Thursday, December 8, 2022

Shapiro and Waehrer on FTC v. Qualcomm

Carl Shapiro and Keith Waehrer have published an interesting short paper titled Federal Trade Commission vs. Qualcomm: Mangling MicroeconomicsHere is a link to the paper, and here is the abstract:


            This paper provides an economic analysis of the antitrust case brought by the Federal Trade Commission against Qualcomm regarding Qualcomm's "no-license/no-chips" policy. Under that policy, Qualcomm refused to sell its modem chips to cell-phone manufacturers such as Apple, Samsung, and Motorola unless they had agreed to pay Qualcomm’s preferred royalty for its standard-essential patents on devices containing modem chips sold by Qualcomm’s competitors. We show that this policy raised the costs of Qualcomm's modem-chip rivals and thereby enhanced Qualcomm's market power over modem chips, harming Qualcomm's customers and final consumers. The District Court agreed with this analysis, but the Appeals Court reversed, making basic errors in microeconomics that we specifically identify.

Monday, December 5, 2022

Leistner on Discretionary Stays of Injunctive Relief in the Unified Patent Court

Under what circumstances, if any, do judges of the Unified Patent Court have discretion to stay or deny injunctive relief?  This is a topic that is sure to come up soon, with the court set to begin operations on June 1, 2023.  The most relevant portions of the Unified Patent Court Agreement (hereafter UPCA) are articles 25, 26, and 63, which read as follows:


            Article 25 Right to prevent the direct use of the invention


           A patent shall confer on its proprietor the right to prevent any third party not having the proprietor's consent from the following: (a) making, offering, placing on the market or using a product which is the subject-matter of the patent, or importing or storing the product for those purposes; (b) using a process which is the subject-matter of the patent or, where the third party knows, or should have known, that the use of the process is prohibited without the consent of the patent proprietor, offering the process for use within the territory of the Contracting Member States in which that patent has effect; (c) offering, placing on the market, using, or importing or storing for those purposes a product obtained directly by a process which is the subject-matter of the patent.


            Article 26 Right to prevent the indirect use of the invention


            1. A patent shall confer on its proprietor the right to prevent any third party not having the proprietor’s consent from supplying or offering to supply, within the territory of the Contracting Member States in which that patent has effect, any person other than a party entitled to exploit the patented invention, with means, relating to an essential element of that invention, for putting it into effect therein, when the third party knows, or should have known, that those means are suitable and intended for putting that invention into effect.


            2. Paragraph 1 shall not apply when the means are staple commercial products, except where the third party induces the person supplied to perform any of the acts prohibited by Article 25.


            3. Persons performing the acts referred to in Article 27(a) to (e) shall not be considered to be parties entitled to exploit the invention within the meaning of paragraph 1.


            Article 63 Permanent injunctions


            1. Where a decision is taken finding an infringement of a patent, the Court may grant an injunction against the infringer aimed at prohibiting the continuation of the infringement. The Court may also grant such injunction against an intermediary whose services are being used by a third party to infringe a patent.


            2. Where appropriate, non-compliance with the injunction referred to in paragraph 1 shall be subject to a recurring penalty payment payable to the Court

In this regard, Professor Matthias Leistner has published an article titled Unterlassungsverfügung im Einheitspatentsystem:  Ermessensspielraum oder gebundene Entscheidung? (“Injunctions in the Unitary Patent System:  Room for Discretion, or Foregone Conclusion?”), 22/2022 GRUR 1633-44.  Here is the abstract, in my translation from the German:

            A central point of contention with respect to the forthcoming entry into force of the UPC concerns the question whether and in what form the Unified Patent Court has discretion regarding the granting of injunctions.  The practical significance of this question can hardly be overstated.  As a consequence, the question has been intensively discussed ever since the publication of the Unified Patent Court Agreement in 2013.  This essay argues for a discretionary authority, regarding both resolution and form of relief, that is strictly tied to articles 25 and 26 of the UPCA as well as the relevant EU standards, within the framework of article 63 of the UPCA.  That includes the possibility of awarding the patent owner additional monetary payments in cases involving the exceptional limitation on injunctive relief.

If I understand correctly, the author argues that article 63 confers upon the court a strictly-constrained discretion to limit injunctive relief—to delay the enforcement of an injunction or limit its applicability —where the infringer or third parties otherwise would suffer disproportionate harm; and only in the most extreme cases to deny injunctive relief altogether.  Moreover, in cases in which the court exercises this authority it should award the patent owner additional compensation, that is, at some amount above the damages the owner otherwise would be entitled to.  Overall, the author proposes a high threshold for overcoming injunctive relief, coupled with wide discretionary power (including the power to assess monetary payment) once that threshold is exceeded.

Thursday, December 1, 2022

OxFirst Webinar on FRAND

OxFirst will be putting on a free webinar tomorrow (December 2) from 15:00 to 16:00 GMT titled "Perspectives on the Valuation of FRAND, Injunctions, and Licensing Commitments in the UK."  Here is OxFirst's description:


The panelists will present on their analysis of FRAND valuation methods and licensing commitments arising from Unwired Planet vs Huawei. Maurits Dolmans will present his recent paper ‘FRAND licensing commitments – Back to first principles’ where he argues for a re-evaluation of the Supreme Court’s decision in the case and suggests the court should have looked at competition law differently. Dr Roya Ghafele, OxFirst Director, will present her paper, ‘A valuation perspective on the FRAND injunction issued in Unwired Planet vs Huawei’, in which she presents an analysis of the valuation methods used in the case to allow a quantification of the value of a FRAND injection. Both papers feature in World Patent Information’s special collection on Standard Essential Patents and the discussion will be moderated by Jane List, Editor-in-Chief of World Patent Information. 

 Registration is available here.