InterDigital has submitted its own public interest statement  in its ITC case against Nokia and ZTE, Inv. No. 337-TA-868, regarding ALJ Essex’s FRAND analysis. As discussed in our July 9, 2014 post, Ericsson, the Innovation Alliance, Sen. Casey, and Microsoft have submitted their own statements addressing the public interest considerations affected by ALJ Essex’s Initial Determination, which rejected arguments that exclusion orders should not be available for standard-essential patents and addressed the obligations owed to a patent holder by potential licensees. Three of the responses — those submitted by Ericsson, the Innovation Alliance, and Sen. Casey — supported ALJ Essex’s analysis, while Microsoft asserted that SEP owners should not be entitled to exclusion orders on FRAND-encumbered patents.

Arguing that an exclusion order is an appropriate remedy in this case, InterDigital’s submission classifies the pending action as “one of the first investigations building a full record on the public interest in the context of potentially standard-essential patents (SEPs),” which “presents an ideal opportunity for the Commission to demonstrate the need for strong protection against reverse patent hold-up.” InterDigital notes that each of the Federal Circuit, DOJ, USPTO, FTC, ITC, and USTR have issued statements or decisions indicating that exclusion orders are not precluded solely on the basis that the asserted patent is standard-essential, further emphasizing the potential harm that can be caused by a “reverse hold-up” or “hold-out” by which a potential licensee avoids entering into a licensing agreement with a SEP-owner subject to FRAND obligations.

InterDigital argues that the record supports its position, pointing out that the ALJ found InterDigital engaged Respondents in good-faith licensing negotiations and that the Respondents engaged in reverse hold-up: “These Respondents chose to take the actions that led to the allegation of infringement rather than follow the ETSI policy for obtaining a license.”

InterDigital’s submission asserts that the ITC’s duty to enforce intellectual property rights serves to promote innovation and economic progress “through providing adequate and effective protection and enforcement” and argues the statutory public interest factors against which an exclusion order should be weighed do not overcome the importance of protecting InterDigital’s patent rights. Specifically, InterDigital argues that an exclusion order in this action (1) would not advesrsely affect competitive conditions because Respondents’ reverse hold-up should not be rewarded; (2) would not adversely affect consumers because reasonable substitutes for the devices-at-issue exist; (3) would not affect public health and welfare; and (4) would not adversely affect the production of competitive articles in the U.S., as the devices-at-issue are not produced in the United States.