Do the Potentially Conflicting Rulings in the Ericsson/Lenovo Dispute Suggest Need for a Global FRAND Tribunal?

This will be a short post about a very complex topic, namely the ongoing global FRAND litigation between Ericsson and Lenovo.  A recap of that litigation, which includes U.S. proceedings in the Eastern District of North Carolina and the ITC, preliminary injunctions against Lenovo entered by courts in Brazil and Colombia, and a pending action in the Patents Court for England and Wales, can be found in the Federal Circuit’s October decision (excerpted here), which remanded for the North Carolina court to determine if Lenovo is entitled to an antisuit injunction, as well as in the November 19, 2024 decision of Mr. Justice Richards (Patents Court for England and Wales) denying Lenovo’s request for  declaration concerning a Short-Term License (not previously mentioned on this blog, but discussed on ip fray here).  So far, what we know is that (1) Office of Unfair Import Investigations (which assists the ITC) has advised he ITC that Ericsson’s offer was within the FRAND range; and (2) as noted above, courts in Brazil and Colombia have awarded Ericsson preliminary injunctive relief; but (3) the Federal Circuit concluded that an ASI might be appropriate, because the North Carolina action could be dispositive of the claims before the South American courts, though it will up to the North Carolina court to decide if the other relevant considerations, including comity, weigh in favor of an ASI; and (4) most recently, the Patents Court rejected Lenovo’s request for a declaration that a willing licensor and licensee would enter into a Short-Term License on terms to be decided by that court.  In this last decision, the court  distinguished Xiaomi’s successful request for a declaration that a willing licensor in the position of Panasonic and a willing licensee in the position of Xiaomi would agree to an interim license (previously discussed here), reasoning that although it is not necessarily an essential factor that both parties commit (as they previously had, in Panasonic), to abide by a U.K. FRAND determination, the fact that only one party (Lenovo) had made such a commitment here was a factor suggesting that the “utility” of such a declaration would be lacking; and that overall the court lacked the necessary “high degree of assurance” that Ericsson is acting in bad faith or that its offers have been supra-FRAND.  So the bottom line is that it’s possible that a U.S. court will grant an ASI, while the English court will not (and in my view should not, on the facts) grant a declaration that would function as something like an imperfect substitute for an ASI.  Meanwhile, the parties have been negotiating for years.

As I wrote in my contribution to the German FRAND Cases edited volume:

Some sort of global tribunal, as envisioned by Professor Contreras,  or mandatory global arbitration, as envisioned by Lord Justice Arnold,  might seem to be a better solution, to the extent it could provide a quick, competent, uniform, and country-independent system for processing SEP royalty disputes.  To be sure, the obstacles to establishing such a system, including the need to develop a common FRAND methodology and other ground rules, are immense,  but they are not necessarily insurmountable.  Whether policymakers will ever undertake to surmount them, much less succeed in doing so, may be the most important SEP-related question of the decade.  

That doesn't necessarily mean that the EC's Draft SEP Regulation is the solution (and it may well be stalled, see here), but can't we do better than the current piecemeal, forum-shopping-infested approach?

For further discussion of the Federal Circuit's decision regarding the ASI, see articles or posts by Jorge Contreras, Curtis Dodd and Chris Dubuc, and  Jeremiah Helm and Sean Murray.