Federal Circuit Reverses Judgment Awarding Extraterritorial Damages

The case in Trustees of Columbia University v. Gen Digital Inc., precedential opinion by Judge Dyk (joined by Judges Prost and Reyna), published this morning.  This is a very complicated matter, involving among other things an inventorship dispute that devolved into a contempt order against trial counsel for the defense (which contempt order is reversed in a separate appellate decision also handed down today, which I need not address here), as well as two previous appeals on claim construction and validity (which I also will not address).  The current decision involves questions of patent eligibility, claim construction, and damages; and as is my typical practice for purposes of this blog, I will focus only on the last of these.

There are two patents in suit, both of which related “primarily to protecting computer systems from viruses and other malicious activity” (p.2).  The claims at issue consist of one system claim, two method claims, and a computer-readable medium claim, all of which allegedly are infringed by software marketed by the defendant under the Norton brand.  The district court denied a motion to dismiss for lack of patent eligibility.  Then jury then returned a verdict of willful infringement and awarded damages of $185,112, 727; the district court awarded enhanced damages and fees.  On appeal, the Federal Circuit reverses and remands for further proceedings on the issue of patent eligibility--but “[b]ecause other issues may arise on the remand,” the court addresses one remaining issue of claim construction as well as the issues pertaining to damages and fees.  As noted, I will address the damages and fees issues only.  The most interesting of these—at least in my view, since I’ve written a fair amount now about this topic—is whether, on the facts of this case and assuming the patents in suit are valid, the patentee is entitled to damages reflecting foreign sales of Norton software.

As readers may be aware, the general rule that seems to be emerging from Supreme Court, Federal Circuit, and district court case law over the last few years is that, although U.S. patents are territorial rights, if the defendant engages in the unauthorized manufacture, use, or sale of patented products in the United States, and this domestic infringement causes-in-fact and proximately causes either (1) the plaintiff to lose sales that the plaintiff would have made to foreign customers, or (2) the defendant to make sales abroad that the defendant otherwise would not have made, the plaintiff is entitled to recover, respectively, either its own lost profit on its lost foreign sales, or a royalty reflecting some portion of the profit the defendant would have expected to earn from the defendant's foreign sales, as of the date of the hypothetical ex ante bargain.  In view of this precedent, the district judge gave the jury the following instruction:

Columbia is entitled to damages based on sales to customers located outside of the United States if you find that the infringing product sold to those customers was made in or distributed from the United States, even if the infringing product is delivered to a customer and used by the customer outside the United States (p.23; emphasis added by the Federal Circuit).

The jury found that the defendant (referred to throughout the opinion as “Norton”) sold antivirus software abroad, and that “the infringing product” was made in or distributed from the United States.  (The jury did not find that the sales to foreign customers “substantially occurred in the United States,” (p.24 n.7)).  The appellate panel nevertheless agrees with Norton that “no reasonable jury could conclude that any infringing copies of Norton’s software that were sold to customers outside the United States were made in the United States or distributed from the United States” (p.24). 

This seems correct to me under the governing standards for determining what an infringing software product is, principally Microsoft Corp. v. AT&T Corp., 550 U.S. 437 (2006).  As the panel explains:

Microsoft establishes that software in the abstract—that is, software not physically encoded in a “tangible copy” like a CD or hard drive—is akin to a “blueprint” or “a schematic, template, or prototype.” Id. at 449–50. If someone abroad builds an infringing product based upon a blueprint that exists in the United States, for example, then the product was still made abroad. See id. at 442. So too, software is not tangible—or capable of infringing the asserted claims—until tethered in a particular copy of the software encoded in a computer-readable medium (p.25).

Applying this principle:

The system claim, ’322 patent, claim 27, includes a “processor.” Like the apparatus claim at issue in Microsoft, this claim is not infringed until a particular instance of software is installed onto a computer with a processor. See Centillion Data Sys., LLC v. Qwest Commc’ns. Int’l, Inc., 631 F.3d 1279, 1288 (Fed. Cir. 2011). Because the instances of software sold to customers located abroad are not installed on a computer in the United States, those instances were not made in or distributed from the United States.

 

The same conclusion follows as to the other claims asserted here. A method claim is only infringed when the claimed process is performed; it is not infringed by the mere existence of software that, if installed on a computer, could perform the method. See Ericsson, Inc. v. D-Link Sys., 773 F.3d 1201, 1219 (Fed. Cir. 2014). Because the infringing software is only capable of performing either of the claimed methods once installed on a computer, the versions installed abroad also cannot give rise to domestic infringement. In any event, “[t]here is no established recognition in patent law of direct infringement by ‘making’ a ‘method.’” See Brumfield, 97 F.4th at 879. The methods here were not “made” in the United States nor “distributed” from the United States.

 

This leaves only claim 11 of the ’322 patent, the computer-readable medium claim. Columbia argues that this claim must be treated differently, because it does not require that a particular version of software be first installed on a computer with a processor to be infringing. It is true that claim 11 does not require software to be installed on a device with a processor, but claim 11 does still require that the software be encoded in a particular “non-transitory computer-readable medium.” ’322 patent, claim 11. While a non-transitory computer-readable medium may be created on a server in the United States, that medium is not exported abroad. The computer-readable media sold to foreign customers are only created once the foreign computer encodes the software on its hard drive, which occurs outside the United States. These computer-readable media are—like the apparatuses in Microsoft—created outside the United States and therefore cannot be domestically infringing. Under the logic the Court applied in Microsoft, these cannot constitute infringing products that were made in or distributed from the United States (pp. 25-26).

Columbia tries a few additional arguments on appeal, but none of them work.  The one that might have worked, had it been presented at trial, was that “the jury could have found that the domestic infringement involved in creating its master copies, which enabled the foreign sales, were the cause of the foreign sales damages. However, the jury was not instructed, and Columbia did not seek an instruction, that they could grant a reasonable royalty for foreign sales based on this theory. We cannot reform the damages theory actually presented to the jury in favor of an alternative that was not, even if the alternative would have been legally valid. . . . We thus need not reach the question of whether Columbia’s theory of foreign damages was proper under the causation theory of Brumfield.” (p.25).  My initial reaction is that that theory probably wouldn’t have worked either, because the causal connection between the domestic manufacture of the master copies and the foreign sales is too tenuous to satisfy proximate causation, though I would want to know more about the underlying facts to assert that opinion with confidence.  (Alternatively, if the domestic manufacture of the master copies could have been outsourced, then in my opinion outsourcing should count as a noninfringing alternative, and any royalty awarded for the resulting foreign sales should reflect only the cost saving, if any, of domestic over foreign manufacture of the master copies.  Whether the courts would agree with me on this remains to be seen.)  The appellate court also rejects arguments that Norton could be liable as a joint infringer with the foreign customers, or that Norton could be liable under an inducement theory (pp. 27-28).

As for willfulness and enhanced damages, the court affirms the finding of willfulness, primarily on the basis of evidence that Norton was aware in advance of “‘the Columbia professors’ designs and work before the patents issued’ including the provisional application,” and the lack of evidence that, during the relevant time period, Norton was aware of and acted upon its subsequently asserted objectively reasonable defenses (pp. 21-22).  The court nevertheless vacates the district judge’s enhancement of actual damages (2.6 times the actual damages) and the award of attorneys’ fees, in part because the amount awarded and the finding of exceptionality were based on the vacated finding of contempt of court.  In addition, the case was close (on patent eligibility) and Norton’s assertion of allegedly “repetitive” arguments did not amount to litigation misconduct.

Federal Circuit Authorizes Royalty Calculation Based on Nonpatented Articles

I’ve been busy the last several days reviewing the page proofs for my forthcoming book, Wrongful Patent Assertion:  A Comparative Law and Economics Analysis (Oxford Univ. Press 2026), which is due out in late spring or early summer.  Now that I have some time to resume blogging, I’ll start by discussing a short (but precedential) Federal Circuit decision from last Friday, Exafer Ltd. v. Microsoft Corp. (opinion by Chief Judge Moore, joined by Judges Taranto and Stoll).  It presents an interesting question relating to damages calculation. 

Exafer owns two patents in suit relating to “systems and methods for optimizing communication paths between virtual network devices by controlling data forwarding rules at intelligent switches” (p.2).  Exafer claims that “Microsoft’s Azure Platform, and specifically the Azure Smart Network Interface Cards (SmartNICs) and Virtual Filtering Platform (VFP) Fastpath technology (Accused Features),” infringe the two patents.  Exafer’s damages expert Mr. Blok was prepared to present an opinion concerning the hypothetical royalty the parties would have agreed to ex ante, using as the royalty base the value of certain noninfringing virtual machines (VMs).  The theory is that Microsoft’s use of the patented technology enabled “Microsoft to reduce the central processing unit (CPU) usage in Azure servers, freeing up CPU cores to host additional VMs” (p.6); and that the value to Microsoft of using the patented technology is therefore the revenue derived from hosting those additional VMs.  The district court agreed with Microsoft’s argument that it was impermissible to use the noninfringing VMs as the royalty base, but the Federal Circuit reverses and remands.

I think the Federal Circuit got it right, though I can understand the appeal of Microsoft’s argument that the royalty should not be calculated using the value of some other, noninfringing product.  (Going back in time, one might perceive a similar perspective in cases such as Zenith Radio Corp. v. Hazeltine Rsch., Inc., 395 U.S. 100, 135 (1969), which held that setting royalty rates on the basis of the licensee’s sales of unpatented products constituted patent misuse (while also holding that, if the licensee is not coerced into taking unwanted patents, but instead agrees for convenience to take a portfolio of patents, the arrangement is not misuse).)  The premise that the royalty must be related to the use of the patented technology is of course correct, but I think the Federal Circuit is right in finding a sufficient causal connection between that use and the increase in the number of VMs Microsoft can host; and as long as the revenue derived from that increase is a type of benefit that Microsoft would have anticipated ex ante, it stands to reason that the amount Microsoft would have been willing to pay ex ante would have reflected that expected benefit.  This is essentially the court’s view, as I read it:

[Exafer’s technical expert] Dr. Congdon opined that the network optimization and efficiency improvements achieved by the claimed inventions “would translate to, among other benefits, the ability to operate more virtual machines on a single CPU or host (i.e., increasing virtual machine density). Accordingly, by increasing virtual machine density, Microsoft would be able to sell more virtual machines without the need for additional network infrastructure.” . . . Mr. Blok’s VM-hour royalty base captured this incremental benefit of being able to offer additional VMs due to operation of the Accused Features within the Azure Platform. . . . This methodology is tethered to the patented invention and does not expand Exafer’s patent monopoly to unpatented technology. Mr. Blok’s testimony therefore satisfies the admissibility standards of Rule 702 (p.8).

Put another way, as long as the additional revenue associated with hosting more VMs was, ex ante, a foreseeable consequence of the use of the patents in suit, a willing licensee would have taken that added benefit into account in determining how much it was willing to pay for a license.  By contrast, requiring that the royalty be limited to the immediate benefit of the use (perhaps the cost savings associated with reduced CPU usage for purposes of powering the Azure platform, without any consideration of the next-best use of those otherwise idle CPUs) strikes me as a formalistic constraint lacking in economic substance.  That said, if the actual benefit derived ex post from freeing up some of the CPUs were of a type that would not have been foreseeable ex ante, then it should be excluded from consideration; but that is not my understanding of the facts here.

The case does make me think about the connections between the hypothetical bargain construct; the situations in which it might be rational for courts to make use of ex post information (which Norman Siebrasse and I wrote about a few years back); and the doctrine of proximate cause, which limits damages to those that are, inter alia, foreseeable.  I may have more to say about this in a future post.

Herr, Alymov & Nothmann on Whether the UPC Can Set Global FRAND Rates

Jochen Herr, Nikita Alymov, and Martin Nothmann have published an article titled Can the UPC set global FRAND rates?, 1/2026 GRUR Patent 18-24.  Here is the abstract:

The Unified Patent Court (UPC) is emerging as a key forum for SEP and FRAND disputes, yet its authority to set FRAND rates remains only partly defined.  This article examines whether, and under what conditions, the IPC may determine global FRAND rates focusing on procedural hurdles such as the party disposition principle, judicial discretion, territorial scope and the Huawei/ZTE compliance.  Furthermore, a recent order by the Local Division Paris confirms jurisdiction for counterclaims but leaves critical questions unresolved including whether stand-alone FRAND rate-setting actions are admissible beyond counterclaims in infringement actions.  This article will shed light on how the UPC’s evolving role could reshape licensing practices and forum selection.

The authors begin with a brief survey of FRAND determinations (or non-determinations) in Germany, the U.K., the U.S., and China, before taking on the principal topic of whether the UPC has competence to engage in FRAND rate-setting.  As noted in the abstract, in October 2025 the Paris Local Division in Sun Patent Trust v. Vivo concluded that it had jurisdiction to consider Sun Patent Trust’s request that the court, as an incident to Sun’s infringement claim, whether its offer was FRAND or if not.  (That order is now before the UPC Court of Appeal.  As the authors note in the body of the article, the request is not technically a counterclaim, notwithstanding the description of it as one in the above abstract; and it is fairly limited in what it says, to wit "The claimant has merely anticipated the so-called 'FRAND defence' that the defendant is raising against this type of infringement action. This FRAND defence falls within the jurisdiction of the UPC, according to a consistent UPC CFI caselaw which indicates that the FRAND issue can be dealt with incidentally by the UPC . . . . [A] discussion of FRAND terms, at least as a defence raised by VIVO at the time of the statement of defence, will undoubtedly follow, as anticipated by both parties. In the present case, all facts and arguments relevant to the determination of FRAND terms, whether admissible or not, will have to be debated by the defendants.")  The article then discusses the UPC’s decisions in Panasonic/OPPO and Huawei/Netgear, both of which concluded that they were competent to consider a FRAND rate-setting counterclaim, but did not actually do so after finding the implementers to be unwilling licensees.  The authors also discuss the possibility of stand-alone FRAND rate-setting actions in the UPC, but describe it as “problematic” in view of the various legal and practical obstacles that would have to be overcome.  

EU Requests WTO Panel to Determine Legality of Global FRAND Determinations in China

February was an unusually busy month for me, and my week-long bout with COVID didn't help, so I am behind schedule in blogging about recent events of relevance to the world of patent remedies.  One of the biggest of these was the European Union’s announcement on February 12 that it would be requesting the establishment of a WTO panel to determine whether China’s practice of establishing global FRAND royalties without consent of both parties violates the TRIPS Agreement.  The request for establishment of a panel in DS632 China-Worldwide Licensing Terms for Standard-Essential Patents is available here, and the EU's brief summary of the case here.  The WTO site for the case is here.

As previously noted on this blog, in January 2025 the EU instituted consultations with China concerning the issue of global FRAND royalties.  In addition, in July 2025 the EU prevailed in its other WTO dispute with China (DS611-Enforcement of Intellectual Property Rights), concerning China’s antisuit injunction policy, when an arbitration panel (assembled in the absence, for several years now, of a functioning WTO appellate body) concluded (contrary to the initial panel decision) that that policy violated TRIPS articles 28.1 and 28.2 as read in light of article 1.1, because it “frustrate[d] the exercise of the exclusive right of a patent owner to prevent the use of the subject of its patent without its consent” and “alter[ed] the negotiating position of SEP holders in a fundamental way.”  Much the same logic is expressed in the EU’s current request, along with additional reliance on Paris Convention 4bis (which is incorporated by reference into the TRIPS Agreement).  In particular, the EU argues that the challenged measure (of setting global FRAND rates without consent of both parties) violates the following:

Article 28.1, read in conjunction with Article 1.1, first sentence, of the TRIPS Agreement, because China's measure has as its effect to restrict the ability of the owner of a non-Chinese patent to exercise the exclusive rights conferred on it by other WTO Members under Article 28.1 of the TRIPS Agreement, i.e., to prevent third parties not having the patent owner’s consent from making, using, offering for sale, selling, or importing the patented product.

 

Article 28.2, read in conjunction with Article 1.1, first sentence, of the TRIPS Agreement, because China's measure has as its effect to restrict the ability of the owner of a non-Chinese patent to meaningfully exercise its right to conclude licensing contracts, as conferred in the territory of other WTO Members under Article 28.2 of the TRIPS Agreement, by freely negotiating and concluding licensing contracts for the non-Chinese patents.

 

Article 4bis of the Paris Convention (1967), as incorporated into the TRIPS Agreement by virtue of Article 2.1 of the TRIPS Agreement, because China’s measure undermines the principle of territoriality and restricts the possibility for the parties subject to a decision rendered in China to start or continue proceedings before the courts of the WTO Member that granted the non-Chinese patents, and thus for the courts of that WTO Member to adjudicate actions relating to those patents in their respective jurisdictions.

Two obvious points to note.  One is that, although the EU is challenging China’s policy only, it would seem that if the EU’s position turns out to be sound, the U.K.’s policy of establishing global FRAND rates without consent of both parties would be equally vulnerable.  Second, if the EU’s position on Paris Convention 4bis is sound—and there is language in DS611 that is consistent with that position, as I noted here—wouldn’t that place the CJEU’s decision in BSH v. Electrolux in jeopardy as well, to the extent that decision appears to contemplate that courts in EU member states may adjudicate patent infirngement claims arising under non-EU member state law (as discussed, e.g., here and here?)   

Judge Albright’s Order in BMW v. Onesta

As noted on this blog previously (see here and here), in December Judge Alan Albright (W.D. Tex.) issued a temporary restraining order, later converted into a preliminary injunction, ordering U.S. patent assertion entity Onesta from adjudicating claims against BMW for the infringement of U.S. patents in the Munich Regional Court.  On February 13, the judge issued his written order explaining his reasoning.  The order is available on Westlaw (2026 WL 474871) and from other sources, such as Pacer.

By way of background, one year ago the Court of Justice for the European Union issued its decision in BSH v. Electrolux.  In that case, the owner of a European Patent filed an action in Sweden, against a defendant domiciled in Sweden, for the infringement not only of the Swedish part of the patent in suit, but also for the infringement of the corresponding parts validated in nine other European Patent Convention (EPC) member states--including at least one (Türkiye) which is not an EU member.  One of the questions presented was whether the Brussels Regulation Recast conferred exclusive jurisdiction over a Turkish court in respect of the part validated in Turkey.  The court held that it did not, but rather that the Swedish court may adjudicate both the infringement and validity of the Turkish part, although the validity ruling would apply only inter partes (in other words, the effect of the ruling would not be to nullify the Turkish part as against the world).  In reaching this conclusion, the court stated that

. . . the court of the Member State in which the defendant is domiciled which is seised, as in the case in the main proceedings, on the basis of Article 4(1) of the Brussels I bis Regulation, of an infringement action in the context of which the issue of the validity of a patent granted or validated in a third State is raised as a defence, does have jurisdiction to rule on that issue if none of the restrictions referred to in paragraphs 63 to 65 of the present judgment is applicable, given that the decision of that court sought in that regard is not such as to affect the existence or content of that patent in that third State, or to cause its national register to be amended.

 

. . . As the Advocate General observed in point 62 of his Opinion of 22 February 2024 and as the parties to the main proceedings and the European Commission stated at the hearing on 14 May 2024 before the Court, that decision has only inter partes effects, that is to say, a scope limited to the parties to the proceedings. Thus, where the issue of the validity of a patent granted in a third State is raised as a defence in an action alleging infringement of that patent before a court of a Member State, that defence seeks only to have that action dismissed, and does not seek to obtain a decision that will cause that patent to be annulled entirely or in part. In particular, under no circumstances can that decision include a direction to the administrative authority responsible for maintaining the national register of the third State concerned (paras. 74-75).

The court’s reasoning does not, at least explicitly, appear to hinge on the “third State” being a party to the EPC, and thus could be cited in support of the Munich court’s jurisdiction to adjudicate claims for the infringement of a U.S. patent in an action filed against a company (like BMW) domiciled in Germany.  Then again, as Judge Albright notes in his order, the BSH “decision never expressly grants long-arm authority to divest U.S. courts of jurisdiction to enforce U.S. patents.”  Fair enough.

In any event, in granting the ASI, Judge Albright goes through the Fifth Circuit’s test for granting an ASI, which is largely similar to what other U.S. circuits require.  First, it is undisputed that the parties to the U.S. and Munich actions are the same, and the U.S. action (BMW’s action for a declaratory judgment of patent misuse, noninfringement, and invalidity) would dispose of the relevant issues in Munich.  Second, the Munich action would “frustrate a policy of the forum issuing the injunction” or, alternatively, would “cause prejudice or offend other equitable principles.”  In this regard, he writes that “[a]llowing the Munich proceedings to continue threatens the United States' policy interest in adjudicating its own patents and protecting litigants' jury rights in infringement cases. Similarly, proceedings in the Munich court necessarily deprive BMW of critical defendant rights available only here—e.g., fact discovery; invalidity consideration with erga omnes effect; and juries as a bulwark against the improper grant or assertion of U.S. patents. . . .  [E]nsuring that U.S. patent infringement claims are adjudicated in U.S. courts is ‘necessary to provide full justice to the parties’ in this case because BMW seeks a jury trial on the infringement claims” (citation omitted).  Further, in Judge Albright’s reading, the Paris Convention “expressly affirms the independence of each country’s patent system and reserves the ‘provisions . . . relating to . . .  jurisdiction’ to each member state” (quoting Voda v. Cordis Corp., 476 F.3d 887, 898-99 (Fed. Cir. 2007)).  In addition, although there is case law authorizing the adjudication of U.S. copyright claims in foreign courts (and, I would note, vice versa), the court notes that “[u]nlike with copyrights, receiving patent protections in the U.S. requires a rigorous application and examination process”; and he cites the act of state doctrine, which in general counsels against second-guessing the exercise of another state’s sovereign authority.  Third, the court finds that an ASI would not offend international comity because “comity is implicated by ‘public international issues,’ but not ‘private’ disputes” (though one might ask, if that is the case, why courts should bother considering comity at all in the context of deciding whether to grant an ASI in a private dispute).  He does note, however, that

 

There are factors present in this case that are abnormal in the ASI context. For instance, the Court is unaware of any cases where an ASI has been granted to terminate the first filed proceedings between the parties. Moreover, this case features the unusual argument by Onesta that BMW would be inconvenienced by defending in a forum outside of its domicile, while BMW seeks courts outside its domicile. . . . But there is no recognized first-filed principle. See Laker Airways Ltd. v. Sabena, Belgian World Airlines, 731 F.2d 909, 927 (D.C. Cir. 1984) (“The mere filing of a suit in one forum does not cut off the preexisting right of an independent forum to regulate matters subject to its prescriptive jurisdiction.”); Microsoft Corp. v. Motorola, Inc., 696 F.3d 872, 887 (9th Cir. 2012) (“The order in which the domestic and foreign suits were filed ... [is] not dispositive.”). And making sure that U.S. patents are tried in U.S. courts, which regularly apply U.S. patent law is more “convenien[t]” for the courts of each sovereign. . . .Finally, given Onesta's domicile in the United States and BMW's desire to litigate here, the Court finds that neither party would be inconvenienced by doing so. . . .

It will be interesting to see what happens on appeal if the parties do not settle the matter or at least agree to some procedure for resolving it--though I suspect that under U.S. law it may be difficult to overturn the decision on appeal.  Nevertheless, here are a few random thoughts:

1.     The court invokes the United States’ interest in adjudicating its own patents and protecting litigants’ rights to a jury trial, to fact discovery, and to an invalidity determination with erga omnes effect.  But of course all of those things would be unavailable in a case in which a foreign court adjudicates foreign copyright rights, about which the court is more sanguine.  And is it really true that the adjudication of U.S. patent infringement claims in a U.S. court is “necessary to provide full justice to the parties” because BMW seeks a jury trial?  To my knowledge, no other country in the world provides jury trials in patent infringement actions (or discovery to the same extent the U.S. does, for that matter); does that mean that every country’s system is unjust?  I suppose the response would be no, it’s just that actions for the infringement of U.S. patent rights come with a guarantee of right to trial by jury, as a matter of U.S. constitutional law (and regardless of whether the party requesting a jury is the plaintiff or the defendant, domestic or foreign), and therefore the Munich court’s inability to convene a jury would render its decision on U.S. patent infringement claims unjust.  But again, if that is true, why isn’t it true for copyright claims—or other instances in which foreign courts might make determinations under U.S. law?

2.  A more serious problem, in my view, is that in countries such as Germany infringement and validity determinations are bifurcated—determined by different courts in different proceedings—such that a judgment of infringement may be entered with regard to a patent later determined to be invalid (the “injunction gap”).  Moreover, injunctive relief in favor of the prevailing patentee is near-automatic, indeed often viewed as being part of the claim for relief, rather than merely a remedy as in Anglo-American law.  See my new book, p.10 n.23 (stating that “in common law systems the law of remedies is viewed as something of a stand-alone discipline, albeit one that may be applied in different ways in relation to different bodies of private law.  In civil law countries such as Germany, by contrast, rights and remedies are viewed as being more closely connected, such that, as indicated in the text above, the infringement of a patent (for example) almost always results in the entry of an injunction. See Franz Hofmann and Franziska Kurz, Introduction to the “Law of Remedies,” in Law of Remedies: A European Perspective 3, 5 (Franz Hofmann and Franziska Kurz eds., Intersentia Ltd. 2019) (stating that “[u]nlike in common law countries, the question is not: which remedies are available to cure a wrong? Instead, German lawyers comprehend the legal system as a compilation of ‘subjective rights’”).”  So if a German court were to decide the infringement action against BMW, would it have to depart from its standard practice and consider whether the U.S. patent is valid?  Would the availability of an injunction be determined under German or under U.S. (eBay) law?  Beats me—but I can see why BMW, despite not being “inconvenienced” by litigating in its home forum, might prefer to take its chances in Texas, despite the possible risk of a larger damages award under U.S. law, if the case were to proceed that far.

3.  As many readers know, German courts generally disapprove of other states granting ASIs directed against the litigation of disputes or the enforcement of judgments in German courts.  That perspective may not matter so much here, however, if the German court itself would prefer not to have to decide some of the questions above, or if it would be inclined in any event to stay the adjudication of the U.S. patents pending proceedings in the U.S. (something the CJEU expressly suggested as a possibility in a case in which an E.U. court is asked to adjudicate a claim arising under another E.U. member state’s law).  But let’s imagine, just for the sake of argument, a case in which an E.U. court was asked to adjudicate a claim for the infringement of a U.S. patent and was not willing to cede jurisdiction to the U.S. court that enjoins the E.U. plaintiff from proceeding in the E.U.; maybe the E.U. court issues an AASI in response.  Which country is violating the comity norm:  the country issuing the ASI (which, one could agree, indirectly interferes with the operation of a foreign court), or the court that claims the right to adjudicate foreign patent claims (which, one could argue, indirectly interferes with the operation of its counterpart)?  Note that the WTO arbitration award last summer in the dispute between the EU and China can be read as disapproving both of ASIs (that is, disapproving of them beyond the context of the Chinese ASI policy at issue) and of the adjudication of foreign IP rights.  See my post on the WTO decision here, points 6b and 6c.  Then again, what precedential value, if any, does a WTO arbitration award have?

4.  There is some non-binding authority under U.S. law that might disagree with the position staked out by Judge Albright in BMW.  For example, section 211 of the American Law Institute’s 2007 Principles of the Law—Intellectual Property, titled “Subject-Matter Jurisdiction over Claims,” recommends that, in general, “a court is competent to adjudicate claims arising under foreign laws pertaining to the subject matter of these Principles,” as long as it has subject matter and personal matter jurisdiction under local law, and as long as “[a] judgment holding registered rights granted under the laws of another State invalid is effective only to resolve the dispute between or among the parties to the action.”  Similarly, in her dissent in Voda v. Cordis, 476 F.3d 887 (Fed. Cir. 2007), Judge Pauline Newman disputed, among other things, the characterization of patent grants as “acts of state” (as opposed to ministerial acts) for purposes of the act of state doctrine, and also did not believe that the Paris Convention or TRIPS Agreement “prohibits resolution by a national court of private disputes that include foreign patent rights.  She wrote:

The panel majority raises the specter that foreign courts might adjudicate United States patent rights, proposing that if our courts are permitted to decide questions under foreign patent law, other countries will feel free to decide questions of United States patent law. Cordis too sounds the alarm, stating that creative litigants will choose exotic foreign forums to resolve complex patent issues, and that the district court's decision will open the door to international chaos. I doubt that a United States district court is an exotic foreign forum; and it is not new for courts in other countries to apply the law of other nations when warranted. . . . All nations have recognized their obligation to provide a judicial forum to address disputes involving their citizens; no warrant has been shown to remove foreign patents from this purview.

Judge Newman’s dissent did not expressly grapple with Paris Convention articles 2(3) and 4bis, however, though perhaps an argument could be made that neither provision necessarily or inherently entails exclusive adjudicatory jurisdiction.  Whether that is the correct reading of the Convention, I’m not sure.  

Blogging break this week

 I just came down with a mild case of COVID.  I will be taking a blogging break this week.

Aggregate Royalties for Cellular SEPs

Nadia Soboleva and John Hayes have published an article titled Aggregate Royalty for Cellular SEPs in Recent Court Decisions, 11/2025 GRUR Patent 546.  Here is the abstract:

 

Standards organizations developing cellular communication standards typically require participants to disclose standard essential patents (SEPs) and agree to license such patents on fair, reasonable, and non-discriminatory (FRAND) terms. When courts are asked to adjudicate license disputes involving SEPs, they often calculate the implied aggregate royalty for all SEPs in the relevant standard associated with a potential license.  We review five recently litigated FRAND cases and report the aggregate royalty per mobile device in most of these decisions falls in a range from $3 to $16, with an average of $9.25.  The aggregate royalty by the UK Court of Appeal in Optis/Apple is an outlier of $39.47.

The five cases are the U.S. TCL v. Ericsson decision, Unwired Planet, InterDigital v. Lenovo, Optis v. Apple, and the Chinese Oppo v. Nokia decision.  The authors write that these cases “encompass the only publicly available decisions that set a worldwide FRAND royalty for the 4G or 5G cellular standards.”

A few quick things to note.  First, the authors are both from Charles River Associates, and they note that they “have worked on multiple projects involving SEPs, including some of the matters discussed in” their article.  Second, I haven’t endeavored to check the authors’ analysis against the decisions they discuss.  I have no reason too question their analysis, but for now I am just reporting what they state.  Third, a range of $3 to $16 seems pretty broad to me, even without Optis/Apple (the appeal from which is pending before the U.K. Supreme Court).  Fourth, as noted previously on ip fray, the Munich Regional Court recently suggested in its decision involving Wilus and Asus that a rate of 10-18% for all SEPs reasonably necessary for operation of a mobile device would be within the FRAND range (see decision here, para. 294:  “Ausgehend von diesem Wert für den wichtigsten Standard (Mobilfunk) liegt die Gesamtbelastung für ein Mobiltelefon für alle für einen sinnvollen Betrieb erforderlichen Standards (Mobilfunk, Wi-Fi, Streaming, etc.) bei ca. 10% bis 18%.”).  For a mid-priced phone, that would be substantially higher than the aggregate royalty the above authors report, assuming that they and the Munich court are talking about the aggregate royalty burden for the same combinations of technologies.  Fifth, even if these are the only decisions available for the purpose of the study, five cases are a small sample, and whether the derived amounts accurately reflect FRAND rates depends on whether the courts in these cases got their numbers right; and some commentators have critiqued the methodology employed in, e.g., Unwired Planet.   Even so, one might be inclined to think that the Munich court’s range seems rather high, all things considered.