A patent ambush occurs when a member of a standard-setting organization, while participating in development and setting a standard, withholds information about a patent that they or their company owns, has pending, or intends to file (and which is relevant to the standard), and the company subsequently asserts that it is infringed by use of the standard as adopted.
Standards-setting organizations, such as the IEEESee IEEE Standards Association and ANSI, typically require each member of their standard-setting committees to file letters with them that either deny knowledge of company patents that are relevant to the standard, or identify the patents they do know about. When an organization is advised of relevant patents, it will often either seek to use a different technology for the standard, or obtain a commitment from the patent owner that it will license users of the standard on fair reasonable and non-discriminatory (FRAND) terms.
Once the proposed standard has been adopted, companies wishing to implement the standard may be forced to pay substantial royalties to the patent holder, creating barriers to entry that distort competition within the market. Consequently, the practice has been considered to be in breach of antitrust or competition law in the United StatesSee, for example, FTC Challenges Patent Holder's Refusal to Meet Commitment to License Patents Covering 'Ethernet' Standard Used in Virtually All Personal Computers in U.S. (FTC press release about its suit against N-Data, 23 Jan. 2008); FTC Charges Unocal with Anticompetitive Conduct Related to Reformulated Gasoline: Complaint Alleges Company Gained Monopoly Power by Defrauding the California Air Resources Board and Industry Groups During Phase 2 Gasoline Rulemaking (FTC press release about its suit against Union Oil Co., 4 March 2003). See also Broadcom Corp. v. Qualcomm Inc. (4 Sept. 2007 opinion of Third Circuit holding that deceptive conduct in the standard-setting process can constitute actual or attempted monopolization). and the European Union and has resulted in several lawsuits and other actions.
In the United States, a patent ambush may involve the filing of a continuation application with claims targeting a standardHerbert J. Hovenkamp, Patent Continuations, Patent Deception, and Standard Setting: the Rambus and Broadcom decisions, University of Iowa Legal Studies Research Paper (June 2008), page 6, first paragraph. or the exploitation of a submarine patent, that is, a patent application which has been filed but has not yet been made public years after the filing.Stacy Baird, "The Government at the Standards Bazaar", 18 Stanford Law & Policy Rev. 35, 82 n.138 (2007) (noting that "the risks of assault on a standards-setting proceeding are most notably that of the imposition of a "submarine patent" or of patent royalty "hold up" risks".
See also Essential patent, a patent which is essential for implementing e.g. a standard Patent misuse Patent thicket
References
Further reading Brian Dean Abramson, "The patent ambush: misuse or caveat emptor?, IDEA: The Intellectual Property Law Review, Vol. 51 No. 1, 2011, pp. 71-109.