Monday, May 12, 2014

FRAND and Injunctive Relief in India

I briefly discuss the topic of patent remedies in India in my book at pp. 373-76, citing among other things the relevant Indian statutes; the case of Hoffmann-La Roche Ltd. v. CIPLA Ltd., 2008 (37) PTC 71 (High Ct. Delhi) (excerpted in Martin Adelman et al., Global Issues in Patent Law 254 (2011)) on the importance of weighing the public interest in deciding whether to grant preliminary injunctive relief; and commentary by P. Narayanan (Patent Law (4th ed. 2006)), Pravin Anand & Swathi Sukumar (India, in Global Patent Litigation: Strategy and Practice (Willem A. Hoyng & Frank W. E. Eijsvogels eds., 2009)); Ravi Bhola (India, in Patent Infringement Worldwide (Jan Busche et al. eds., 2010)), who states that Indian law provides relatively little precedent on patent damages, and Mrinalini Kochupillai (India, in The Enforcement of Patents (Kung-Chung Liu & Reto Hilty eds., 2012)).  There also are a few other books discussing patent remedies in India that I discovered at my last visit to the Max Planck Institute, including J.K. Das, Intellectual Property Rights 387-99 (Kamal Law House 2008); Feroz Ali Khader, The Law of Patents—With a Special Focus on Pharmaceuticals in India 655-80 (LexisNexis Butterworths 2007); Akshat Pande, Valuation of Intellectual Property Assets 98-99, 107 (Eastern Law House 2010); M.B. Rao & Manjulu Rau, Patent Law in India 232-35 (Wolters Kluwer 2010); and Elizabeth Verkey, Law of Patents  503-31 (Eastern Book Co. 2012).  
With respect to FRAND matters in particular, in recent months the Competition Commission of India (CCI) has launched two investigations of Ericsson for violating Indian competition law by seeking non-FRAND royalties for the unauthorized use of Ericsson's FRAND-encumbered SEPs.  To my knowledge, these matters remain pending.  For discussion, see posts here and here from the Spicy IP Blog and this one on Foss Patents.  Professor Yogesh Pai (National Law University, New Delhi) also recently has published two papers on FRAND and SEPs.  The first is Standard-Essential Patents:  A Prologomena, 19 J. Intell. Prop. R. 59 (2014), available here.  The abstract reads:
A large variety of technology standards are encumbered by patents. Standard-setting organizations (SSOs) through their intellectual property policies require patent holders to disclose standards-essential patents (SEPs), along with a requirement to commit to Fair/Reasonable and Non-Discriminatory (FRAND) terms of licensing. However, the contractual and commercial aspects of FRAND are unclear at the time of formation of standards. An additional market demand may be created purely by virtue of the particular patented product being declared as a SEP leading to a certain kind of opportunism by patent holders who demand ‘unreasonable’ royalties, or alternatively, engage in patent hold-ups. Primarily, the disagreement on what FRAND actually means does not only pertain to the issue of fixation of royalties alone; there is strong disagreement over the very nature of a contractual FRAND commitment, and whether or not FRAND operates as a waiver for injunctive relief. Competition/antitrust authorities across jurisdictions have also launched investigations into possible abuses by patent holders in the SEP context. From a global economic law perspective, the World Trade Organization’s trade based regime (TRIPS and TBT Agreements) also have a role to play in providing long-term solutions to resolve issues concerning SEPs.
The second, The Rational Basis for FRANDly Courts Denying Injunctive Relief for SEPs Infringement, 19 J. Intell. Prop. R. 146 (2014), available here, discusses how courts in different countries have addressed the question of whether owners of FRAND-encumbered SEPs should be able to obtain injunctive relief, and also includes a brief discussion of (and cites to other sources on) the Ericsson litigation noted above.  The abstract from this article reads:
Increasingly, courts across several jurisdictions are unwilling to grant injunctions in cases involving infringement of Standards-Essential Patents (SEPs), the teleological reason being the unfair/inequitable outcomes due to the patentee gaining an additional market power not conveyed by the patent. The courts by evaluating the equitable factors deny injunctions based on an underlying logic that since a patentee is purely interested in deriving royalty on his patents committed by way of Fair-Reasonable and Non-Discriminatory (FRAND) licensing offers he may be compensated monetarily in lieu of an injunction. However, availability of adequate remedy at law coupled with lack of irreparable harm due to existence of FRAND commitment is not the only way to explain the rational basis for lack of injunctive relief when viewed through a theoretical and conceptual prism. This note chronicles the legal construct of patent injunctions from a comparative law perspective and articulates that the rational basis for denial of an injunction for alleged infringement of SEPs is due to patent law’s inability to construe the ‘right to exclude’ and its relationship with SEPs protected market since it is fraught with conceptual and inherent definitional fallacies of assessment of ‘market power’ that go beyond the pale of patent law and policy.
If I were to express Professor Pai’s thesis as I understand it, in my own words, it would be that courts should decide whether or not to grant injunctions based not (exclusively) on whether there is an express FRAND commitment in place but rather on whether the grant of an injunction would enable a patent owner to obtain value that is attributable to the fact that the implementer is locked in, rather than to the merits of the invention itself.  As such, I agree; see my discussion here.     

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