Hernández on Judicial Extraterritoriality

As I have mentioned a few times now on this blog, Professor Tim Holbrook and I are coediting the Oxford Research Handbook on Extraterritoriality and Intellectual Property Rights, an edited volume that will bring together contributions from 40+ scholars from around the world to address both the many prescriptive and adjudicative jurisdiction issues pertaining to the assertion of IP rights—including patents, of course, but also copyright, trademarks, and trade secrets.  In addition, the week after next I will be presenting “On the Law and Economics of Extraterritoriality and IP Rights,” based largely on my own draft chapter for the edited volume, at this year’s IEEM Intellectual Property Seminar, “Patents and (Extra) Territoriality:  Longarm Jurisdiction, Comity, and (Contributory) Infringement,” held in Macau S.A.R. on November 4.  I also am preparing a separate paper from the one I am writing for the Oxford edited volume, for inclusion in an edited volume that I understand Professors Christopher Heath and Anselm Kampelman Sanders will be preparing following the Macau conference.  (While in Asia, I also will be speaking on the U.S. Supreme Court’s recent case law on indirect infringement and the current state of U.S. law on unjust enrichment awards in trade secret litigation, at the Professional Intellectual Property Update 2026 in Hong Kong on November 5.)

Anyway, in view of my current interest in territoriality and IP rights, I was pleased to come across a recent paper by Francisco Hernández Fernández, titled “Judicial Extraterritoriality, TRIPS Article 1.1 and the Competitive Governance of Global SEP Licensing,” which he presented recently at the Max Planck Institute in Munich.  Here is a link to the paper on ssrn, and here is the abstract:

Standard-essential patent (SEP) licensing exposes a structural tension between territorial patent rights and global technology markets. This paper examines how WTO dispute settlement is emerging as a forum for addressing the cross-border effects of judicial measures governing SEP licensing. It argues that the interpretation of Article 1.1 of the TRIPS Agreement in China – Enforcement of Intellectual Property Rights (DS611) supports a limited anti-frustration principle: WTO Members must not adopt measures that materially frustrate another Member’s TRIPS-compliant protection and enforcement system. The paper distinguishes this principle from a general prohibition on adjudicating disputes involving foreign patents and tests its possible extension to non-consensual worldwide FRAND determinations in the pending China – Worldwide Licensing Terms for Standard Essential Patents (DS632) dispute. Comparing this approach with EU and German competition law, it identifies a jurisdictional asymmetry: effective enforcement can support licensing negotiations, while judicial measures in one jurisdiction may disable enforcement options elsewhere. Changes in bargaining leverage, however, do not by themselves establish competitive harm. The paper proposes complementary safeguards through transparency under Article 63, consultations under Article 40.3, domestic controls against abusive enforcement, and consensual dispute resolution. It concludes that coordination among existing institutions offers a more credible response than centralized global rate-setting, while recognizing the institutional fragility of appellate review through the Multi-Party Interim Appeal Arbitration Arrangement.

I am inclined to agree with the paper’s measured interpretation of the arbitration award in DS611, as well as its call for the development of "best practices on FRAND calculation aspects" and “comprehensive guidelines to ensure that national courts adhere to similar approaches or methodology,” which is consistent with a recent piece by Lord Justice Richard Arnold that I noted here.  The paper also highlights the inherent tension between the German approach to SEP matters, which emphasizes the availability of injunctive relief as a means for inducing private parties to reach global settlements, and the anti-frustration principle articulated in DS611.  It also briefly mentions the UPC's Fujifilm v. Kodak decision (see discussion on this blog here and here), though not the CJEU's BSH decision, both of which would be in some tension with an expansive reading of DS611 (see p.13).

AIPPI Q293: Compulsory Licensing

Compulsory licensing is a topic I briefly discuss in my book Remedies in Intellectual Property Law at pages 235-49, so I was interested when I recently came across a piece in a recent issue of GRUR Int. by Fabian Hoffmann, Wolrad Prinz zu Waldeck und Pyrmont, Niclas Gajeck, Jérôme Kommer, Hendrik Meier, and Carsten Paga, titled AIPPI-SQ 293 – Compulsory Licensing for Patents – the State of Play from a German Perspective, 75 GRUR Int. 409 (2026).  Here is the abstract:

Compulsory licence law – though not often applied in practice – has played a decisive role in the historical development of patent law. Compulsory licences function as an ultima ratio instrument utilized only when patents are not used, when they obstruct crucial innovation, or when the public interest requires the use of the patented technology, especially in the field of public health. Despite this fundamental role, the law governing compulsory licences lacks harmonization on both the European and international level. Such harmonization is desirable to provide for a globally aligned, fast and efficient system. AIPPI Study Question 293 on compulsory licences aims to foster future harmonization in this area. AIPPI collected the responses of 38 national groups, published a summary report, and ultimately adopted a resolution on compulsory licences on 16 September 2025 in Yokohama. This article presents the key responses of the German national group of AIPPI to the study. It outlines the history, legal basis and fundamental case law of compulsory licensing in Germany. Further, it analyses the grounds and scope of compulsory licensing under German law and then discusses current issues relating to the compulsory licensing system, such as sublicensing and compulsory licences for patent applications or for products that are intended for export. The article concludes with insights on the determination of reasonable remuneration and an economic analysis of the impact of compulsory licensing.

As the article states, it is based to some extent on the German national group’s response to AIPPI Study Question 293.  The article is very readable and thorough in its discussion of the relevant history, German statutory provisions, and case law on the topic.  As the authors note, there is only one case since 1949 in which the German Federal Supreme Court has approved a compulsory license granted under article 24 of the German Patent Act (previously noted on this blog here).  The German Patent Court's subsequent determination of the applicable royalty in that case (see brief mention on this blog here) is helpful in setting forth the factors to consider in setting the amount of the compulsory licensing royalty—essentially, as the authors put it, terms reflecting what “reasonable parties would have agreed on in a licence agreement,” probably on the basis of the “abstract licence analogy” (i.e., largely the same sort of factors that would be relevant in an infringement case).  The authors argue that if the patent owner is a practicing entity that has been exploiting its invention as a monopolist, this would weigh in favor of an increase over the typical rate.

Regarding the AIPPI Study Question, all 38 responses, plus AIPPI’s resolution and its summary of responses, can be found on AIPPI’s website.  (From www.aippi.org, go to “Library,” then type “Q293” into “Search Our Library”.)  I haven’t read all of these yet myself, but my initial take is that the U.S. response takes an unduly dismissive attitude toward compulsory licensing, even as a response to public health emergencies.  Toward the beginning it states that the U.S. does not have compulsory licensing of patented inventions as such, but that “in very narrow specific situations, compulsory licensing-like rights may be available,” citing the possibility of march-in rights under the Bayh-Dole Act (to date, never used); a provision of the Clean Air Act (ditto); ongoing royalties in lieu of injunctive relief under eBay; and 28 U.S.C. § 1498.  This last is a statute that authorizes the federal government to take a nonexclusive license to any patented invention in exchange for fair market value, and actually is used with some frequency.  (For discussion, see this KEI Briefing Note by Jamie Love and Lokesh Vyas).  The U.S. report also does not mention court-ordered compulsory licensing as a remedy for certain antitrust violations, but it has been employed in some antitrust cases, as discussed in this 2004 article by (of all people) Makan Delrahim (who also notes a couple of other federal statutes that authorize compulsory licensing of patented inventions under limited circumstances).    

OxFirst Webinar on the Munich SEP Guidelines

OxFirst will be putting on a free webinar next Tuesday, October 21, at 1:30 p.m. U.K. time, titled “Putting Economics at the Center:  Munich's New SEP Guidelines.”  Here is OxFirst’s description:

On 13 August 2026, the 7th Civil Chamber of the Munich I Regional Court issued new FRAND Guidelines that move well beyond injunctions and negotiating conduct. The Court sets out in unusual detail how it intends to approach the economics of FRAND, including comparable licences, royalty ranges, top-down calculations, portfolio strength, patent counting, geographic differences and economic evidence.

 

For patent litigators, the implications are immediate. Which comparables will withstand scrutiny? How should portfolio strength be proved or challenged? And what economic evidence will now be needed to persuade the Court that a proposed royalty is, or is not, FRAND?

Speakers include Dr. Oliver Schön, Presiding Judge, Munich I Regional Court; Chris Longman (Qualcomm); Dr. Corin Gittinger (Freshfields); Dr. Clemens-August Heusch (Nokia); Scott Hayden (Amazon); and Andrew Yen (Panasonic).  Registration is available here.