LES 2015: SEP licensors urged to wear ‘white hat’ during talks

Companies seeking to license standard-essential patents (SEPs) should “wear a white hat and appear to have been fair”, an industry conference has heard.

John Paul, partner at law firm Finnegan, Henderson, Farabow, Garrett & Dunner, suggested innovators “build a clear record” of what they have done to show they have been acting in good faith.

He was speaking in a personal capacity yesterday, October 28, at the LES 2015 Annual Meeting in New York, noting that his views should not be attributed to his firm or clients.

The session covered issues surrounding the licensing of SEPs on fair, reasonable and non-discriminatory (FRAND) grounds.

Paul noted that there are “lots of moving parts in all of this” and the landscape is becoming more complex and sophisticated.

Traditionally the US has been at the forefront of developments in this area, but regulatory bodies in other countries including China, India, Korea and Japan have started proposing regulations on the setting of standards for FRAND licensing, Paul said.

“There is a lot of activity around the world.”

In the EU, the Huawei v ZTE decision by the Court of Justice of the European Union earlier this year is widely seen as creating “a very balanced view”.

He explained some of the rules outlined in the decision. For example, injunctions are only available if the licensee fails to engage in discussions and, if so, that party must post a bond, which is a “very significant tool”, Paul said.

More generally, he offered some tips on how to approach licensing. When considering what might be a good-faith proposal, innovators should listen to their existing licensees and licensing specialists, warning that if “everyone says you’re out of line, it’s you against the world”.

Paul ended by saying that the landscape is changing, there are lots of issues to consider, and the case law is evolving.

The LES 2015 Annual Meeting finished yesterday, October 28.