Today we can dismiss the notion of "patent hold-up" occurring in wireless SEP FRAND licensing. In spite of extensive searches with powerful magnifying glasses, courts and agencies have found no evidence of it, and neither have academics.
On the other hand, when it comes to the opposite behaviour, "reverse patent hold-up" (also called "patent hold-out"), it's unfortunately widespread.
We received yet another example of this in a recent US International Trade Commission (ITC) ruling in IDC vs Nokia/Microsoft. To begin with, the ITC not only concludes that "There is no evidence of patent hold-up" but also provides a beautifully natural explanation for the general absence of actual patent hold-up in the SEP and FRAND context: "In the current state of IP law as it relates to SSOs and IPRs, an owner of a SEP has a long list of government agencies, law professors, and companies watching what the company does and attempting to change the law as to potential outcomes. [Microsoft] stated they are afraid that if IDC obtained an exclusion order, then they would use it to gain undue leverage and obtain compensation above the FRAND rate. This is unlikely because too many hostile eyes are watching. The fact that ITC has been watching since at least 2011, and not found such a violation, makes it unlikely it would happen here for the first time."
In other words, because patent hold-up is such an obvious and grave concern, there are too many critical and powerful and onlookers to allow it to actually happen.
In other words, because patent hold-up is such an obvious and grave concern, there are too many critical and powerful and onlookers to allow it to actually happen.
On the other hand, for reverse patent hold-up there are clearly too few onlookers. In case after case we see infringers shown to act in bad faith, while comments and discussions on this phenomenon are hardly noticeable. In the above-mentioned case, the ITC concluded that there was again "evidence of reverse patent hold-up" and pointed out that "There is however, one course of action that can clearly demonstrate bad faith, and that is a failure to meaningfully negotiate. ... Other evidence that supports the finding of reverse holdup is the clear gain that occurs daily for [Microsoft]...Each day that the respondents use the patents without taking a license, IDC loses money that it will not be able to recover."
Thankfully, at least some onlookers that really matter in the end - courts and agencies - remain vigilant about reverse patent hold-up.
There are previous examples of similar behaviour and findings as I've discussed in previous posts. For example, such findings may be found in Apple vs. Samsung in the Korean Fair Trade Commission and the US ITC and in Ericsson vs. D-Link in the US Federal Circuit.
It's also important to realize that the phenomenon is not limited to those few companies. Reverse patent hold-up is a globally widespread behaviour, with negative consequences for innovation incentivization and licensing efficiency. It's also a major driver behind SEP divestments and so-called "patent privateering" that FOSS Patents' Florian Mueller has started a campaign against.
So clearly, courts and agencies outside the US need to be as alert and forceful as their US counterparts in properly combating it.