Context:
- Just before the summer break, the European Commission’s (EC) Directorate-General for Competition (DG COMP) issued a comfort letter to an Automotive Licensing Negotiation Group (ALNG) (July 9, 2025 ip fray article) and has doubled down on that concept in a draft revision of its technology transfer guidelines (October 4, 2025 ip fray article). LNGs are highly controversial (March 6, 2025 ip fray article on statements by Avanci and Ericsson; October 9, 2025 ip fray interview with Via LA President Heath Hoglund).
- Judicial overreach in the form of imposing FRAND (fair, reasonable and non-discriminatory) licensing terms on standard-essential patent (SEP) holders is facing blowback such as from the Unified Patent Court (UPC) and the Munich I Regional Court (October 3, 2025 ip fray article).
- This week, the United States Department of Justice (USDOJ or DOJ) filed a Statement of Interest in a Disney v. InterDigital case, clarifying that seeking SEP royalties and enforcing SEPs is not, in and of itself, an antitrust violation under U.S. law (October 6, 2025 ip fray article).
What’s new: Today was the second day of a conference organized by the European University Institute’s (EUI) Centre for a Digital Society (CDS) and the European Telecommunications Standards Institute (ETSI) on “SEPs in light of recent European policy developments” (conference program as PDF). The DOJ’s Antitrust Division’s Deputy Assistant Attorney General Dina Kallay was the keynote speaker in the afternoon. She explained the constitutional purpose of and rationale behind the Statement of Interest in Disney v. InterDigital. In response to one question from the audience, Ms. Kallay made it clear that LNGs are illegal buyers’ cartels, and answering another (which came from ip fray), she emphasized the territorial nature of patents and noted that judges “should just issue judgments for patents within their borders.”
Direct impact & wider ramifications:
- The Deputy AAG’s position on LNGs was unmistakably clear. She said it was “hard to reconcile [the] comfort letter with sound principles of competition law on either side of the Atlantic,” which makes it difficult to imagine that the Trump Administration would allow an ALNG or any other LNG.
- Her reference to non-tariff trade barriers that would result from jurisdictional overreach and reminder that “[the Trump] Administration takes trade law very seriously” shows that the UK approach to global rate-setting could lead to transatlantic friction as ip fray already warned earlier this year (February 2, 2025 ip fray article).
Due to the effects of the current U.S. government shutdown, the Deputy AAG was not able to deliver the keynote speech personally in Italy, but she joined by video and even stayed on for the panel after her speech just to listen.
1. EU surprised U.S. by issuing ALNG comfort letter “without any meaningful notice or discussion” — “an unfortunate development”
The question from the audience about ALNGs was primarily about whether ALNGs were lawful from a U.S. perspective, but the way it was summarized by the moderator was more general. Deputy AAG Kallay ultimately answered it both at a high level and also took a clear position on the illegality of LNGs under U.S. antitrust law.
She started her answer with the following sentence:
It took me by surprise, that letter.
While competition enforcers on both sides of the Atlantic normally have a relationship of trust, this one came down “without any meaningful notice or discussion.” Ms. Kallay doesn’t know why, but finds it “concerning and unusual.”
Equally unusual in her view is the fact that there was initially only a press release, with the actual letter not becoming available until much later (“highly unusual … when you announce something, you would share it”). Also, “it seemed to not have a market definition” and to be “driven by “mopre of a trade law, national champion kind of move” (such as a European automotive plan) than a competition law matter. The DOJ’s view is that it’s competition that makes companies stronger.
Ms. Kallay found it “hard to reconcile this comfort letter with sound principles of competition law on either side of the Atlantic.” Already at the beginning of her answer to the question about LNGs, she referred the audience to the September 9, 2019 Statement of Interest by the United States in Global Music Rights v. Radio Music License Committee (PDF), in which the DOJ “gave a full breakdown of why buyers’ cartels are illegal [she also said ‘as illegal as sellers’ cartels’] and harm competition.”
2. Courts exceeding national jurisdiction to set global FRAND rates could create non-tariff trade barriers that the Trump Administration would not tolerate
ip fray asked how the Trump Administration views a certain tendency by courts in some jurisdictions to force SEP holders to enter into global FRAND license agreements on the terms set by a single court.
The Deputy AAG started by recalling that “patents are territorial in nature” and said:
“We have a UPC, but we don’t have a Global PC.”
She said U.S. courts adhere to the principle of comity, and “courts generally should not exceed their jurisdiction.” They should “just issue judgments for patents within their borders.”
“To do it differently could lead to situations where you have non-tariff trade barriers,” Ms. Kallay continued. “Judges and can try and change trade balances. That’s obviously something that would not be tolerated, and you’ve all seen that this Administration takes trade law very seriously.”
3. Statement of Interest in Disney v. InterDigital
For those who have already read the recent Statement of Interest or a summary, there was nothing surprising in today’s presentation, but it was interesting to hear that the third part (Noerr-Pennington) was the most important one in her view.
She drew parallels to laws in other jurisdictions, including but not limited to the EU, Germany and Brazil. Generally, the right to seek redress for infringement in court is protected, and in the U.S. this means, as she explained, that only fraud or sham litigation could have legal consequences. Ms. Kallay said that bringing litigation, including the pursuit of injunctions, is not automatically an antitrust violation: “It takes more.”