Monday, October 5, 2015

Some Recent Papers on FRAND

1.  Carl Shapiro and Fiona Scott Morton have posted a paper on ssrn titled Patent Assertions: Are We Any Closer to Aligning Reward to Contribution?  Here is a link to the paper, and here is the abstract:
The 2011 America Invents Act was the most significant reform to the United States patent system in over fifty years. However, the AIA did not address a number of major problems associated with patent litigation in the United States. In this paper, we provide an economic analysis of post-AIA developments relating to Patent Assertion Entities (PAEs) and Standard-Essential Patents (SEPs). For PAEs and SEPs, we examine the alignment, or lack of alignment, between the rewards provided to patent holders and their social contributions. Our report is mixed. Regarding PAEs, we see significantly improved alignment between rewards and contributions, largely due to a series of rulings by the Supreme Court. Legislation currently under consideration in Congress would further limit certain litigation tactics used by PAEs that generate rewards unrelated to contribution. We also see some notable developments relating to SEPs, especially with the recent reform to the patent policies of the IEEE, a leading Standard-Setting Organization (SSO) and with several recent court decisions clarifying what constitutes a Fair, Reasonable and Non-Discriminatory (FRAND) royalty rate. However, other steps that could better align rewards with contributions on the SEP front have largely stalled out, particularly because other major SSOs do not seem poised to follow the lead of the IEEE. Antitrust enforcement in this area could further improve the alignment of rewards and contributions.
2.   Lizhi Ning, Shubha Ghosh, and Wei Zhou have published a paper in the Journal of Antitrust Enforcement titled Price discrimination in patent licensing and the application of FRANDHere is a link to the paper (behind a paywall, however), and here is the abstract:
With the increasing amount of global trade and the accelerating process of economic globalization, the economic entities of the world have reached a consensus on protecting equal trading opportunities—especially through pricing and other trading conditions—to achieve substantially fair global trade transactions. The arrival of the era of the knowledge economy increases the role of intellectual property in manufacture and trade and increases attention to the patent licence systems in many countries. In patent licence practice, licensors grant patent licences with many conditions attached. On the one hand, differential treatment will stimulate competition in the market and bring generous profits to the licensors; on the other hand, excessive differential treatment can seriously affect fair competition in the relevant market and undermine the normal operation of the market economy. Therefore, this article explores the issue of price differential treatment in the practice of patent licensing and reasonable royalty fees or rates under FRAND, in order to provide inspiration for further improvement and development of China’s patent licensing market. 
3.  Theo Bodewig has published an article in the July 2015 issue of GRUR Int. (pp. 626-34), titled Einige Überlegung zur Erschöpfung bei Zwangslizenzen an standardessentiellen Patenten ("Some Observations on the Exhaustion by Compulsory Licensing in Respect of Standard Essential Patents").  Here is my translation of the abstract:
In recent years, when the business sections of newspapers have discussed patent law, the military concept of "patent wars" frequently appeared.  It was and is a matter of complaints with values of over 100 million or even billions of euros in connection with patent infringement actions, with which the largest firms in the filed of information technology worldwide have been inundated.  In PCs, laptops, tablets, game consoles, smartphones, and other electronic devices hundreds of components are used, which incorporate protected patents, utility models, or design rights.  Insofar as these protected rights are incorporated into industrial standards (standard essential), one can scarcely avoid them.  As a rule, they also cannot be replaced with alternative technologies.  A single smartphone can include over 1000 protected inventions.  For component manufacturers or distributors it is however often difficult to clarify the scope of protection and to avoid infringing.
The author argues that a compulsory license accorded on competition grounds (e.g., under the Orange Book Standard) pursuant to national law will not exhaust the patent owner's rights outside the nation granting the license,  but that a compulsory license granted under EU law (e.g., under TFEU article 102) would exhaust those rights throughout the entire EU.

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