This report provides an overview of the current debate over whether a holder of a patent essential to an industry standard, who has promised to license such patented technology on fair, reasonable, and non-discriminatory (FRAND) terms, may nevertheless obtain an injunction from a federal court or an exclusion order from the International Trade Commission against infringing products that implement the industry standard. The report first summarizes several fundamental principles of patent law, then discusses the relationship between standard-setting organizations and FRAND licensing. It continues with an explanation of the role and duties of the International Trade Commission (ITC) and how there are different legal standards that apply to the award of injunctive relief in federal courts and in the ITC. Finally, the report closes with an overview of recent developments relating to standard-essential patents and FRAND licensing that have occurred in several settings, including (1) federal agencies responsible for antitrust enforcement, (2) the ITC, (3) federal courts, and (4) congressional hearings. The U.S. Patent and Trademark Office (PTO) issues a patent to an inventor after PTO examiners approve the submitted patent application for an allegedly new invention. An application for a patent consists of two primary parts: (1) a "specification," which is a written description of the invention enabling those skilled in the art to practice the invention, and (2) one or more claims that define the scope of the subject matter which the applicant regards as his invention. Therefore, these claims define the scope of the patentee's rights under the patent. According to Section 101 of the Patent Act, one who "invents or discovers any new and useful process, machine, manufacture, or any composition of matter, or any new and useful improvement thereof, may obtain a patent therefore, subject to the conditions and requirements of this title." Thus, in order for an invention to qualify for patent protection, it must fall within one of the four statutory categories of patent-eligible subject matter: processes, machines, manufactures, and compositions of matter. However, the U.S. Supreme Court has articulated certain limits to Section 101 of the Patent Act, stating that "laws of nature, natural phenomena, and abstract ideas" may not be patented. Before a patent may be granted, the PTO examiners must find that the new invention satisfies several substantive requirements that are set forth in the Patent Act. For example, one of the statutory requirements for patentability of an invention is "novelty." For an invention to be considered "novel," the subject matter must be different than, and not be wholly "anticipated" by, the so-called "prior art," or public domain materials such as publications and other patents. Another statutory requirement is that the subject matter of an alleged invention must be "nonobvious" at the time of its creation. A patent claim is invalid if "the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains." Finally, the invention must also be "useful," which means that the invention provides a "significant and presently available," "well-defined and particular benefit to the public." The Patent Act grants patent holders the exclusive right to exclude others from making, using, offering for sale, or selling their patented invention throughout the United States, or importing the invention into the United States. Whoever performs any one of these five acts during the term of the invention's patent, without the patent holder's authorization, is liable for infringement. A patent holder may file a civil action against an alleged infringer in order to enjoin him from further infringing acts (by securing an injunction, also referred to as injunctive relief). The patent statute also provides federal courts with discretion to award damages to the patent holder that are "adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer." The usual term of patent protection is 20 years from the date the patent application is filed. At the end of that period, others may use the invention without regard to the expired patent. The U.S. Court of Appeals for the Federal Circuit ("Federal Circuit") is a specialized tribunal established by Congress that has exclusive appellate jurisdiction in patent cases. Parties dissatisfied with the Federal Circuit's rulings may petition the U.S. Supreme Court to review the appellate court's decision. However, the Supreme Court is not required to entertain the appeal; it has discretion to decide whether to grant certiorari to review the case. Products in the information technology (IT) industry usually incorporate many component parts that could be subject to hundreds or thousands of patents, "with no one company holding all the [patent] rights necessary to manufacture a product." Commentators indicate that the IT sector is mired in what they call a "patent thicket," meaning a "dense web of overlapping [patent] rights that a company must hack its way through ... to actually commercialize new technology." According to many observers, the set of potentially relevant patents for any IT product is overwhelming due to both the number of (overlapping and possibly invalid) patents granted in this area and the number of components incorporated in each product. Smartphones, tablets, and other wireless devices comprise many patented technologies that are made to comply with a large number of industry standards that relate to cellular communications, wireless Internet connectivity, and video and audio compression technology. An "industry standard" is a set of technical specifications that provides a common design for a product or process. Standards sometimes arise through government action (such as the Federal Communications Commission) or through the operation of the marketplace (such as a large majority of consumers that choose one product over another). However, private industry groups called standards setting organizations (SSO) or standards developing organizations (SDO) have long been active in promulgating standards for their members. Many technology companies are members of dozens of standards bodies. Standards bodies and their members have increasingly encountered claims that a patent covers an industry standard. If the patent is valid and enforceable, it is possible that the standard cannot be employed without infringing that patent. Industry standards potentially bring economic benefits ranging from a broad range of interoperable products to more robust, competitive markets. In turn, patent rights may promote innovation, the disclosure of new inventions, and technology transfer. Conflicts between industry standards and patent rights require a careful weighing of these competing interests. Many standards bodies have established disclosure and licensing polices to attempt to preempt the potential conflict between industry standards and patent rights. Although these policies vary, they generally require that members of the standards body (1) disclose patent rights that are pertinent to a proposed standard and (2) license the patented invention that is essential to an adopted standard to others, often on "reasonable and nondiscriminatory" terms, a standard commonly known as "RAND licensing" or "FRAND licensing" (some policies call for fair, reasonable, and nondiscriminatory terms). FRAND commitments "facilitate the bilateral licensing of patents that are needed to allow a standard to become successful and to provide assurances to implementers of the standard that the patented technologies will be available to those willing and able to license them." However, SSO policies often do not provide a specific royalty rate for a FRAND license nor do they define what would be considered "reasonable" license terms. As the Federal Trade Commission has observed, "No court has yet directly addressed the definition of FRAND, but a manufacturer that believes a patentee's license offer is unreasonable may raise the issue in a contract dispute." SSO policies regarding FRAND also do not apply or bind patent holders that are not participating in the standard setting process. In the information technology (IT) industry, "products use industry standards to ensure interoperability, necessitating that manufacturers license technology that is essential to the standard." Standard-essential patents (SEPs) are those patents that disclose and claim one or more inventions that are required in order to implement a particular industry standard. SEPs that are subject to a promise by the patent holder to license the technology on FRAND terms will often be referred to in this report as "FRAND-encumbered SEPs." One federal court has explained SEPs and FRAND licensing as follows: Standards are important for several reasons. First, they facilitate the adoption and advancement of technology as well as the development of products that can interoperate with one another. Standards also lower costs by increasing product manufacturing volume, and they increase price competition by eliminating "switching costs" for consumers who desire to switch from products manufactured by one firm to those manufactured by another. They also lead to earlier adoption of new technology. There is, however, one downside to standards: they create "essential patents." The term "essential patents" refers to patents that are essential to a standard – i.e., patents that claim technologies selected by a standards development organization ("SDO"). Once a patent becomes an essential patent, it gains undue significance as a result. Companies that produce products governed by a standard become "locked in" to the technologies included in the standard. Customers have no practical choice other than to buy products that comply with the standard. Thus, the owners of essential patents gain market power.... "FRAND commitments" are intended to prevent owners of essential patents from acquiring too much of the market power that would otherwise be inherent in owning an essential patent.