New FRAND Scholarship

1.  Alan Devlin has published a book titled Antitrust and Patent Law (Oxford Univ. Press 2016).  Chapter 9, "Manipulation and the Standard-Setting Process," discusses among other things, SEPs, holdup, and FRAND, with a focus on U.S. and E.U. law.  Here is a link to OUP's webpage for the book, and here is the book description:

Patents lie at the heart of modern competition policy. In the new economy, firms use them variously to protect their R&D, to bolster their market positions, and to exclude rivals. Antitrust enforcers thus scrutinize patentees to ensure that they do not use their intellectual-property rights to suppress competition. Today's antitrust lawyers must therefore navigate intellectual-property issues and advise clients on the procurement and assertion of patents. It is no easy task. In granting exclusive rights, patents have an uneasy relationship with competition law, which struggles in turn to apply policies developed in bricks and mortar industries to the world of technology.

This book explores the acquisition and use of patents under the law of the world's two most important antitrust regimes: the United States and the European Union. It examines antitrust rules governing technology transfer, standard-essential technologies, patent aggregation, open and closed systems, coercive licensing terms that amount to misuse, evergreening tactics in the pharmaceutical industry like 'paying for delay', and patentee immunity in suing for infringement. To contextualize that analysis, the book explores the theoretical relationship between patents and competition law, addresses the U.S. 'patent crisis', the move towards unitary patents in Europe, and differences between the US and EU competition regimes. Further, the book explores idiosyncrasies governing the core antitrust questions of market definition, market power, and anticompetitive conduct in the patent setting. In doing so, the book allows those who practice, enforce, teach, or study competition law to understand the subtleties of this fascinating subject.

2.  Damien Geradin has posted a paper on ssrn titled FRAND Arbitration: The Determination of Fair, Reasonable and Non-Discriminatory Rates for SEPs by Arbitral Tribunals.  Here is a link to the paper, and here is the abstract:

At the core of most disputes concerning the licensing of standard-essential patents (SEPs) lies the inability of the SEP holder and the standard implementer to agree on fair, reasonable and non-discriminatory (FRAND) license terms. As an alternative to court litigation, a growing number of academics, agency officials and private practitioners have advocated arbitration of SEP-related disputes, and there is anecdotal evidence that are increasingly relying on arbitration to settle such disputes. The purpose of this paper is to discuss based on the author’s personal experience how arbitral proceedings to set FRAND terms work in practice, as well as the various challenges faced by arbitrators, parties, and counsel involved in such proceedings.

3.  Dae-Sik Hong has posted a paper on ssrn titled A Review of Korean Competition Law and Guidelines for Exercise of Standard-related Patents, 15 J. Korean L. 117 (2015).  Here is a link to the paper, and here is the abstract:  

The purpose and main scope of this paper is to focus on the types of specific conduct with potential issues, the standards for them, and the applicable factors to be considered that were provided with respect to the exercise of patent rights-related technology standards in the Review Guidelines on the Unfair Exercise of Intellectual Property Right (IPR Guidelines), review the methods to identify the types of such conduct and relevance of such proposed standards, and propose alternatives thereto.

This paper concludes with suggestions as follows: Firstly, the Korea Fair Trade Commission (KFTC) will use its guidelines as a primary framework to enforce the Monopoly Regulation and Fair Trade Act (MRFTA) by the KFTC officials even though it has no legislative basis; therefore, it is very important to carefully review its contents. Secondly, in order to regulate non-disclosure of relevant patent technology under the MRFTA, the IPR Guidelines needs to specifically provide that both the intent and effect of the non-disclosure on the standard setting process are required. Thirdly, provisions on imposing unreasonable or discriminatory royalties should be improved to take necessary considerations into account, provide specific factors or standards under the special circumstances where the patented technology is included in a standard. Fourthly, whether procedures for the disclosure of patent information and the ex ante negotiation for licensing terms have been complied with, which are provided as important factors to be considered in judging illegality, does not bear causation or close relationship with the violation of the MRFTA and failure to comply with such procedures should not be considered more seriously than other factors. Lastly, the standard for determining whether an FRAND-encumbered SEP holder’s filing for injunctive relief may be anti-competitive can be considered acceptable compared with the recent practical developments in other jurisdictions.

4.  Koren W. Wong-Ervin, Douglas H. Ginsburg, Bruce H. Kobayashi, and Joshua D. Wright have posted a paper titled FRAND in India on ssrn.  Here is a link to the paper, and here is the abstract:

In the last several years, India has raised several novel and controversial concerns regarding standard-essential patents (SEPs). For example, in 2013 and 2014, the Competition Commission of India (CCI) issued investigation orders against Ericsson, alleging that the company violated its commitments to license on fair, reasonable, and nondiscriminatory (FRAND) terms by imposing discriminatory and “excessive” royalty rates and using Non-Disclosure Agreements (NDAs). In its investigation orders, the CCI stated that “forcing a party to execute [an] NDA” and “imposing excessive and unfair royalty rates” constitutes “prima facie” abuse of dominance and violation of section 4 of the Indian Competition Act, as does “[i]mposing a jurisdiction clause debarring [the licensee] from getting disputes adjudicated in the country where both parties were in business.” Most recently, India’s Department of Industrial Policy and Promotion (DIPP) issued a Discussion Paper on SEPs, which, among other things, expresses concerns about holdup by patent holders while omitting any concerns about holdup and holdout by implementers.

This article analyzes these developments, providing guidance based upon the approach taken by the United States and the Europe Commission. We offer policy recommendations concerning the availability of injunctive relief; the advisability of a one-size-fits all template for standard-development or standard-setting organizations (SDOs or SSOs); the imposition of royalty caps or competition sanctions for “excessive pricing”: the use of NDAs and the “Non Discriminatory” element of FRAND; balancing desires for transparency with needs for confidentiality in licensing; and the use of international arbitration on a portfolio basis as likely the most efficient and realistic means of resolving FRAND disputes.

Update (Friday, Sept. 16):  I see from Professor Danny Sokol's Antitrust & Competition Policy Blog this morning that the Geradin paper noted above is one of several that are published in CPI Antitrust Chronicle's September 2016 issue, titled "Patents and Standards Settings," which you can access from Professor Sokol's blog.  It looks like most though not all of the contributors are people I would associate with the higher-protection side of the debate, but whether you find that position persuasive or not (I generally don't, subject to some qualifications) these papers definitely should be worth reading.