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.
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