Monday, December 15, 2014

Some More Recent SEP/FRAND Papers

1. Janusz Ordover and Allan Shampine published a paper titled Implementing the FRAND Commitment in the October 2014 issue of The Antitrust Source, available here.  From the introduction:
For many years, standard-setting organizations (SSOs) have required members to commit to license standard-essential patents (SEPs) on Fair, Reasonable and Non-discriminatory (FRAND) terms. How FRAND terms can and should be interpreted has been the subject of extensive debate (as well as litigation in many jurisdictions). While we acknowledge other objectives behind these commitments, we focus here on their role as constraints on the ability of the holders of the SEPs to hold up implementers of such FRAND-encumbered patents, with potential anticompetitive effects.
In this article, we explain why, from a practitioner’s perspective and given the economic goals of FRAND terms, a mere commitment to license on FRAND terms does not ensure that the ex-post negotiations will invariably satisfy the FRAND principles. We then describe when and how we believe FRAND commitments should be enforced to achieve the economic goals of FRAND terms and avoid anticompetitive effects.
2.  The same issue of The Antitrust Source also features an article by Douglas H. Ginsburg, Taylor M. Owings, and Joshua D. Wright titled Enjoining Injunctions:  The Case Against Antitrust Liability for Standard Essential Patent Holders Who Seek Injunctions, available here.  From the introduction:
A standard essential patent (SEP) may give the patent holder market power in the market for an input that technology manufacturers need in order to make their products compatible with each other. Several commentators have argued that, when a patent becomes part of a standard pursuant to an agreement among competitors given in exchange for the patent holder’s promise to license the technology under fair, reasonable, and non-discriminatory (FRAND) terms, antitrust law should limit the holder’s right to seek an injunction to stop an infringing manufacturer from selling its standardized product. We disagree for two reasons: First, antitrust sanctions are not necessary, given the law of contracts and of injunctions, to avoid harm to consumers and, second, the application of antitrust law in this situation could, by undermining the ability of courts to tailor appropriate remedies, diminish the incentives for companies to innovate and for industries to adopt standards.
3.  Elaine Xu has published a student comment titled Brave New Frontier:  Antitrust Implications of Standard-Setting Patents in the Smartphone Market, 32 Wisconsin International Law Journal 384 (2014).  It doesn't appear to be available yet on the journal's website but can be accessed on Westlaw.  From the introduction:
This article discusses two topics. Part I discusses standardization and how antitrust issues can arise as a result of standard essential patents. It introduces the legal framework for antitrust analysis, and gives an  overview of important standard setting cases. Comparing how Europe and the United States have ruled on antitrust violations of standard essential patents provides the framework for analyzing whether Samsung committed antitrust violations in its interactions with standard essential patents.
Part II, using the antitrust analysis, defines how Samsung's patented technology and its substitutes form the relevant market. It discusses Samsung's monopoly power and analyses whether Samsung abused its standing by withholding information regarding its patents from the European Telecommunications Standards Institute during the development of the third generation universal mobile telecommunication system standard.
4.  Philip Maume has a paper on ssrn titled Compulsory Licensing in Germany, which is a chapter in a forthcoming book titled Compulsory Licensing (Reto Hilty and Kung-Chung Liu eds., MPI Studies on Intellectual Property and Competition Law, Vol. 22, Springer).  Here is a link, and here is the abstract:
In the last 20 years, German courts have developed a sophisticated approach to compulsory licensing of patents. Compulsory licences under competition law are of particularly high relevance. In short, German competition law obliges the holder of a patent, which is essential in a standard to grant a licence on terms that are fair, reasonable, and non-discriminatory (FRAND). Users of such patents can also raise a so-called competition law defence against imminent injunction orders. 
The resonance of the German debate in international scholarly literature has remained relatively low, probably because of the language barrier. Most works merely scratch the surface of the particularly complex issues. This paper provides an in-depth analysis of the German legal background and the consequences in practice. It suggests a streamlined, simplified approach to competition-law-based defences.
5.  Gunther Friedl and Christoph Ann have published a paper in the October issue of GRUR titled Entgeltberechnung fur FRAND-Lizenzen an standardessenziellen Patenten ("Calculating FRAND License Fees with respect to Standard Essential Patents").  Here is the abstract (my translation from the German).  I haven't read the paper yet and may have more to say about after I have:
If SEP owners are obligated by competition law to license their patents on FRAND terms, questions remain concerning the terms of such licenses.  Above all is the question of how to calculate the amount of a FRAND-conforming license fee.  Fundamentally, valuation approaches are conceivable that are based on patent usage, but problems present themselves here with respect to complex products such as FRAND-notorious smartphones.  A cost-based assessment for FRAND license fees, such as is common in regulated industries, presents itself as suitable.  Such an approach, based on the total costs of a patent, is sketched in the present essay.   On the one hand, this approach ensures to the patent owner a reasonable rate of return, and on the other preserves the FRAND conformity of the so-determined license fee.

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