Friday, December 6, 2013

Friday miscellany: Sidak on the meaning of FRAND; Astrazeneca and Stryker damages awards

1.  J. Gregory Sidak has published an article titled The Meaning of FRAND, Part I:  Royalties, in 9(4) Journal of Competition Law & Economics 931-1055 (2013), available here.  Here's the abstract:
What does it mean for a patent holder to commit to a standard-setting organization (SSO) to license its standard-essential patents (SEPs) on fair, reasonable, and nondiscriminatory (FRAND) terms? When is a royalty FRAND? Drawing from both legal theory and economic theory, I propose an interpretation of FRAND that distinguishes and reconciles the conflicting definitions of FRAND and provides courts a practical approach to identifying FRAND royalties. A proper understanding of a FRAND royalty requires recognizing the combinatorial value of standard-essential patents. That recognition reveals the fallacy in attempting to apply the “ex ante incremental value” rule to the determination of a FRAND royalty. FRAND royalties divide the aggregate royalties generated by the standard among the holders of patents essential to the standard. Such a division should maximize the surplus resulting from the standard's creation. It must also satisfy an individual-rationality constraint for the patent holder and the licensee, thereby encouraging continued participation in the setting and implementation of open standards, as opposed to greater reliance on proprietary standards.
At some point next week, this blog will feature commentary on the paper by me and by guest-blogger Professor Norman Siebrasse of the University of New Brunswick Faculty of Law.  

2.  The U.S. District Court for the Southern District of New York on Wednesday awarded Astrazeneca $76 million damages against generic drugmaker Apotex in a pharmaceutical patent infringement case.  Here is a link to the decision, a write-up on the decision from the PatLit blog, and an article from Reuters.  Professor Siebrasse and I probably will both be blogging on this matter as well in the near future; there's an interesting question regarding the meaning of non-infringing alternatives, among other things.

3.  Another very big U.S. damages award ($70 million in lost profits, which the judge trebled, plus attorneys' fees) that just came to my attention was Stryker Corp. Inc. v. Zimmer Inc., No. 1:10-CV-1223, 2013 WL 6231533 (W.D. Mich. Aug. 7, 2013).  Looks like it just recently became available on Westlaw.  Here is a link to a Reuters article about it, and another to a Law360 article.  I'll probably be blogging on this one too after I've had some time to read and digest it.

4.  The blog turns seven months old today.  So far we've had over 20,000 page views.  Thank you readers!

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