FRAND News

1. It has been reported that the EU is preparing to release a draft Regulation that would authorize the EUIPO to, among other things, make mandatory but apparently non-binding FRAND royalty determinations.  I may have more to say about this in due course.

2. Sabine Klepsch has published an article titled Setting the Scene--Anti- and Anti-Anti-Suit-Injuncions in der Praxis der deutschen Patentstreitgerichte ("Setting the Scene--Anti- and Anti-Anti-Suit Injunctions in the Practice of the German Patent Dispute Courts"), GRUR 6/2023, 382-84.  The article discusses Nokia/Daimler, LG München I 2.10.2019 - 21 O 9333/19, aff'd, OLG München GRUR 2020, 379; Conversant/Huawei, LG Düsseldorf 8.9.2020 - 4 b O 79/20; InterDigital/Xiaomi, LG München I GRUR-RS 2021, 3995; and Various Patent Holders v. Xiaomi, OLG Düsseldorf GRUR 2022, 318.

3. Nicholas Round published a post on the Kluwer Patent Blog titled High Court demonstrates again its willingness to set FRAND rate – InterDigital & Lenovo.  For my post last week, see here.

4. Roderick McConnell published a post on IPWatchdog titled A New Path to Truly Fair FRAND Rates with the Cost-Based Approach.  The author writes that "if one knows the average investment over time and the number of potential licensees, then one can calculate the payment per licensee, which guarantees both a good and projectable return on investment and a fair rate for licensees."  He also references an article on the cost-based approach by Professors Gunther Friedl and Christoph Ann, A Cost-Based Approach for Calculating Royalties for Standard-Essential Patents (SEPs), 21 J. World Intell. Prop. 369 (2018), which I have previously noted in a Law360 essay here.

5. Gail Levine and Carmen Longoria-Breen have posted a paper titled SEPs, FRAND, and the Power of Section 5.  Here is a link to the paper, and here is the abstract:

In the modern Internet of Things, our cars, our televisions, and even our door locks and home thermostats rely on internet connectivity standards. As a result, our interconnected world is ever more reliant on standard-essential patents (SEPs), the key patented technologies that underpin critical connectivity standards. That has put some implementers in a bind, as they face patent royalty claims that they feel far exceed a reasonable royalty – and feel compelled by lock-in to pay those royalties.

The Federal Trade Commission has long been a leader in enforcement and advocacy in this space, a role that it proudly continues. Its involvement started with the Commission’s seminal decision in 1996 to bring an enforcement action against Dell for seeking to collect royalties on a standardized patent in a manner that the Commission found harmful to competition. Other enforcement actions followed, as well as major reports addressing competition in high-tech and often-standardized industries. FTC Commissioners also have issued statements on the topic, both together and individually, and the Commission has submitted comments to the International Trade Commission to explain how the analysis for exclusion orders should change when the infringement of a standardized patent is at issue. Notably, the FTC hasn’t invoked only the Sherman Act in its work here. Instead, it has long taken the position that Section 5’s so-called “standalone” provision gives it the power to act in this space where others – including private parties – cannot.

In light of this history of enforcement and advocacy, we believe the FTC may continue to see itself as the steward of this area of the law. To illustrate our point, we look at a recent patent pool price hike and extrapolate a based-on-a-true-story hypothetical: Suppose an SEP holder burdened with obligations to charge only a reasonable royalty for its patents suddenly and without explanation raised the royalty significantly and threatened to seek injunctions against those who do not pay the new rate. We ask whether the FTC may conclude that this would violate the FTC’s standalone Section 5 provision. Based on precedents like the FTC’s N-Data case from 2008, we think it very well could. 

6. Michael Carrier and Brian Scarpelli have published an article in Law360 titled IEEE Patent Licensing Policy Updates Need Clarity.  They argue, inter alia, that the IEEE's recent changes to its IPR policy (see here) "increased ambiguity," but that it "still retains key limits" for example against SEP owners seeking injunctive relief against willing licensees.