Friday, January 15, 2016

Two Papers on the Chinese Huawei v. InterDigital FRAND Dispute

1.  Yang Li and Nari Lee have posted a paper on ssrn titled European Standards in Chinese Courts -  A Case of SEP and FRAND Disputes in China, which is forthcoming in Governance of Intellectual Property Rights in China and Europe (N. Lee, N. Bruun & M. Li eds., Edward Elgar Publishing 2016).  Here's a link to the paper, and here is the abstract:
After the initial grants of patents, contracts, industry customs and standards are adopted voluntarily by the market participants and they function as self-regulating or governing instruments to coordinate fragmentations caused by territorial rights. The activities of the standard-setting organizations (SSOs) that set standards for the use of the standard essential patents (SEPs) are one such example of self-regulation. Often, while the patent rights are local, SSOs are organizations often with multiple and heterogeneous participants. The guidelines and other soft law policies that SSOs voluntarily adopt are often likely to reflect such multi-territorial nature of SSOs’ participants. When a dispute arises on the conditions that are set by SSOs over the assertion of SEPs, the problem would be likely to include factual considerations that arise across territories. As such, disputes surrounding SEPs force local courts to consider not only local judicial standards and doctrines, but also those used elsewhere that may be relevant to understanding complex facts of disputes. This chapter discusses such tendency of the courts in the interpretation of a particular licensing principle of ‘fair, reasonable and non-discriminatory’ (FRAND) adopted by an European SSO, the European Telecommunications Standards Institute (ETSI), in Chinese courts. The chapter explores in detail the dispute surrounding SEPs between Huawei and InterDigital in China, and analyses it in the context of similar cases surrounding SEPs and FRANDs elsewhere. We argue that there seems to be a judicial globalization, where courts use of foreign-developed principles in judging local disputes with global commercial impacts, resulting from self-regulation, and that the Chinese court cases may be understood in the same vein. We conclude by arguing that this may be a next phase in the development of Chinese IP law, where the local practices of governance have to be built after the initial norms transplant.
2.  Yuanshi Bu has published a paper titled Die Kartellrechtlichen Einschränkungen des Immaterialgüterrechts in China ("Competition Law Restraints on IP Rights in China") in GRUR Int 2015, 1098-1106.  Here is the abstract (my translation from the German):
The relationship between competition law and IP law is a very important and at the same time highly complicated matter, which stands at the interface of both bodies of law.  In April 2014 the long-awaited Regulation on the Prohibition of the Abuse of IP Rights in China was adopted, after which competition law offenses in the People's Republic were investigated and claims recently filed against well-known international firms in the technology, automotive, and pharmaceutical sectors.  All the more urgent then is the demand for more legal certainty for business in the region.  This article attempts comprehensively to illuminate the current state of the law based on these cases.
A portion of the article (pp. 1104) discusses the judicial determination of FRAND terms in the Huawei v. IDC matter, and critiques the court's use of a license between Apple and IDC (which had a rate of 0.0187%) as the principal comparator, on the ground that Apple also was required to pay a lump-sum quarterly royalty--though the author also notes that IDC refused to  disclose the terms of comparable license rates itself and thus that the lower rate might be viewed as something in the nature of a sanction.   

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