LESI: new faces and yet more to come from FRAND
The licensing of standard-essential patents (SEPs) is a hot topic in 2018. With many ongoing court proceedings there are expected to be further highly relevant decisions from the US, the UK and Europe.
In a recent communication, published in November 2017, the European Commission also took a stand in the fair, reasonable and non-discriminatory (FRAND) debate.
Standardisation of technology is beneficial for the consumer as it serves the need to have compatible devices in certain areas of technology. Predominantly it’s the telecommunications industry debating FRAND topics, but other industry sectors also rely on standardisation.
The flipside of the coin of proprietary standardised technology is the potential to force companies out of the market or to discriminate against them by effectively denying them access to the standard. The SEP owner therefore submits a FRAND commitment to the standard-setting organisation (SSO), ie, declaring that third parties will be given access to the technology at FRAND conditions.
The FRAND commitment is thus, above all, an obligation to grant licence-seekers access to standardised proprietary technology. The recent developments show more clearly how these conditions can be defined and how—inside and outside the court room—parties shall apply these principles.
In the past year we have seen first instance decisions from the US and the UK. These decisions differ in the approach to FRAND in comparison to the current case law from continental Europe, especially in Germany. This year will show how the appeal proceedings are decided. Further, the German Federal Court of Justice will be deciding on FRAND topics.
In January, the Shenzen Intermediate Court issued an injunction in favour of Huawei against Samsung and evaluated the negotiations between the parties on the basis of a good faith approach, which seems to be closer to the continental Europe decisions.
The US approach
In the US the TCL v Ericsson decision by Judge James Selna has been much discussed. The subject of the proceedings were Ericsson’s 2G, 3G and 4G portfolios.
Ericsson and TCL signed a 2G licence agreement in 2007. The negotiations on 3G and 4G licences failed. When the 2G licence was about to expire, TCL filed an action based on the allegation that Ericsson’s offers were not FRAND.
In the proceedings, Selna did not deal with the question of whether and when a per-unit royalty offer is FRAND. The general approach Selna took was to simplify the matter in various aspects, thereby deviating from the particularities of the facts of the case and the negotiation history for practical reasons.
