Tuesday, September 6, 2016


1.  Inika Charles published an August 16, 2016 post on the Spicy IP Blog titled Ericsson’s offer of SEP terms to TCL held to adhere to FRAND standards by U.S Court.  The post discusses a recent order of the U.S. District Court for the Central District of California (Selna, J.), in a dispute between Ericsson and TCL.  (I tried finding the order on Lex Machina and didn't succeed, but I think I found the order in question on Westlaw as 2016 WL 4150033--though on Westlaw it's dated July 25, not August 1 as stated in the blog post.)  Anyway, the district judge ruled, first, that Ericsson didn't violate the nondiscriminatory aspect of its FRAND commitment by offering TCL only essential patents and not certain nonessential implementation patents that were licensed to other companies.  Judge Selna also held that Ericsson wasn't engaging in double dipping by bundling together 2G, 3G, and 4G patents, even though Qualcomm had licensed the 3G patents and sublicensed them to TCL, as long as TCL was only paying for the 2G and 4G patents.  A jury will determine whether the terms of Ericsson's offer and Ericsson's overall conduct were "fair."  

The post also states that the judge dismissed TCL's argument that the court is bound by an arbitration panel's determination that an offer Ericsson made to Huawei was discriminatory.  I don't see any mention of this in the order available on Westlaw, so maybe there is a subsequent August 1 order that discusses this issue but isn't up on Westlaw or Lex Machina yet.

The author also notes Ericsson has an infringement suit pending against TCL in the Eastern District of Texas, and briefly discusses some of Ericsson's litigation in India.
2.  Thomas Musmann and Henrik Timmann published a September 1, 2016 post on the Kluwer Patent Blog titled Trolls Get Ease on Collaterals Under German Procedural Law.  The post discusses a June 21 decision of the German Federal Supreme Court (available here--I haven't read it yet myself, though) holding that an NPE/owner of purported standard essential patents was a resident of the E.U., and thus was not obligated to post security for costs, where the plaintiff had a registered address in Ireland.  According to the authors (emphasis in original):
Irrespective of the registered domicile, which was not decisive for Sec. 110 ZPO, all places where effective management might be present (domicile / office of the first managing director or domicile / office of the second managing director) were located within the EU. . . .  The decision leaves a number of questions unanswered, in particular how much responsibility needs to be borne inside the EU/EEA in cases where part of the management is domiciled outside. But the decision certainly alleviates the burden for any plaintiff, in particular for NPE’s, when they try to establish a cheap and simple domicile just for litigation purposes.
3.  Bristows' Clip Board Blog published a short post recently titled FRAND in Finance discussing the European Commission's acceptance of "legally binding commitments from the International Swaps and Derivatives Association Inc. (ISDA), a trade organisation in the market for over-the-counter derivatives, and Markit, a financial information service provider, to license their IP on fair, reasonable, and nondiscriminatory (FRAND) terms."  The post links to the Commission's press release, which states that:
In July 2013, the Commission raised concerns that ISDA, Markit and some of its member investment banks breached EU antitrust rules by:
  • refusing to license the Final Price for exchange trading,
  • subjecting the Final Price to a Use Agreement which contains restrictions for its use for exchange-traded products or transactions and
  • refusing to licence the CDX and iTraxx indices for exchange trading.
This may have blocked or delayed the emergence of an effective, safer and cheaper market for exchange traded credit derivatives, which would have reduced the bid-ask spreads imposed by CDS dealers and thus the costs of trading. . . .
The main elements of the commitments are:
  • both ISDA and Markit will exclude CDS dealers from taking individual licensing decisions and prevent them from influencing such decisions.
  • ISDA will license its rights in the Final Price for the exchange trading on fair, reasonable and non-discriminatory (FRAND) terms.
  • Markit will license its rights in the iTraxx and CDX indices on FRAND terms for exchange traded financial products based on the indices it owns.
The commitments will apply for ten years, during which ISDA and Markit's compliance will be monitored by independent trustees. In addition, both sets of commitments are subject to third-party arbitration in case of dispute. The commitments will facilitate access to essential price data and indices for CDS exchanges and exchange products. It will also facilitate access for investors whose statutes may oblige them to trade on regulated venues only.

The post and the press release aren't clear on what the underlying IP rights are, though perhaps the information can be gleaned from documents available on the Commission's webpage for the case. I'm guessing they might be rights under the E.C. Database Directive.   

Hat tip to Norman Siebrasse for bringing these last two matters to my attention.

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