Wednesday, May 7, 2014


Some new papers on FRAND issues:

1.  The Autumn 2013 issue of CPI (Competition Policy International) features a Symposium on Antitrust and IP with articles by Sir Robin Jacob; Federal Trade Commissioner Josh Wright & Judge Douglas Ginsburg; former USPTO Commissioner David Kappos & Professor Richard Epstein; E.C. Senior Economist Eliana Garcés Tolón; Pierre Régibeau of Charles River Associates; and Professors Herb Hovenkamp, Kai-Uwe Kuhn, Fiona Scott Morton, and Tim Wu.   (Hat tip to the Antitrust & Competition Policy Blog.)  You need a subscription to access the articles, but here are the abstracts of a few of them.

The Epstein-Kappos paper is titled Legal Remedies For Patent Infringement: From General Principles To FRAND Obligations For Standard Essential Patents. and its abstract reads as follows:   
At present, the traditional informal mechanisms for setting FRAND rates for SEPs have come under extensive attack by the Federal Trade Commission and elsewhere, from those who believe more limited damages and less frequent injunctions offer the best path to resolving disputes over Standard Essential Patents. In this article we take issue with those conclusions. We begin with an explanation of how a damage system for ordinary contract disputes does not typically rely on the three standard measures—expectation, reliance, restitution—for resolution, but uses liquidated damage to deal with the scenario where a defendant seeks to "out its own agreements. We argue that the techniques that work generally in contract law offer strong confirmation of the traditional rules of damages and injunctions now under wide assault.
The abstract of the Kuhn paper, Justifying Antitrust Intervention in ICT Sector Patent Disputes: How to Address the Hold-Up Problem, reads:
The economic justification for any regulatory intervention in patent litigation, especially those for standard essential patents, comes from the view that hold-up of users of patents is endemic to some industries, especially ICT. The paper reviews these reasons why hold-up is more likely in ICT industries and discusses the type of evidence that is available. It discusses the strengths and limitations of competition policy instruments and notes that addressing the issue is far more appropriate under an abuse of dominance standard that allows for exploitative abuses to be addressed. It is finally explained that nevertheless the use of such an instrument has severe limitations and explores the question of how incentives of standard setting organizations can be improved to make commitments to FRAND licensing more meaningful.
The abstract of the Garcés Tolón paper, titled Licensing Of Standard Essential Patents: Antitrust Intervention Is Not Big Enough A Fix, reads:
The recent antitrust interventions against patent holders issuing injunctions to assert standard essential patents have caused a stir and a debate on the role of antitrust enforcement in licensing negotiations. This piece argues that the way antitrust intervention is being framed allows regulators to restrict the behavior of the patent holder staying away from the issue of FRAND determination. Yet, uncertainty about the meaning of reasonableness and about what is and is not allowed under FRAND commitments lies behind most litigation activity surrounding SEPs. Without more clarity on what can or cannot be accepted under FRAND it is unlikely that substantial progress will be achieved in reducing costly litigation. Antitrust enforcement is ill placed to do the job. In the face of uncertainty about Courts’ ability to develop a consistent line across the globe, standard setting organizations have a role to play in shedding some light on fair licensing of SEPs.
2.  Professor Alison Kones has posted a paper on ssrn (forthcoming in the European Competition Journal) titled Standard-Essential Patents:  FRAND Commitments, Injunctions and the Smartphone Wars.  Here's the abstract: 
This article examines a number of cases which have arisen in the EU and which raise the question of whether a holder of a standard-essential patent (SEP) which has given a commitment to license that SEP to any third party on fair, reasonable and non-discriminatory (FRAND) terms, should be able to enforce its patent rights thought the bringing of an injunction in court. In particular, it focuses on questions referred to the Court of Justice by the Regional Court of Düsseldorf in the context of litigation between two Chinese electronics companies operating in the mobile telephony market, Huawei Technologies and ZTE. Crucially, the German court has asked the EU court whether, and if so when, it might constitute an abuse of a dominant position contrary to Article 102 TFEU for a FRAND-encumbered SEP-holder to seek an injunction against a potential licensee alleged to be infringing the patent. This article analyses the questions that have been put to the Court of Justice and considers how it might answer them. It suggests that even though EU precedent does not provide a clear solution to the questions posed, jurisprudence does set out some guiding principles which can be relied upon to construct an answer. It concludes, however, that even if this matter is resolved, other pressing – and difficult – matters remain which require urgent development. As the FRAND obligation leaves vast scope for disagreement between SEP-holders and implementers over a number of fundamental issues, it is critical that mechanisms are put in place which will allow FRAND disputes to be resolved quickly and efficiently to the mutual benefit of SEP-holders and implementers. 
3.  According to the George Mason Law Review's webpage, the journal's forthcoming issue (volume 21, number 4) will feature articles on FRAND and other issues of interest to current debates in patent law and policy, including patent assertion entities.  The FRAND-related articles include Joshua D. Wright, SSOs, FRAND, and Antitrust: Lessons from the Economics of Incomplete Contracts; Damien Geradin, The Meaning of “Fair and Reasonable” in the Context of Third-Party Determination of FRAND Terms; and Anne-Layne Farrar, Moving Past the SEP RAND Obsession: Some Thoughts on the Economic Implications of Unilateral Commitments and the Complexities of Patent Licensing.  I assume the Wright paper is a more recent version of the paper I blogged about here.

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