Global Maneuvering in IP and Standards

Global Maneuvering in IP and Standards - The House Judiciary Committee recently convened a hearing to address the growing challenges of global competition in intellectual property (IP) and standards. The discussion highlighted significant obstacles faced by U.S. businesses, engineers, and standards development organizations (SDOs) like the American Society of Mechanical Engineers (ASME). The outcomes of this hearing carry profound implications for innovation, international market access, and the future of global standards-setting practices. 

State Influence in Standards Setting - The hearing revealed that international standards-setting organizations (SSOs) are increasingly being leveraged to integrate state-backed technologies into global supply chains. Through coordinated participation, state actors holding influential positions within SSOs have been found to promote their own technologies at the expense of fair competition. Compounding this issue, foreign courts have been setting artificially low royalty rates for U.S. standard essential patents (SEPs), disadvantaging American patent holders and encouraging the adoption of state-backed technologies. 

The Role of Standard Essential Patents (SEPs) - SEPs play a crucial role in enabling global interoperability across technologies. Historically, U.S. companies have led in SEP innovation. However, abusive practices, such as subsidizing patent filings and distorting licensing terms, have created significant hurdles. For example, foreign government subsidies encourage foreign firms to file large volumes of low-quality patents, overwhelming patent offices and skewing licensing negotiations.These challenges can be onerous for many ASME members, including small and medium-sized enterprise (SME) owners, who find it increasingly difficult to navigate an increasingly complex global IP landscape. Coupled with foreign government subsidies, many U.S. innovators are struggling to maintain their competitive edge in international markets. 

Judicial Overreach - Another focus of the hearing was the misuse of legal strategies, such as anti-suit injunctions. These injunctions allow foreign courts to block U.S. companies from pursuing parallel litigation domestically, granting local firms a competitive advantage. Panelists emphasized that while foreign courts often expedite domestic IP cases, U.S. cases frequently face delays, creating an uneven playing field. For ASME members, this judicial imbalance can significantly hinder efforts to achieve fair enforcement abroad. 

Strengthening U.S. Leadership in Standards - The hearing underscored several strategies to counteract abusive practices and reinforce U.S. leadership in standards: 

1. Increased Participation in SSOs: Encouraging ASME members to engage more actively in SSOs can help counterbalance malign influence. Government incentives for participation and technical contributions could further level the playing field. 

2. Enhanced Legal and Regulatory Frameworks: New legislation aimed at strengthening patent enforcement could protect innovators’ rights and ensure fair compensation. 

3. International Collaboration: Coordinated action through entities like the World Trade Organization (WTO) can address systemic abuses and promote transparency. 

4. Support for SMEs: Establishing clearer guidelines and more accessible licensing frameworks could empower smaller innovators, who often bear the brunt of predatory practices. 
    

ASME’s Role Amid Global Shifts - As a leader in engineering standards, ASME faces the dual challenge of maintaining its leadership in global standards-setting while safeguarding the integrity of its standards against shifting global dynamics. The hearing’s findings emphasize the need for ASME to advocate for robust U.S. engagement in international standards development, collaborate with policymakers to ensure fair licensing practices, and uphold high-quality standards that reinforce the credibility of established SDOs. 

The Judiciary Committee’s hearing on strategic competition highlights a pivotal moment for U.S. innovation and leadership in standards. For ASME and its members, the stakes are high. By proactively addressing unfair practices and strengthening its influence, ASME can continue to shape the future of global engineering and innovation. 

Click here for more information on the Judiciary Committee hearing.