FTC Invokes Novel Theories In Standard-Setting Case

On January 23, 2008, the Federal Trade Commission announced it had entered into a consent decree with Negotiated Data Solutions LLC ("N-Data") to settle a complaint against the company for repudiating a prior commitment to license users of its computer communications technology. The commitment had been made to induce a standard-setting organization to adopt the technology in its standard. Issues involving intellectual property in the standard-setting process are an area the agency has monitored very carefully; this action is another example of that scrutiny.

The FTC's complaint alleges two separate violations of Section 5 of the FTC Act: (1) that N-Data engaged in unfair methods of competition and (2) that N-Data engaged in unfair acts and practices The complaint, which the FTC approved by a 3-2 vote with Chairman Deborah Platt Majoras and Commissioner William Kovacic dissenting, is a rare use of the