Showing posts with label Abuse of Right. Show all posts
Showing posts with label Abuse of Right. Show all posts

Monday, March 23, 2026

FRAND in Japan

As I note in my forthcoming book Wrongful Patent Assertion, in 2014 a Grand Panel of the IP High Court held, in Samsung Elecs. Co., Ltd. v. Apple Japan Godo Kaisha, Judgment of May 16, 2014, 2013 (Ne) 10043, that the owner of a FRAND-committed SEP may abuse its rights by seeking injunctive relief against a willing licensee; and “[i]n a subsequent decision, Imation Corp. Japan v. One-Blue LLC, Tokyo Dist. Ct., Feb. 18, 2015, Case No. 2013 (Wa) 21383, the court held that the defendant (the manager/operator of a patent pool that included some SEPs) had engaged in unfair competition by sending a warning letter to three retailers threatening injunctive relief, because under the Samsung v. Apple decision, the act of seeking an injunction for the infringement of a FRAND-committed SEP against a willing licensee is an abuse of right.  The [latter] decision therefore appears to read Samsung v. Apple as holding that it is an abuse of right per se to seek injunctive relief against a willing licensee for the infringement of a FRAND-committed SEP.  Cf. Yuzuki Nagakoshi & Katsuya Tama, Japan Without FRANDS?  Recent Developments on Injunctions and FRAND-Encumbered Patents in Japan, 44 AIPLA Q.J. 243 (2016) (critiquing Samsung v. Apple for arguably creating such a per se rule and for ignoring, as part of the abuse of rights calculus, the rightsholder’s subjective intent; and proposing that Japanese courts hearing FRAND cases instead consider whether the rightsholder has satisfied its statutory duty to negotiate in good faith).”  Other than these two cases, however, to my knowledge there hasn’t been much any Japanese case law involving FRAND-committed SEPs, until last year when three new district court decisions—all involving the same plaintiff, Pantech Corp.—came out.  Two of these have recently made available in translation on the IP High Court’s website; the third, not yet.  They all appear to agree, however, that it is an abuse of right for the owner of a FRAND-committed SEP to seek injunctive relief against a willing licensee.

The first of the three, Pantech Corp. v. ASUS Japan Co., 2022 (Wa) 7976 (Tokyo Dist. Ct., Apr. 10, 2025), involves Japanese Patent No. 4982653, titled “Method of transmitting and an apparatus for transmitting ACK/NACK information and a method of transmitting and receiving and an apparatus for receiving ACK/NACK signals.”  The court concludes that ASUS’ products infringe and that the claims in suit are valid.  On the issue of remedy, however, the court states that “a FRAND-encumbered standard essential patent holder's act to demand an injunction against a standard essential patent implementer based on the standard essential patent is impermissible as an abuse of right, unless there is a special circumstance where the standard essential patent implementer has no willingness to obtain a license under FRAND terms” (p.25).  After a review of the parties’ negotiating history (pp. 25-30), the court concludes that the defendant was a willing licensee, stating:

the reason for which the Plaintiff and the Defendant failed to reach an agreement on a FRAND rate in spite of prior consultations relating to the abovementioned findings and settlement talks in this lawsuit is that the FRAND rates presented by both parties were far too divergent, as explained in detail later (No. 7). According to both parties' assertions mentioned above and the entire import of oral arguments, the cause for this divergence is considered to be as follows: in major countries in the world, the Unwired Planet v. Huawei judgment, as presented by the Plaintiff, and other court precedents on FRAND rate calculation methods have developed internationally in response to changes of the times; on the other hand, in Japan, there have been no court precedents based on the abovementioned international development for about 10 years following the Apple v. Samsung Grand Panel judgment, and also, even taking into account various circumstances that appeared in this case, a FRAND rate calculation method has not necessarily been established in Japanese business practice (p.31).

Citing article 102(3) of the Japanese Patent Act (on reasonable royalties) and the IP High Court’s 2019 judgment in NeoChemir (see my blog post here), the court then sets out principles for calculating the FRAND rate:

In light of the global nature and the enormous number of standard essential patents implemented in the manufacturing of products conforming to a standard, when determining a FRAND rate, it is necessary [i] to take into consideration a royalty rate set in the actual license agreement for the standard essential patent, or if it is indefinite, a global average royalty rate in the industry; [ii] to presume the individual values of all standard essential patents to be the same because it is practically difficult to find the individual values of the enormous number of patents, and to calculate the value of a single standard essential patent by dividing the value of all standard essential patents by the total number of standard essential patents, while ensuring that the total amount of royalty obtained through aggregation of royalty rates of the standard essential patents remains  within a reasonable scope; and [iii] to also take into consideration, in such a case, possible contributions to sales and profits if all standard essential patents are used in the product. Furthermore, [iv] as a FRAND rate should fundamentally be agreed upon globally as soon as possible through good-faith negotiations between a FRAND-encumbered standard essential patent holder and a standard essential patent implementer, under the literally fair, reasonable, and non-discriminatory terms, a reasonable FRAND rate should be determined by comprehensively taking into account the negotiation process between the parties and the standard essential patent implementer's willingness to obtain a license under FRAND terms, and other circumstances appearing in the lawsuit, from the viewpoint of facilitating the agreement (p.35).

Ultimately, the court calculates a royalty for the one patent in suit by multiplying the sales revenue from the defendant’s products (redacted) by the aggregate royalty burden for LTE-standard-related patents (which the court figures at 9% for LTE products, based on an analysis of findings made in Unwired Planet, TCL v. Ericsson, and Huawei v. Samsung, and 8% for 5G products (p.39)), and then dividing by the number of LTE-standard-related patents (which the court estimates to be 1,300, taken into account likely validity, etc., see pp. 40-41)).  The rate itself is redacted.

The second and third decisions are both actions by Pantech against Google Japan G.K.  I understand that both cases involve the same patent, Japan Patent No. 6401224 (“Method for mapping a physical hybrid automatic repeat request indicator channel”), but different accused products (the Google Pixel 7, since discontinued, and the Pixel 7a, respectively).  In the first of the two, 2023 (Wa) 70501 (Tokyo District Court June 23, 2025), a translation of which is available here, the Tokyo District Court agreed that a FRAND-committed SEP owner’s demand for an injunction “is impermissible as an abuse of right, unless there is a special circumstance where the standard essential patent implementer has no willingness to obtain a license under FRAND terms" (p.39).  The court nevertheless held that Pantech was entitled to an injunction because Google’s conduct during the course of a court-supervised settlement negotiation (occurring in July 2024) demonstrated that Google was an unwilling licensee.  In dicta, however, the court found no fault with Google’s pre-settlement negotiations behavior and thus would not have found Google unwilling on the basis of that conduct alone (see pp. 47-50).  In the second one, however—according to the commentary cited below, since a translation has not been uploaded yet—the Osaka District Court on July 10, 2025 concluded that Pantech was not entitled to an injunction, because Google had shown itself to be a willing licensee through the end date of negotiations the court took into account (November 30, 2023).  The commentaries below do not say anything about the Osaka court actually determining the FRAND royalty, and some more recent commentary indicates that by early January (with other cases involving newer models of Google phones pending) Pantech and Google had settled on global terms, following a recommendation by the Tokyo district court.

For commentary that was helpful in drafting this post, see Masachi Chucho, Pantech v. ASUS: A Recent FRAND Judgment from Japan (available here); Takeshi Komatani, Japan’s First SEP Injunction:  Pantech v. Google and the High Bar for Establishing Unwillingness (available on AIPPI’s website here); and Kenji Tosaki, Takahiro Hatori & Yujiro Fukuhara, The Japanese court first judgment to grant an injunction based on a FRAND-committed SEP (available on Chambers and Partners’ website here; original, longer version available here).   

Meanwhile, as discussed elsewhere (see, e.g., here, here, here, and here), in early 2026 the Tokyo District Court also issued two new documents, Guidelines for Patent Infringement Litigation Based on Standard Essential Patents and SEP Mediation Procedures.  I may have more to say about these in due time.   

Thursday, January 23, 2025

Cotter on Wrongful Patent Assertion and Disproportionality

I have a new paper up on SSRN, titled Wrongfulness as Disproportionality: Toward a Law-and-Economics Approach to Wrongful Patent Assertion, in Proportionality in Intellectual Property Law (Christopher Heath & Anselm Kamperman Sanders eds., Wolters Kluwer, forthcoming)).  Here is a link, and here is the abstract:

Nations throughout the world employ a variety of legal doctrines, including antitrust law, unfair competition law, and the abuse of rights doctrine, among others, to impose consequences for what can be characterized as the wrongful enforcement or assertion of patent rights.  The present essay—to be published in an edited volume of papers presented at the 20th IEEM Intellectual Property Seminar, held in Macau S.A.R. in November 2024 and titled “Proportionality in Intellectual Property Law”—explores how the concept of proportionality might help to inform what constitutes the wrongful assertion of patent rights, with examples drawn from my pending (and more comprehensive) book project, titled Wrongful Patent Assertion:  A Comparative Law and Economics Analysis, under contract with Oxford University Press.  My thesis here is that the various doctrines that constrain the enforcement or threatened enforcement of patent rights can be viewed as efforts to ensure that the effect of the enforcement or threatened enforcement is proportionate to some normative goal.  More specifically, I argue that a necessary (but not, in every context, sufficient) condition for characterizing an assertion of patent rights as wrongful is that the assertion enables the patent owner to obtain benefits or inflict harms that are disproportionate in view of (1) the ex ante or ex post incremental economic value of the patent to the accused infringer; (2) the ex ante probabilistic term of protection of the patent; or (3) the likelihood that immunizing an assertion of the type at issue would undermine the purposes of the patent system or other substantial social interests.  Conceptualizing proportionality in the above sense might provide some guidance in helping to ensure that the legal regulation of patent assertion aligns with broader policy objectives and is consistent with the public interest.

Comments welcome.

Wednesday, November 13, 2024

Last week's conferences in Asia

Last week I gave two presentations in Asia.  On Monday, I presented The Law and Economics of Wrongful Patent Assertion at IEEM (Instituto de Estudos Europeus de Macau)’s 20th Intellectual Property Seminar, “Proportionality in Intellectual Property Law,” in Macau, S.A.R.  The presentation summarized some of my current book project, Wrongful Patent Assertion:  A Comparative Law and Economics Analysis, and I understand that a short paper based on my presentation will be published in a forthcoming edited volume of papers presented at the conference.  Then on Wednesday, I presented Extraterritorial Damages for IP Infringement Under U.S. Law at IEEM’s IP Programme 2024:  Professional Intellectual Property Update, in Hong Kong, S.A.R.  This is a topic I discuss in my other current book project, Remedies in Intellectual Property Law, which will be part of Elgar’s IP law series.  Both conferences were outstanding.  I learned a great deal about developments in Asian and European IP law, including (of particular interest to me in view of book project # 1) the abuse of right doctrine, proportionality and injunctive relief in the E.U., the law of unjustified threats, and unfair competition claims premised on false assertions of IP infringement.  I thank conference organizers Christopher Heath and Anselm Kamperman Sanders, as well as participants including IEEM President Paulo Canelas de Castro, Tianxiang He, Chaho Jung, Kung-Chung Liu, Amandine Léonard, David Llewelyn, Peter Teunissen, Henry Wheare, and HKSAR Director of Intellectual Property David FL Wong.  It was great to see old friends and make some new ones!