriminatory, or FRAND—commitments generally fall outside antitrust law.
The wave of amicus filings in the Disney case reflects how sharply stakeholders are divided over the DOJ’s approach, he said.
“The stakes are high, in particular for parties that tend to fall firmly into the ‘patentee’ or ‘licensee’ camps,” Carrier said. “Policy has swung significantly from one administration to the next,” he added.
The stakes are heightened in global licensing fights, where patent holders can pursue injunctions in multiple countries simultaneously, he said.
SEP-royalty costs can cascade through the layered supply chains that support modern streaming services, said Brian P. Johnson, an intellectual property litigation partner at Axinn, Veltrop & Harkrider LLP. But the impact won’t end there.
“As SEP disputes move beyond handsets, they have become a shock to the system,” Johnson said. “As SEP-holders seek royalties, demands for indemnification ripple through the many levels of product development, leaving everyone asking the question: Who pays for this?”
To contact the reporter on this story:
To contact the editors responsible for this story: