Monday, August 28, 2023

Some Recent Papers on FRAND, Injunctions

The first two were written in collaboration with 4iP Council, so  let's just say the analysis is somewhat more pro-injunction and pro-patentee than I would consider warranted . . . but they're still worth reading, in particular in their discussion of some of the German case law that U.S. readers may not be as familiar with. 

1. Elisabeth Opie has posted a paper on ssrn titled Germany’s Patent Law and High-Tech Strategy 2025: Implications of Recent Amendments to § 139(1) Patent Act for Innovative SMEs, Start-ups and Research Organisations.  Here is a link to the paper, and here is the abstract:

A robust patent protection system is of enormous importance for sustainable innovation. More specifically, companies' financing, commercialisation of their technologies and also their competitiveness depend on it.

 

This paper looks at a sampling of SMEs and research organisations in Germany that help build foundations for further innovation. As illustrated in this paper, German SMEs are very often located in innovation clusters or hubs which are comprised of research organisations, academic sponsors, large and small companies. There are usually led by a team that ensures collaboration across the cluster, access to research, business planning and the promotion of innovation. Innovation clusters, while often having a physical footprint in a specific region, regularly include virtual national and international collaborations. For example, BioRN, the science and business cluster of the Rhine-Main-Neckar region, is one of the strongest biotech hubs in Germany. Covering a region with a radius of 100 km, in which science, industry and government have an ongoing and strong engagement to produce, transfer and create application for life sciences. The cluster recently celebrated its 25th anniversary and currently has more than 130 members: universities, research institutions, ten global pharmaceutical companies (including research and development sites), SMEs, local, regional and federal authorities, the Chamber of Commerce and Industry (CCI) and investors. This impressive line-up explores new ways to transfer results from leading research and academic institutions to industry and local and international markets.

 

It is in this context that this paper examines the extent to which amendments to § 139(1) of the German Patent Act (PatG) regarding protection against patent infringement could have an impact on Germany’s innovation plans.

 

The paper concludes that interpretation of the recent disproportionality defence introduced to the PatG appears in line with the importance of patents and the long-term innovation strategy of successive German governments - currently reflected in the goals of the High-Tech Strategy 2025. Concordantly, it is sustainable, long-term growth of the economy and businesses which reflects the nature of the German SMEs and start-ups - and thus the German economy.

2. Andrés Caturla published a paper titled Licensing of Cellular Standards:  Defining a Willing Licensee in FRAND Negotiations, 39 George Mason L. Rev. 499 (2023).  Here is a link to the paper, and here is the abstract:

 

The unprecedented increase in innovation in the information and communications technology ("ICT") sector experienced in recent years is closely related to the development of cellular standards (2G to 5G). These cellular standards owe their success to the fact that the patented inventions necessary to implement the standards (standard essential patents or "SEPs") are typically licensed on fair, reasonable and non-discriminatory ("FRAND") terms and conditions. Despite the undeniable success of these standards, some U.S. academics and antitrust-law authorities have expressed concerns over SEP owners potentially abusing their dominant position by threatening to use injunctions with the aim to extract excessive royalty rates. On the other hand, there is a growing consensus that injunctions should be granted against SEP users that are proven to be unwilling licensees. This Article will study the extensive insights on the concept of a willing licensee provided by European legal authorities and national courts, which have interpreted and applied the legal framework established by the Court of Justice of the EU ("CJEU") in Huawei v. ZTE. Finally, this Article will explain how, to keep the innovation circle alive, U.S. courts should take a balanced approach as regards the granting of injunctions for SEPs.

3. J.R. Kearl has published a paper titled After eBay: Valid Patents and the Economics of Post-Trial Judicial Options.  Here is a link, and here is the abstract:

The Supreme Court’s eBay decision creates enormous uncertainty about whether the owner of a valid patent has an exclusive right in the face of actual infringement. The Court’s “traditional equitable” criteria for an injunction fail to consider the context where injunctive relief may be warranted: namely, litigation dealing with patents where a jury or court has found the in-suit patent to be valid and infringed and where, barring an injunction, there will be post-trial infringing uses by the defendant. Specifically, it is highly unlikely that a patent holder can show that it will be irreparably harmed or not be made whole, at least in principle, by monetary compensation. In decisions subsequent to eBay, the Federal Circuit has added to the uncertainty by equivocating about whether the holder of a valid patent is entitled to monetary compensation for infringing uses of its patent between the end of a trial and the expiration of the patent if an injunction is not issued.

 

I suggest a simple two-part rule: the prevailing plaintiff is entitled to an injunction unless the infringer can persuade the district court that an injunction will impose social costs that outweigh the benefits of protecting a patentee’s exclusive right to its invention; if the infringer prevails, the patentee is entitled to an ongoing royalty through the life of the patent. This rule adequately protects patent holders’ investment in their patent and avoids the uncertainty created by eBay.

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