IEEE's reaccreditation by ANSI draws allegations of US antitrust law violations

03 March 2021 00:00 by Khushita Vasant


The Institute of Electrical and Electronics Engineers’ reaccreditation by the American National Standards Institute has stirred controversy, with a group of companies alleging the standards body systematically concealed patent disclosures and that ANSI enabled it, in violation of antitrust laws, MLex has learned.

ANSI is a non-profit that coordinates US standards and accredits standards groups such as the IEEE.

In June 2020, ANSI announced that it launched a reaccreditation process for IEEE, as IEEE had submitted revisions to its existing bylaws. ANSI’s Executive Standards Council approved the reaccreditation request in late November 2020.

Ericsson, InterDigital, Orange SA, Fraunhofer and GTW Associates have raised concerns over the decision, which will "adversely" affect them and "creates uncertainty" about the open nature of IEEE's standards, the companies said in a Feb. 26 letter to Anne Caldas, secretary of ANSI's Executive Standards Council.

— Negative letters of assurance —

The conflict stems from the emergence of negative "letters of assurance" or LOAs issued by some companies that hold patents essential to a standard. When an SEP holder issues a negative LOA, it means they aren’t willing to license their technology under IEEE’s patent policy.

In last week's letter and an appeal brief spanning more than 50 pages — a copy of which MLex has seen — the companies allege that ANSI and IEEE colluded to conceal the negative LOAs IEEE received.

"Allowing IEEE to conceal negative LOAs undermines the ability of American National Standards users to learn or assess each patent holder’s disclosed licensing terms and conditions," the appeal said.

"Colluding with IEEE to withhold such licensing-related information introduces market restraints that are not implemented in furtherance of a legitimate collaboration, strategic alliance or joint venture between ANSI and IEEE," it added.

The companies say this stems from an annex included in IEEE's original reaccreditation application in June 2020 but not disclosed or opened for public comment. ANSI's November 2020 decision to reaccredit IEEE, however, was made after considering the annex. In fact, the existence of the annex came to light only when the decision to reaccredit IEEE was announced. The annex grants the IEEE an exemption from complying with ANSI's rules on "Essential Requirements: Due process requirements for American National Standards 2020," the appeal said.

As such, the companies emphasize that they are "directly and materially" interested parties who have been or "will be adversely affected" by IEEE's reaccreditation. The reaccreditation creates uncertainty about the open nature of IEEE standards, the appeal said.

"There is no basis for an exemption" from complying with the Essential Requirements rules, the appeal said, adding that the non-disclosure of negative LOAs by IEEE "creates a concrete problem for ANSI and the integrity of American National Standards, as well as stakeholders, users of standards, and the market."

Of all the negative LOAs that IEEE received after a controversial patent policy change in 2015, Orange submitted 22 in September 2015, Ericsson submitted three in September 2015 and June 2016, and InterDigital submitted two in May 2019, the appellants said.

The LOAs were for IEEE's standards 802.11md and 802.11, 802.11a, 802.11g, 802.11n, 802.16, 802.16a, 802.11ax and P.190. IEEE did not publish any of these LOAs, the appeal brief said. The appellants develop, test, distribute or operate products that implement these wireless standards.

The appellants call for a stay and reversal of the November 2020 reaccreditation.

— Antitrust considerations —

In support of reversing the reaccreditation, the appeal cites a September 2020 letter to IEEE from Makan Delrahim, former assistant attorney general at the US Department of Justice's antitrust division, in which he pointed out that a significant number of negative LOAs were submitted with respect to IEEE standards (see here).

The companies called for these negative LOAs to be submitted to ANSI, where IEEE has sought to have its standards approved as American National Standards. The negative LOAs also should be submitted wherever IEEE has already received an approval by ANSI for any of its standards, they said.

The appeal cautioned that ANSI and IEEE both risk "disrupting the proper functioning of the licensing mechanism of the market," including royalty assessment, and "potentially being condemned under the antitrust laws."

"The annex results in ANSI falsely advertising certain IEEE standards as American National Standards on which there are undisclosed LOAs as if they complied with the ANSI's Essential Requirements, which likely violates U.S. consumer protection and antitrust law."

ANSI's Essential Requirements state that American National Standards are to be developed in accordance with applicable antitrust and competition laws, and meetings among competitors to develop them are to be conducted in accordance with these laws, the appeal brief pointed out.

"However, as noted earlier, the systemic concealment of [reasonable, and non-discriminatory, or] RAND, disclosures at IEEE is likely inconsistent with antitrust law," it added.

Jana Zabinski, spokeswoman for ANSI, confirmed to MLex that an appeal was filed with the ANSI Executive Standards Council. The appeal will be processed in accordance with the applicable procedures. "ANSI does not comment on pending appeals," she said.

— IEEE's patent policy —

The DOJ, under former US President Barack Obama, gave a favorable review to the IEEE for its patent policy changes in 2015 after dozens of major tech companies, including Apple, Microsoft and Intel, urged the approval (see here).

New Jersey-based IEEE, which sets key Internet and Wi-Fi standards, controversially changed its patent-rights policy in 2015 to limit the ability of licensors to seek injunctions on SEPs (see here). The change was vociferously opposed by large patent holders such as Qualcomm and Ericsson and resulted in efforts to reverse the policy (see here, here and here). In the 2015 business review letter, the DOJ green-lighted the IEEE's update and said the changes wouldn't harm competition.

Business review letters are issued by the DOJ to offer an opinion on the possible legality, or illegality, of an organization's planned conduct. They are often used by groups to ask questions about potential joint conduct and have been used by several standards bodies to ensure the DOJ’s antitrust division is on board with proposals related to intellectual property.

In a self-acknowledged “extraordinary step” in September 2020, Delrahim supplemented the 2015 letter because it was “repeatedly and widely misconstrued and misapplied,” and asked IEEE to consider updating its patent policy.

IEEE has since found itself at the center of an intensifying dispute, with some company executives arguing that “IEEE's policy is fine the way it is,” while others argue for a change in what is a “closed and unbalanced” system (see here, here and here). Chipmaker Qualcomm’s co-founder Irwin Jacobs wrote to the IEEE late last year about the “continuing imbalance in the patent policy” of the IEEE and strongly recommended the body “now change course."

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