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If a patent holder promotes the adoption of a certain industry standard, giving the false impression that the standard can be practiced freely, can he later sue or demand royalties from companies that adopted the standard?

2/16/2017

 
In at least one case, the Federal Circuit found that those companies who adopted the industry standard had acquired an implied license to practice the patent.  See Wang Labs., Inc. v. Mitsubishi Electronics America, Inc., 103 F.3d 1571. 1580 (Fed. Cir. 1997).  If the rule were otherwise, an entire industry could be lured into adopting some standard by Company X, only later to be faced with claims of patent infringement by the same Company X.

What if Company X and Company Y collude?  For example, what if Company X encourages the entire industry to adopt some industry standard, while Company X knows all the while that practicing this standard would infringe Company Y's patent?  Company Y may just be some relatively unknown shell company (e.g., a non-practicing entity) which was formed for the sole purpose of holding title to this patent.  When Company Y finally comes forward and threatens to sue the entire industry for practicing its patent, Company X may take the posture that it has absolutely no connection or nexus with Company Y.  Without a connection or a nexus to link Company X to Company Y, it will probably be a lot more difficult for any court to find relief for companies that adopted the industry standard.


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