1. Oscar Bongorgno and Giuseppe Colangelo have posted a paper on ssrn titled Disentangling the FRAND Conundrum. Here is a link to the paper, and here is the abstract:
Courts, antitrust authorities, and policy makers across the world have been over concerned by holdup risks involving the strategic use of standard essential patents (SEPs). In order to avoid or at least mitigate holdup problems, it has been adopted the view that a fair, reasonable, and non-discriminatory (FRAND) commitment implies a waiver of the right to seek injunctions against infringers. However, contrary to the mainstream belief, there is no empirical evidence of structural and systematic problems of holdup and royalty stacking affecting SEPs licensing. Therefore, there is no convincing reason for laying down an exceptional antitrust treatment for FRAND-encumbered patents.
Problems afflicting SEP licensing stems from the lack of contractual or organizational solutions provided by standard setting organizations (SSOs) which exacerbates the risk of strategic behaviors. First and foremost, SSOs should require all SEP owners involved in a standardization process to disclose, ahead of the standard adoption, the most restrictive licensing terms. Secondly, since holdup and royalty stacking problems increase proportionally with the number of SEPs and many patents declared essential by SSOs lack this characteristic, essentiality checks carried out by independent third parties should be imposed to mitigate the risk of over-declaration.
I'm sympathetic to the points raised in the second paragraph, but not the first.
2. Peter George Picht has published an article in the November 2019 issue of GRUR (pp. 1097-1103) titled The future of FRAND Injunction. Here is the abstract:
The CJEU's famous Huawei/ZTE case has added a FRAND layer to general patent injunction law for SEPs. In spite of this specific grid, SEP/FRAND injunction litigation remains rampant, courts are both granting and denying injunctions. The present contribution reviews recent case law from Germany and the UK, assesses its achievments and shortcomings, discusses the impact of the general patent law discourse on a more proportionality based, more flexible granting of injunctions, and suggests some ways forward.
Professor Picht's observations in section VI ("Ways Forward") are definitely worth a read.
3. J. Gregory Sidak has published a paper titled Negotiating FRAND Licenses in Good Faith, 5 Criterion J. Innov. 1 (2020). Here's a link, and here's the abstract:
This article has two messages. First, any set of principles for defining whether a fair, reasonable, and nondiscriminatory (FRAND) negotiation has transpired in good faith must identify what economists who work on questions of market design call activity rules and closing rules. Judges, practicing lawyers, legal scholars, and government officials working on the defining of principles for good-faith negotiation of FRAND licenses for standard-essential patents (SEPs) have not recognized that need. Nor, to my knowledge, has any academic economist or expert economic witness commented on this lacuna.
Second, the American jurisprudence on offer, acceptance, and contract formation fortuitously has the clarity of an unambiguous closing rule, but the contract jurisprudence of other nations appears, at least to my American eyes, to be less clear. In my experience, the potential for there to be material variation across jurisdictions in the level of ambiguity of the legal principles for determining whether an SEP holder and an implementer have conducted their FRAND negotiation in good faith has received virtually no attention from judges, practicing lawyers, legal scholars, and government officials. And, to my knowledge, this issue has received absolutely no consideration from academic economists or expert economic witnesses testifying in FRAND disputes.
This phenomenon of differential ambiguity in matters of contract formation and good-faith negotiation has important practical implications because French law, which appears to be less emphatic than American law on such questions, often is the controlling law for interpreting the duties imposed by a FRAND contract because the European Telecommunications Standards Institute (ETSI) is so prominent in the setting of voluntary standards for wireless communication, and ETSI’s FRAND contract prescribes that French law controls. In contrast, New York law controls the Institute of Electrical and Electronics Engineers’ (IEEE’s) reasonable and nondiscriminatory (RAND) contract. Those legal differences in turn could influence the content and evidentiary relevance of expert testimony on questions of economic fact, such as the quantification of a FRAND or RAND royalty.
To begin the task of reducing legal and economic ambiguity concerning the determination of whether an SEP holder and an implementer have conducted a FRAND licensing negotiation in good faith, I have proposed here the formulation of a specific activity rule and a specific closing rule when American contract jurisprudence does not control interpretation of the FRAND contract in question. My proposed activity rule is that, in each round of offer and counteroffer—and to the extent that the SEP holder has not already discharged its contractual obligation to ETSI (such as by already having made a legitimately FRAND offer at the very outset of the negotiation)—a party must revise its bid or ask price by the minimum agreed-upon increment for that party to be deemed still to be negotiating in good faith. My proposed closing rule is that a party will be deemed to have made its final offer or counteroffer if it does not, within a commercially reasonable amount of time after receiving an offer or counteroffer, sweeten its price relative to its price in the previous round of offer and counteroffer. These rules of market design are proposals, which will surely benefit from scrutiny and refinement by others, but these proposals should suffice to invite a needed discussion.
Finally, because ETSI’s FRAND contract contains the distinctive (but evidently ambiguous) requirement that an SEP holder be “prepared to grant” licenses to its SEPs, I offer here one particular interpretation of that phrase that is explicitly informed by the economic analysis of law. Whether a court would find my suggested interpretation compatible with the principles of interpretation used in French contract law is a question I must leave to others better suited to the task.
4. Larry Sandell published an article on Law360 titled Litigating FRAND Rates After Fed. Circ. Ericsson Decision. Mr. Sandell advises, among other things, "certain best practices . . . for FRAND cases involving a retrospective 'release payment' claim for past unlicensed sale," and that litigators "focus on distilling a compelling, simplified story for the jury and adopt a mantra of 'substantial' evidence'".
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