Wednesday, December 5, 2018

Some New Papers, Posts on FRAND Issues (Part 3)

1. Richard Stern has published a paper titled TCL v Ericsson:  US Court Determines Top-Down FRAND Royalty Rate for SEPs and Insists on Similar Percentage-of-Sale-Price Payments for High and Low Priced Devices, 40 E.I.P.R. 557-69  (2018).  Here is the abstract:
In TCL v Ericsson a district court issued a second major US FRAND judgment endorsing the "top-down" methodology and rejecting the "bottom-up" methodology for determining SEP royalties. The court also required substantially equal percentage-of-sales-price royalty payments for large and small competitors, and for upmarket and downmarket sellers alike, to satisfy FRAND’s nondiscrimination requirement. The court’s top-down approach may neutralise a trend among owners of large SEP portfolios to split up and diffuse their SEPs among many "privateers" in order to inflate total royalty payments. 
2. Gregory J. Werden and Luke M. Froeb have posted a paper on ssrn titled Why Patent Hold-Up Does Not Violate Antitrust LawHere is  a link, and here is the abstract:
Owners of standard essential patents (SEPs) are cast as villains for engaging in “patent hold-up,” i.e., taking advantage of the fact that they negotiate royalties with implementer-licensees that already have made sunk investments in the standard. In contrast to “patent ambush,” patent hold-up involves no standard-setting misconduct or harm to any competitive process, and thus cannot violate antitrust law. Commentators taking a contrary positions confuse the ends of antitrust law with its means. Antitrust law promotes consumer welfare only by protecting competition. Casting aside this core principle would expose business decisions, including ordinary price setting, to judicial oversight. Commitments made by SEP owners in the standard-setting process, however, should be enforced, and they are enforced. Without an antitrust cause of action, implementers invoke the powers of the courts to resolve royalty disputes over SEPs.
3. Kelce Wilson has posted a paper on ssrn titled Designing a Standard Essential Patent (SEP) Program, 53 les Nouvelles 202 (Sept. 2018).  Here is a link, and here is the abstract:
Standard Essential Patents (SEPs) are a unique form of intellectual property rights (IPR), due to various considerations that can notably impact their value and usage options. Some of these considerations include:
1. Potentially simplified infringement case, when litigated;
2. Easily-detectable potential infringement, to facilitate drafting claim charts prior to litigation discovery;
3. Readily-identifiable potential infringers, to facilitate identifying targets for an enforcement program;
4. Possibly global licensee pool, to financially incentivize multi-national prosecution;
5. Potentially limited enforcement options, such as a potential unavailability of an injunction;
6. Potentially limited royalty rates, due to (fair) reasonable and non-discriminatory ((F)RAND) limitations; and
7. Affirmative commitments to license SEPs on FRAND terms in some standards setting organizations (SSOs).
8. Disclosure obligations of related patents and applications in some SSOs.
Some helpful, excellent articles explain advantages for organizations in certain industries pursuing SEPs as part of a patent portfolio. Described herein are some issues to consider when designing a SEP program for patent portfolio growth.
4.  Also of interest are recent posts (1) by Raymond Millen and Jan Schnitzer on the IAM Blog titled The EPO should rule on SEPs, say top European auto patent players (more specifically, the proposal is for the EPO to decide on whether patents declared essential are in fact essential; the EPO wouldn't be making FRAND determinations); and (2) on the IPKat and World Intellectual Property Review, both discussing a recent session at AIPPI 2018 titled Standard Essential Patents--Maximizing Value Before Enforcement.

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