New Papers on FRAND

1.  Dennis Carlton and Bryan Keating have posted a paper on ssrn titled Rethinking Antitrust in the Presence of Transaction Costs:  Coasean Implications.  Here is a link to the paper, and here is the abstract:

This article analyzes the implication of transaction costs for antitrust analysis and explains why the usual antitrust analysis can be misleading as a guide to consumer or society welfare because it assumes that pricing is linear and uniform. The article shows how the relevant transaction costs can be altered by conduct subject to antitrust review, such as loyalty discounts or merger, and thereby influence the pricing mechanism used. When conduct alters the pricing mechanism, a correct antitrust analysis must account for the consequences of that pricing on improved efficiency. The paper summarizes the results of merger simulations using nonlinear pricing to further illustrate the potential errors from ignoring the use of nonlinear pricing. Finally, the paper discusses how coalition formation, viewed through the lens of cooperative game theory, can identify those situations that might give rise to the creation of market power. The paper then applies the analysis to several topics of current antitrust interest including exclusive dealing, the conduct of credit card companies, and the setting of fair reasonable and non-discriminatory (FRAND) royalty rates for standard essential patents.

On the FRAND issue in particular, the authors' view is that FRAND commitments can be viewed as a means for preventing incumbent manufacturers from raising rivals' costs, because the nondiscriminatory aspect of the commitment prevents a subset of existing manufacturers from conditioning the inclusion of a given patent in a standard on the patentee's agreement to charge later entrants a higher rate.  Carlton and Allan Shampine have made a similar argument here.  

2.  Rajendra Kumar Bera has posted a paper on ssrn titled Standard-Essential Patents (SEPs) and ‘Fair, Reasonable and Non-Discriminatory’ (FRAND) Licensing.  Here is a link to the paper, and here is the abstract:

FRAND-encumbered SEP owners find themselves in a complex situation because fetters are put on their limited period freedom to exclude others from making, using, selling or offering to sell, and importing the claimed invention in the country of grant. In this paper we discuss some of the issues involved in FRAND-encumbered SEP licensing and their possible solutions. In particular we suggest that SEPs be treated as a separate class of patents of national importance in patent acts for which specific rules are framed for dealing with injunctions; the creation of a SEP tribunal that would decide how best contemporary public interest would be served with minimal FRAND commitments; and government intervention in the form of “march-in” rights on behalf of all those in need of the SEP in question to prevent a potential or real economic crisis from arising due to a lack of sufficient number of licensees or acts of discriminate licensing by SEP owners, to keep the market competitive. 

3. Paul Kossof has posted on ssrn an abstract of a forthcoming paper, to be published in the European Intellectual Property Review, titled Developments in Chinese Anti-Monopoly Law: Implications of Huawei v. Interdigital on Anti-Monopoly Litigation in Mainland China.  Here is the abstract:

The recent case of Huawei v. InterDigital has been closely followed by the international legal community due to its relation to litigation in the United States as well as its implications for intellectual property holders and licensees. This article analyzes this important case and its potential effects on anti-monopoly litigation in Mainland China.

4.  Benjamin Bai also recently published an interesting post titled To Be or Not To BE SEPs on the Kluwer Patent Blog, here.  The post discusses in some detail the Huawei case as well as another Chinese case, Hon Hai v. Ge Fang, in which the Jiangsu High Court held that an asserted utility model was not standard-essential, and affirmed the grant of an injunction for its unauthorized use.