Friday, November 29, 2019

Blogging break

I will take a blogging break next week, while I visit National Chengchi University (NCCU) in Taipei, Taiwan.  On Monday, I will be giving a presentation titled Extraterritorial Damages in Patent Law to the judges of Taiwan's Intellectual Property Court.  Tuesday through Thursday, I will be guest-lecturing in Professor Chung-Lun Shen's class on, respectively, (1) Introduction to Comparative Patent Remedies, (2) Introduction to Standard Essential Patents and FRAND Royalties, and (3) The Comparative Law of Patentable Subject Matter.  Friday, I will give a presentation titled Damages for Noneconomic Harm in Intellectual Property Law at a Patent Damages Symposium organized by NCCU and National Taiwan University.  I will return to blogging the following week.

Wednesday, November 27, 2019

FTC v. Qualcomm: Amicus Briefs in Support of the FTC

Happy Thanksgiving to my U.S. readers.  You (and others) may be interested to note that the following amicus briefs have now been filed in support of the Federal Trade Commission in FTC v. Qualcomm:

1.  Brief of Amici Curiae Law and Economics Scholars in Support of Appellee and Affirmance.  This brief, signed by forty scholars--including lead authors Mark Lemley, Doug Melamed, and Steve Salop, along with inter alia Rich Gilbert, Herb and Erik Hovenkamp, Dan Rubinfeld, and Fiona Scott Morton (and me)--focuses primarily on why Qualcomm's no license, no chips policy constitutes unlawful monopoly maintenance in violation of Sherman Act section 2.

2.  Brief of Amicus Curiae Professor Jorge L. Contreras in Support of Appellee and Affirmance.  Professor Contreras has posted the brief on ssrn, along with the following abstract:
Qualcomm participated in the development of 3G and 4G wireless telecommunication standards under the auspices of two SDOs, the Telecommunications Industry Association (“TIA”) and the Alliance for Telecommunications Industry Solutions (“ATIS”). Each of these SDOs had adopted intellectual property rights policies (IPR Policies) that required their participants to grant licenses of SEPs to implementers of their standards on FRAND terms. Yet, over the course of several years, Qualcomm refused to license its SEPs to numerous actual and potential modem chip rivals including MediaTek, Project Dragonfly (a joint venture of NTT DoCoMo, Samsung and several Japanese manufacturers), Samsung, VIA Telecom, Intel, HiSilicon (a subsidiary of Huawei), Broadcom, Texas Instruments, and LGE. The district court also found that when Qualcomm did license its SEPs to smartphone vendors, its royalty rates were “unreasonably high.”
Accordingly, the district court found that Qualcomm violated its FRAND commitments to ATIS and TIA, as well as Sections 1 and 2 of the Sherman Act, and Section 5 of the FTC Act. As a remedy, the district court entered an injunction that, inter alia, required Qualcomm to license its SEPs on FRAND terms to rival chip makers, and to renegotiate its existing SEP licenses to reflect reasonable royalty rates. Qualcomm now appeals.
This brief seeks to draw to the Court’s attention historical, practical and policy matters pertaining to technical standardization that bear on the arguments made on appeal by Qualcomm and its federal agency amici curiae. In particular, this brief argues that: (1) the district court was correct to conclude that Qualcomm is required to license its SEPs to all applicants on FRAND terms, (2) the “reasonable” royalty level required by Qualcomm’s commitments to the relevant SDOs should not be measured by Qualcomm’s own royalties charged to others, and (3) enforcement of the district court’s injunction against Qualcomm will not threaten U.S. national security, and the arguments made to that effect mischaracterize or misunderstand the nature of both patent law and standards.
Qualcomm has undeniably played a significant role in the development of wireless telecommunications technology. However, the antitrust laws must be enforced rigorously and even-handedly to eliminate anticompetitive conduct. An enterprise that has engaged in anticompetitive conduct should not be excused simply because it contributes to the national economy or to national infrastructure or defense. Giving Qualcomm special treatment in this case would open the door to such arguments in practically every antitrust case involving major industrial or technology players. And, as such, the force of the antitrust laws would be severely weakened to the detriment of American competition and consumers. Accordingly, this brief urges the Court to affirm the decision and order of the district court.
3.  Three other amicus briefs also have been filed today--by the Open Markets Institute, the Computer and Communications Industry Association, and by ACT | The App Association--and argue, inter alia, that Qualcomm has an antitrust obligation to license its patents on FRAND terms.

Update:  Several more amicus briefs were filed on Friday, November 29, by among others Intel, MediaTek, R Street Institute, and the American Antitrust Institute and Public Knowledge.  I'll try to catch up on these over the coming week. 

The Law of Remedies: A European Perspective

Franz Hofmann and Franziska Kurz have published their new edited volume, titled The Law of Remedies:  A European PerspectiveHere is a link to the publisher's (Intersentia's) webpage for the book, and here is the description:
With the increasing importance of the concept of remedies in European private law, this book focuses on remedies as a distinctive and novel field of European legal research. It considers the common law tradition (England and Wales), as well as the civil law viewpoint (on the example of Germany), making the case for a European law of remedies.
It is argued that ‘remedies’ are an enforcement tool influencing the scope of substantive rights. In doing so, the book analyses different mechanisms of enforcement, including the debate on private versus public enforcement as well as the perspective of criminal law. The enforcement of rights is understood as an intradisciplinary task. Remedial law is, however, distinct from procedural law, as well as from substantive law in a narrow sense. Subsequent to defining the scope of a law of remedies, this book analyses several underlying principles and common themes. For example, the proportionality test is presented as fundamental principle in European remedial law. The value gained by identifying common ground is e. g. illustrated with respect to damages in European Private Law. Especially in IP law, in turn, the CJEU rulings and secondary European legislation confirm the importance of proportionate remedies. Moreover, within the law of remedies the function of each remedy can be analysed, and respective interests can be balanced.
Further examples that reveal the importance of a sophisticated enforcement are the CJEU’s recent extension of the concept of communication to the public, the notice-and-take-down-procedure in intermediary liability cases and remedies for non-conformity of digital content or consumers’ remedies in European contract law. In German patent law, the development of grace periods and shareholders´ rights in German corporate law can be analysed from a “remedy” perspective as well.
Overall, this book demonstrates that remedies are more than just an addendum and innovatively presents an emerging research area. As such, it is of great relevance to all lawyers concerned with questions surrounding the enforcement of rights: international academics as well as practitioners.

 Law of Remedies

Monday, November 25, 2019

From Around the Blogs

1.  The FTC has filed its responsive brief in FTC v. Qualcomm.  I'll be spending some time reading it later today, and may have some comments later this week.  Meanwhile, there is coverage on Bloomberg and FOSS Patents (here and here), plus an op-ed on the national security issue by Michael Chertoff in the Wall Street Journal.

2.  On Spicy IP, Pankhuri Agarwal published a post coauthored with Bhavik Shukla titled Delhi HC Division Bench Restores Sanctity of Three-Pronged Test for Interim Injunctions; Sets Aside Two Interim Injunction Orders against Natco. The post discusses a decision from this past July in which the Delhi High Court set aside two interim injunctions entered against generic drug manufacturer Natco.  According to the post, the trial judge, in line with his previous decision in Sterlite Technologies, had entered the injunction based on his view that interim injunctions are necessary to preserve the patent owner's ability to reap the benefits of its patents--and without deciding the standard factors of prima facie case, irreparable harm, and balance of conveniences.  The Delhi High Court held that such a "blanket approach" was erroneous, and that courts should consider the standard three factors along with "other parameters" which have arisen in other patent cases.

3.  On IPKat, Alex Woolgar published a post by  Rien Broekstra and Gaëlle Béquet titled FRAND:  OLG Karlsruhe rules on nature, extent and timing of obligations under Huawei v. ZTE.  The post links to an October 30 decision of the Karlsruhe Oberlandesgericht, Case 6 U 183/16, involving an action by Philips against Wiko.  The authors state that the decision point to some divergences among the practice of the German, English, and Dutch courts in applying Huawei v. ZTE.  Whereas courts in the latter two nations view the Huawei framework as a safe harbor (see, e.g., Mr. Justice Birss's opinion in Unwired Planet), the German courts take a somewhat stricter view by requiring the patent owner to comply or risk a finding that it has abused its dominant position.  However, that strictness is softened a bit by allowing the SEP owner to suspend a suit to provide the implementer with the required notice, which must include sufficient information to enable the implementer to evaluate whether it is being treated in a discriminatory fashion.  According to the authors, the Dutch courts, by contrast, place the burden of proving FRAND terms on the implementer.  I wonder if the CJEU will take another FRAND case one of these days to resolve these emerging issues?

4.  Also on FOSS Patents, Florian Mueller published a post titled Report on Berlin SEP licensing and injunctions workshop released by ACT | The App Association: AllThingsFRAND, which links to the latter organization's report (which also notes the divergence among the German, English, and Dutch courts in applying Huawei v. ZTE); and another titled EU-based industry body outlines criteria for standard-essential patent pools to have positive impact on innovation, which links to the Fair Standards Alliance's recommendations on SEP pools.  

Friday, November 22, 2019

Federal Circuit Vacates $503 Million Damages Award

This morning the Federal Circuit handed down its opinion in VirnetX Inc. v. Apple Inc. (opinion by Judge Taranto, joined by Judges Lourie and Mayer).  The court affirms that Apple is precluded from challenging the validity of the four patents in suit, and affirms a finding of infringement as to two of them, but reverses as to the other two.  In light of the partial reversal, the court vacates the damages award--"a reasonable royalty . . . equal to a rate of $1.20 for each device whose sale by Apple infringed" (p.2)--and remands for a possible new trial.  From the opinion (pp. 29-30):
The jury’s verdict provided that VirnetX was entitled to a damages award of $502,567,709.00 but did not indicate which portions of the award were allocated to which patents. We have affirmed the judgment of infringement by VPN on Demand but reversed the judgment of infringement by FaceTime. Those rulings raise the question of whether a new trial must or should be held because of the reduced basis of liability. We see no difficulty with limiting any such trial to damages, but there is a question whether a limited retrial need or should be held at all.
We will not decide that question. We have said that “where the jury rendered a single verdict on damages, without breaking down the damages attributable to each patent, the normal rule would require a new trial as to damages.” . . . We have not received full briefing on the issue of whether, despite the normal rule, this is a case in which a new trial on damages is unnecessary.
It appears to be undisputed that the jury used a per-unit royalty of $1.20 and adopted the calculation of VirnetX’s expert to reach its damages figure—$1.20 per unit, with over 384 million units having both FaceTime and VPN on Demand and over 34 million units having only FaceTime. . . . It appears, therefore, that the jury found that FaceTime by itself was worth $1.20 per unit. But because the jury found infringement by FaceTime as well as VPN on Demand, and Facetime was installed on all units, the jury did not have to decide whether the $1.20-per-unit figure would be correct if only VPN on Demand infringed. VirnetX’s expert did assert that the same figure would apply, J.A. 1854–55 (explaining calculation based on licensing), but the jury did not have to decide that issue. Apple’s expert, for his part, asserted that VPN on Demand was vastly more valuable than FaceTime, J.A. 2569–73 (testifying that VPN on Demand was worth about 6 cents per unit, FaceTime about 1 cent per unit), but neither Apple nor VirnetX has suggested to us that the jury accepted that testimony.
We do not go further in exploring the law, the facts, and any admissions that might be relevant to an inquiry into the need for a new damages trial. We remand for further proceedings in the district court. We leave it to the parties and the district court to consider in the first instance relevant aspects of whether to hold a limited damages-only re-trial given the reduced basis of liability, including what discretion there might be to hold such a retrial without conclusively determining whether one is needed, especially if doubt remains as to the application of the above-quoted standards to this case. We do not prejudge these issues.

Thursday, November 21, 2019

Kühnen on FRAND Licensing and Implementation Chains

In August I mentioned an article by Judge Thomas Kühnen, the Presiding Judge of the Düsseldorf Oberlandesgericht, titled FRAND-Lizenz in Verwertungskette (which I translated as "FRAND License in Exploitation Chains") that had recently been published in the July 2019 issue of GRUR (pp. 665-73).  I'm happy to call readers' attention to an English-language translation of the article that is now out in JIPLP (titled "FRAND licensing and implementation chains").  Here is a link, and here is the abstract:
It is conventional wisdom that the proprietors of standard-essential patents (“SEPs”) are free to choose the implementation stage at which they offer FRAND licenses for their inventions; ordinarily, these proprietors offer licenses to the actors at the end of the implementation chain, because the consumer goods incorporating patented technology, considering their high sales price, promise the putatively highest licensing fees. The patent users upstream from the licensee are denied their own FRAND license on the grounds that they are sufficiently protected against patent infringement actions by virtue of the licenses granted to their buyers. The present article will show that both assumptions are incorrect. First, every interested party has a claim to a license absent any special prerequisites; hence, the party at the beginning of the implementation chain, too, has such a claim, even if a FRAND license has already been granted at the distribution stage downstream from said party. Second, the amount of a FRAND royalty will not depend on the position of the license applicant within the implementation chain.
As I noted in August, if I understand correctly Judge Kühnen argues that royalties should be the same regardless of which entity in the chain the patent owner extracts the royalty from (end user, component manufacturer, etc.).  And as a matter of economics, I think he's right.

Wednesday, November 20, 2019

Huawei Will Have to Pay Attorneys' Fees in FRAND Dispute

The case is Optis Wireless Tech., LLC v. Huawei Device USA, IncEarlier in the litigation, the jury found that Huawei had willfully infringed certain patents, including four FRAND-committed SEPs, and awarded damages in the amount of $10.5 million.  (For previous discussion on this blog, see here.)  The court subsequently enhanced the damages in the amount of 25%.  As reported on Bloomberg earlier this week, this past Friday the court concluded that the case was "exceptional" and indicated that it would award attorneys' fees.  From the opinion (pp. 7-8):
Much of the conduct PanOptis complains of would not give rise to an exceptional case status if considered alone and separately but taken together within the totality of the circumstances this case stands out and is exceptional. Perhaps most egregiously, Huawei’s strategic withdrawal of its FRAND affirmative defenses immediately following the jury trial (while the jury deliberated) but immediately prior to the beginning of the bench trial was nothing less than rank gamesmanship that crossed the line of zealous advocacy. . . .
As a result, the court says it will award PanOptis "all its attorneys' fees and expenses incurred herein," and directs the plaintiffs to identify their expenses within 30 days.

Monday, November 18, 2019

Some New Papers, Posts on Patent Damages and Other Issues

1.  Suneal Bedi and David Reibstein have posted a paper titled Errors in Estimating Patent and Class Action DamagesHere is a link to the paper, and here is the abstract:
How much are consumers willing to pay for the rounded edges of an iPhone? How much more are consumers willing to pay for a soap that kills 99% of bacteria as opposed to 90%? Answering these questions is at the heart of estimating damage awards for patent infringement and false advertising class action lawsuits respectively. But these questions are difficult and often require the use of social science experts. These experts use complicated empirical black box methodologies to introduce opinions leading to billions of dollars of damages.
One such method that has gained much traction in federal courts is “choice based conjoint.” This method seeks to answer how much consumers are willing to pay for various features of products. Although a powerful and widely accepted method outside of the law, it is currently being misused in its application to patent infringement and false advertising lawsuits. Experts have been applying the method incorrectly and judges, lawyers, and litigants are not adequately policing the use of the method.
In this article, we explain how the method applies to the legal context and open up the proverbial black box so that legal practitioners can be savvy consumers of the method. More importantly, we empirically show through our novel experimental design and using Hierarchical Bayes estimation, how the method often has been inappropriately applied in the legal context and used to validate unjust, excessive, and unrealistic damage awards. 
2.  Jason Shull published an expert analysis on Law360 titled Fed. Circ. Standard on Patent Damages Needs Clarity.  The article discusses the Federal Circuit's case law on apportioning damages in cases involving multicomponent products, including LaserDynamics, VirnetX, Exmark, Sprint, and Elbit.

3.  Also on Law360, Matthew Butlman published an essay titled How to Win a Patent Damages Battle, advising lawyers to, among other things, find a personable expert, use "anchors" effectively, and bring the math to life.

4.  Readers of this blog will also be interested in Florian Mueller's two recent posts on this conference last week on component level licensing, which include the speakers' slides (see here and here). 

Thursday, November 14, 2019

Sedona Conference FRAND Publication

I just received an announcement concerning the publication of The Sedona Conference Framework for Analysis of Standard-Essential Patent (SEP) and Fair, Reasonable, and Non-Discriminatory (FRAND) Licensing and Royalty Issues (Stage Two), Public Comment Version.  Interested readers can access the document here.

Wednesday, November 13, 2019

Federal Circuit Leaves Open the Question of Whether an Award of Profits Is a Question of Law in a Design Patent Case

In a precedential opinion handed down this morning, Columbia Sportswear North Am., Inc. v. Seirus Innovative Accessories, Inc., the court (1) affirms a judgment that the claims-in-suit of Columbia's utility patent are invalid; (2) reverses a grant of summary judgment that Seirus infringed Columbia's design patent; and (3) remands for a new trial on design patent infringement.  As an incident to (2) and (3), the court also vacates the $3 million jury award, stating (p.19):
The parties raise additional issues regarding the court’s damages award under 25 U.S.C. § 289. For example, Columbia argues that the § 289 remedy is one of disgorgement that should be tried to the bench. And there is a significant issue as to whether the proper article of manufacture in this case should be the HeatWave product actually sold or the fabric encompassing the design. Both of these issues are important, but we do not reach them because we have vacated the infringement finding. 
So, the court breaks no new ground, but does leave two important questions open--namely, whether an award of the defendant's profits is question of fact for the jury or a question of law for the judge (I'm inclined to think it is the latter, see, e.g., here); and how to determine the relevant "article of manufacture" for purposes of § 289.  For discussion of the article of manufacture issue, see, e.g., Professor Burstein's article here.

Tuesday, November 12, 2019

More Anti-Antisuit Injunction Injunctions

I heard about this yesterday, and now JUVE Patent has a short article on it:  IPCom has obtained not one but two anti-antisuit injunction injunctions against Lenovo, one in Paris and one in London, both directed against litigation in the U.S.  (Story here).  If I come across a copy of any written decisions by either court, I will pass them along.  I have nothing more to add at this point, other than that SEP disputes are certainly giving rise to some unusual procedural maneuvers.

In other news, on Written Description Professor Camilla Hrdy has a post on a new paper by Professor Elizabeth Rowe titled eBay, Permanent Injunctions, and Trade Secrets.  Although my blog focuses on patent remedies, I think many readers will be interested in Professor Rowe's empirical analysis of eBay in trade secret disputes.

Update (12-3-2019):  More on the Paris anti-antisuit injunction on IPKat here.

Monday, November 11, 2019

AIPPI Study Reports on IP Damages for Acts Other Than Sales

A few weeks back I received my copy of the July 2019 issue of A.I.P.P.I.--Journal of the Japanese Group of AIPPI, which includes (beginning at p.256) AIPPI Japan's answers to AIPPI's 2019 Study Question (General), "IP damages for acts other than sales."  I haven't read it all that carefully yet, but I was immediately drawn to question and answer 10, which asks "Should the subsequent export and sale of manufactured infringing goods change the quantification of damages?"  (AIPPI Japan's answer is no, although it further states that "damages should be available only to the extent that there is a sufficient causation between the infringing act and the loss," and that "damages cannot be recovered for the portion of the loss that is practically the same as the portion fo the loss covered by the damages already paid in relation to the manufacturing.")  This is, of course, the sort of question that is now being debated in the U.S. after the Supreme Court's WesternGeco decision last year.  (for recent discussion on this blog, see here.)  I have previously noted a couple of Japanese cases that appear more or less consistent with the principle that the patent owner can recover damages for losses suffered abroad that were proximately caused by an act of domestic infringement (see here).  Overall, I'm quite interested in this topic right now, and am planning to write something about it in the months to come; I also will be speaking on this topic at an event in Taiwan next month.  

Anyway, the article noted above then prompted me to see if other countries' responses were available on AIPPI's website, and they are (here).  I haven't looked through all of them yet but will start doing so.  I also would call interested readers' attention to AIPPI's Study Guidelines, which specifically note the extraterritorial damages issue in headings 21 and 22, as follows:
21) If the infringing activity is manufacturing, should it be assumed that all of the manufactured goods will be sold in the jurisdiction (X) where they were manufactured?
22) If it is not assumed that all of the manufactured goods are sold in the jurisdiction (X) they are manufactured in, and some proportion will be exported for sale in jurisdictions Y and Z, should it be assumed that the right holder’s loss / a reasonable royalty can be determined on the basis of:
- Manufacturing in jurisdiction X alone;
- Sales in jurisdictions Y and Z, and if so, how do two potentially different sale prices in jurisdiction Y and Z affect the calculation; and/or
- A combination of manufacturing (in X) and sales (in Y and/or Z), and if so, what combination?
The AIPPI Summary Report summarizes the members' views under heading 10 (page 7), while the  AIPPI Resolution proposes that courts should strive for "full compensation" (heading 3) and under heading 4 states that "When quantifying damages for infringing non-sales acts relating to specific products, any potential subsequent sales of the same specific products (whether infringing or non-infringing, and whether in the same jurisdiction or not) could be used as a benchmark for the quantification. The objective is to determine the economic effect of the non-sales infringement on the right holder."

Friday, November 8, 2019

New Papers on FRAND, SEP Issues Part 2

1.  Jan Boone, Florian Schuett, and E. Tarantino have posted a paper titled Price Commitments in Standard Setting under Asymmetric Information.  Here is a link to the paper, and here is the abstract:
Many observers have voiced concerns that standards create essentiality and thus monopoly power for the holders of standard essential patents (SEPs). To address these concerns, Lerner and Tirole (2015) advocate structured price commitments, whereby SEP holders commit to the maximum royalty they would charge were their technology included in the standard. We consider a setting in which a technology implementer holds private information about demand. In this setting, price commitments increase efficiency not only by curbing SEP holders’ market power, but also by alleviating distortions in the design of the royalty scheme. In the absence of price commitments, the SEP holder distorts the implementer’s output downward in the low-demand state to reduce the high-demand type’s information rent. Price commitments reduce this distortion.
2.  J. Gregory Sidak has posted a paper titled Misconceptions Concerning the Use of Hedonic Prices to Determine FRAND or RAND Royalties for Standard-Essential Patents, 4 Criterion J. Innov. 501 (2019).  Here is a link, and here is the abstract:
Two months after I published Hedonic Prices and Patent Royalties in August 2017, Dr. Allan Shampine of the CompassLexecon economic consultancy published a review of that article arguing that the hedonic price model for LRDIMMs does not comply with the Federal Circuit’s decision in Ericsson Inc. v. D-Link Systems, Inc. Shampine’s criticisms of the hedonic price model rest on incorrect premises of law and economics. He criticizes the model for failing to apply the ex ante incremental value approach — a theory that contends that a FRAND or RAND royalty should not exceed the incremental value of the patented technology over the next-best alternative available at the time of standard adoption. Yet, like many economists, Shampine erroneously assumes that the ex ante incremental value approach is a positive principle of law, rather than merely a normative prescription that he happens to favor. He fails to recognize that the hedonic price model separates the value of the patented technology from the value of standardization, such that the model faithfully complies with the Federal Circuit’s apportionment requirement reiterated in Ericsson v. D-Link. Shampine also criticizes the hedonic price model for relying on data that became available after the moment of standard adoption. He then proposes — as an alternative to the hedonic price model — reliance on hypothetical data concerning consumer demand that typically would not exist at the time of standard adoption. His suggested approach would fail Daubert because it is manifestly unreliable and unscientific. In contrast, the econometric methodology that the hedonic price model employs has passed muster under Daubert in at least one publicly reported federal district court case concerning SEPs. In sum, Shampine’s criticisms do not detract from the reliability and usefulness of hedonic price analysis in calculating a FRAND or RAND royalty for a given SEP or portfolio of SEPs. To the contrary, if embraced, Shampine’s suggestions would reduce the intellectual rigor, replicability, and reliability of expert economic testimony concerning the calculation of a FRAND or RAND royalty.  
The Shampine paper that Mr. Sidak is responding to is available on the Antitrust Source's website here.

3.  Matthew Spitzer has published a short article titled FTC v. Qualcomm:  Origins and Problems on the Competition Policy International blog, arguing that "the circumstances under which the FTC chose to bring this case should lead everyone, including the Court of Appeals, to view this case with skepticism."  (Needless to say, I disagree.)  Elsewhere, Florian Mueller published several posts on the recently concluded Unwired Planet hearings before the U.K. Supreme Court (all available here), and Amy Sandys has a discussion of the hearings (titled Untangling the wires of global FRAND) on JUVE PatentLaw360 published an article titled US Gov't Wades into HTC-Ericsson License Dispute, discussing the DOJ's recent filing of an amicus brief in the pending appeal in HTC Corp. v. Telefonaktienbolaget LM Ericsson.  The Department also recently filed a statement of interest in a district court case, Lenovo v. IPCom, arguing that it is not a violation of U.S. antitrust law to seek an injunction for the infringement of a FRAND-committed SEP.

Wednesday, November 6, 2019

New Papers, Posts on FRAND, SEP Issues

1.  King Fung Tsang and Jyh-An Lee have posted on ssrn a paper titled Unfriendly Choice of Law in FRAND , 59 Va. J. Int'l L. 220 (2019).  Here is a link to the paper, and here is the abstract:
Standards are technical specifications providing a common design for products or processes to function compatibly with others. Standards are pervasive in various communications and platform technologies since they facilitate interoperability between different products. These technical standards inevitably cover a large number of patented technologies standard implementers must use, which are referred to as standard-essential patents (SEPs). SEPs are normally subject to fair, reasonable, and non-discriminatory (FRAND) terms based on SEP holders’ declarations made to voluntary associations known as standard-setting organizations (SSOs) or standards-development organizations (SDOs). In recent years, the increasing use of standards and SEPs has led to an increased number of lawsuits relevant to the interpretation and enforcement of FRAND terms. As a result, legal issues surrounding FRAND have become a subject of litigation and academic debate. This Article is an endeavor to fill the gap in academic literature on the choice-of-law issues relating to FRAND. It seeks to provide readers with a deeper understanding of the choice-of-law issues as revealed by key judicial precedents around the world. Ultimately, this research attempts to suggest practical solutions that may mitigate, if not resolve, the choice-of-law issues.
2. On a somewhat related note, Léon Dijkman published a post on IPKat titled How and where may implementers sue for FRAND-licences, discussing a recent decision of the Patents Court for England and Wales dismissing a claim brought by Vestel Elektronik Saneyi on jurisdictional grounds. 

3.  Jay Kesan and Carol Hayes have posted a paper titled Standard Setting Organizations and FRAND Licensing, Competition Policy and Intellectual Property in Today's Global Economy (Robert D. Anderson, Nuno Pires De Carvalho and Antony Taubman eds., Cambridge Univ. Press, 2020) (forthcoming).  Here is a link, and here is the abstract:
This chapter reviews the law and policy relating to Standard Setting Organizations (SSOs) and the FRAND commitment. To improve interoperability, we need technology standards, and to create them, we need industry members to work together in standard-setting organizations (SSOs). To ensure that the technology standards can be broadly adopted, the SSOs often need patent owners to promise to make standard-essential patents (SEPs) available to all manufacturers for a fair, reasonable, and non-discriminatory (FRAND) royalty.
The legal effect of such FRAND commitments is not yet settled, leading to a considerable amount of litigation in the United States and around the world. This lack of clarity is especially problematic when the dispute is international because jurisdictions may view these commitments very differently.
There are many issues relating to FRAND commitments, including: (1) what makes a patent 'essential' to a standard; (2) whether the FRAND obligation transfers to subsequent assignees of the patent; (3) whether FRAND commitments should apply to patents acquired after making the FRAND commitment (i.e., after-acquired patents); (4) whether nonmembers of the SSO should have the same standing as SSO members to enforce FRAND commitments; and (5) whether the FRAND commitment should impact remedies available in patent litigation, either from the perspective of the patent owner or the beneficiary of the FRAND commitment. As the law surrounding FRAND commitments develops, the legal community should be wary of abuses on both sides. While patent owners should not be permitted to abuse the added leverage that owning a SEP provides, the FRAND commitment must not be abused by standard adopters who take advantage of the fact that a SEP owner cannot simply deny a license.
To be meaningful, a FRAND commitment should be enforceable against a SEP owner’s successor-in-interest, and injunctions for SEP infringement should be issued under limited circumstances. Ultimately, policy concerns require the balancing of many different interests in order to ensure a healthy market for technology. 

Monday, November 4, 2019

News on Injunctions

1.  In August, Annsley Merelle Ward published a post on IPKat titled Irish Supreme Court in Merck v. Clonmel puts "adequacy of damages" back in the balance when granting preliminary injunctions.  The post includes an analysis by Colette Brady on a recent Irish Supreme Court opinion in Merck Sharp & Dohme Corp. v. Clonmel Healthcare Limited that modifies the application of the standard for granting a preliminary injunction.  The standard in Ireland is the same as the English American Cyanamid standard, but until this case the Irish courts tended to deny preliminary injunctions if, in their view, damages would provide an adequate remedy.  The new understanding of the standard requires the courts to consider adequacy as part of the overall balance of convenience inquiry (even while stating that "The most important element in that balance is, in most cases, the question of adequacy of damages" (para. 64(4)). 

For more on the American Cyanamid standard, see my book Comparative Patent Remedies at pp. 176-79. 

2.  Rafael García Pérez published a paper in 2016 that I only recently came across, titled Injunctions in Intellectual Property Cases:  What Is the Power of the Courts?, 1 I.P.Q. 87 (2016).  Here is the abstract:
This article argues that even after the enactment of Directive 2004/48 on the enforcement of intellectual property rights, the English courts retain a discretionary power to grant injunctions in intellectual property cases. It is suggested that the traditional tenets regarding the exercise of discretion in granting injunctions are still valid, and that the principles enshrined in art.3 of the Directive (efficacy, proportionality, dissuasiveness, etc.) come into play once the court has decided to grant an injunction, as benchmarks to model it. Moreover, the article proposes an interpretation of art.12 of the Directive ("alternative measures"), based on the distinction between cases in which damages in lieu of an injunction are awarded to the benefit of the infringer, and cases in which an injunction is granted to the benefit of the intellectual property owner.
3.  Song Jian published an article titled Overview and Analysis of Apple and Qualcomm's Global Battle, China Patents & Trademarks No. 3, 96-104 (2019).  The article discusses the Apple/Qualcomm disputes in China, the U.S., and Germany, including the temporary injunctions entered against Apple by the Fuzhou Intermediate Court in November 2018.