A state of flux: the Huawei v ZTE FRAND framework


Christa Brown-Sanford

A state of flux: the Huawei v ZTE FRAND framework

Professor25 / iStockphoto.com

Despite the European Commission’s intervention, standard-essential patent owners and standards implementers will need to look to the courts for additional developments and guidance in the area of FRAND licensing, says Christa Brown-Sanford of Baker Botts in the US.

In November 2017, the European Commission issued its Communication on Setting out the EU approach to Standard Essential Patents (SEPs), adding more pieces to the Huawei v ZTE (2015) application framework puzzle. The Huawei case outlined the circumstances in which seeking injunctive relief in patent disputes over SEPs would constitute an abuse of the SEP owner’s dominant position in violation of article 102 of the Treaty on the Functioning of the European Union (TFEU).

While the Commission’s report sidesteps addressing some of the most contentious issues regarding the availability of injunctive relief for holders of SEPs, it does clarify how SEP owners and standard implementers can comply with their respective duties under the Huawei framework. In its discussion of creating a predictable enforcement environment for SEPs, the Commission’s report touches on five key areas: the bilateral nature of Huawei obligations; the requisite level of detail for offers and counter-offers; the timeliness of a response to an offer; the magnitude of security and damages; and the propriety of offering portfolio licences for SEPs.

Significantly, the Commission’s report does not address the appropriate methodology for the determination of market dominance, applicability of the framework to cases pending before the Huawei decision, or any confidentiality issues which may arise out of the Huawei requirements.

ZTE, Huawei, FRAND, standard essential patents, licensing, market competition, patent disputes, European Commission, Baker Botts, bilateral obligations