Posts Tagged: "FRAND"

Cellular Wireless Standard Essential Patents: A Survey of FRAND-Related Statements

Over the years, several entities have published statements related to licensing 4G/5G cellular wireless Standard Essential Patents (SEPs) on a Fair, Reasonable and Non-Discriminatory (FRAND) basis.  These include entities that are primarily licensors of SEPs, entities who sell network equipment products or components and who are also significant licensors of SEPs, entities who sell end user products and who are significant licensees of SEPs, an association focused on FRAND policy development and a patent pool.  An analysis of these statements reveals several common themes, but also a wide range of opinions on such issues. Below is the first in a series of articles that will review these statements with a view to highlighting some of these differing viewpoints, and provides context for these statements by way of reference to the policies of standards setting organizations and related legal pronouncements.

SCOTUS Denial of TCL v. Ericsson Petition Means Juries Decide Damages for SEP Infringement

On October 5, the United States Supreme Court denied TCL Communication’s petition for certiorari in TCL Communication Technology Holdings Ltd. V. Telefonaktiebolaget LM Ericsson. Of course, the issue wasn’t quite as simple or straight forward as TCL suggested. While Ericsson was under a FRAND obligation, TCL was engaging in infringing activities during a period in which they had no license to use the Ericsson patents. Thus, the threshold question was really whether the relief sought was equitable or legal in nature. The United States Court of Appeals for the Federal Circuit, in an opinion authored by Judge Raymond Chen and joined by Judges Pauline Newman and Todd Hughes, determined that the payment for past infringing activities sought a legal remedy requiring a jury trial under the Seventh Amendment to the U.S. Constitution. The Supreme Court’s decision not to grant certiorari lets stand this decision.

The UK’s Need to Protect Its Position at Home and Abroad: A Commentary on the UK Supreme Court Ruling in the Conversant Cases

Standards such as WiFi, GSM, 2G, 3G or 4G/LTE have been central to connecting the world. During the Covid-19 crisis, it was thanks to the technologies these standards enable that the global economy did not totally collapse. As we “zoomed” our way through self-isolation, the UK Supreme Court issued a landmark judgment, as reported by IPWatchdog. The decision addresses the cross-border enforcement of standard essential patents. Standard essential patents (SEPs) need to be addressed on FRAND (fair, reasonable and non-discriminatory) terms. FRAND aims at addressing anti-competitive conduct that can stem from matching patent law with standardization. Because these standards enable interconnectivity, they are of great importance.

UK Supreme Court Affirms Jurisdiction of English Courts in SEP Cases

In a ruling concerning patent portfolios owned by Unwired Planet and Conversant, the UK Supreme Court has upheld lower decisions that English courts can determine fair, reasonable and non-discriminatory (FRAND) terms for worldwide patent licenses, and grant injunctions. The Court’s unanimous judgment in the three cases (Unwired Planet International Ltd and another v Huawei Technologies (UK) Co Ltd and another, Huawei Technologies Co Ltd and another v Conversant Wireless Licensing SÀRL and ZTE Corporation and another v Conversant Wireless Licensing SÀRL [2020] UKSC 37) was issued today (August 26), after the Court heard arguments in October 2019.

Qualcomm Vindicated in Ninth Circuit Reversal of California Court’s Antitrust Ruling

The U.S. Court of Appeals for the Ninth Circuit today vacated a decision of the U.S. District Court for the Northern District of California finding that Qualcomm had engaged in unlawful licensing practices and reversed a permanent, worldwide injunction against several of Qualcomm’s core business practices. In May 2019, Judge Lucy Koh issued a 233-page order finding that Qualcomm had engaged in unlawful licensing practices and ordered in part that Qualcomm “must make exhaustive SEP licenses available to modem-chip suppliers on fair, reasonable, and non-discriminatory (“FRAND”) terms and to submit, as necessary, to arbitral or judicial dispute resolution to determine such terms…[and] submit to compliance and monitoring procedures for a period of seven (7) years.” Koh’s ruling was widely criticized, and today’s unanimous opinion was a total reversal of her findings.

Mystery Science: What Lemley and His Colleagues Get Wrong in Their Push for SCOTUS to Review TCL v. Ericsson

In December 2019, the United States Court of Appeals for the Federal Circuit issued a decision in a standard essential patent (SEP) appeal involving Ericsson and TCL Communication Technology—a closely watched case that many thought would shed light on what constitutes a FRAND (fair, reasonable and non-discriminatory) offer of a licensing royalty rate relative to standard essential patents (SEPs). TCL appealed the decision to the U.S. Supreme Court on May 1 and several amicus briefs have now been filed in support of the petition being granted. Below are excerpts taken from the Summary of the Argument and the introduction to the Argument in the amicus filing by Mark Lemley and other professors. I’ve taken the liberty of providing my thoughts in the format of comments from the peanut gallery, or perhaps as a patent law equivalent to Mystery Science Theater 3000.

The New U.S. Essential Patents Statement – Safeguarding the Integrity of the Patent System

In withdrawing the 2013 statement, the new 2019 guidance by the DOJ, NIST and the USPTO states the obvious, i.e. that there is no difference in the law between F/RAND assured standard essential patents and all other patents. While some would have perhaps liked to break the unitarity approach of the patent system so as to weaken remedies against the infringement of essential patents, a legal system that would apply a different standard to standard essential patents as opposed to other patents would violate U.S. trade obligations.

Antitrust and Patents: A Conversation with Makan Delrahim

Last week, as a part of the Virtual Patent Masters™ Program hosted by IPWatchdog, I had the opportunity to interview Makan Delrahim, who is Assistant Attorney General in charge of the Antitrust Division at the U.S. Department of Justice (DOJ). During his tenure at the Antitrust Division, AAG Delrahim has moved the policy of the federal government in a direction that is viewed as being more friendly to patent owners and innovators. For example, in December 2018, Delrahim indicated that the Antitrust Division was withdrawing its assent to the to the 2013 joint DOJ-U.S. Patent and Trademark Office Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments (the 2013 Joint Policy Statement) during remarks delivered at the 19th Annual Berkeley-Stanford Advanced Patent Law Institute. It was the Delrahim’s view that patent remedies shouldn’t be unilaterally unavailable for one category of patent simply because the patent owner may be subject to an obligation to engage in fair, reasonable and non-discriminatory negotiations with implementers.

Anticompetitive or Hyper-Competitive? An Analysis of the FTC v. Qualcomm Oral Argument

On February 13, the Ninth Circuit heard oral argument in the FTC v. Qualcomm case. Counsel for Qualcomm and the Federal Trade Commission (FTC) argued primarily about whether Qualcomm’s behavior resulted in anticompetitive harm, while the attorney from the Department of Justice, which had been granted five minutes to argue on Qualcomm’s behalf, faced tough questions about claims that the district court’s injunction posed a threat to national security. While the DOJ’s intervention in this case is interesting, the best summation of the argument came from the bench when Judge Stephen Murphy, District Court Judge of the Eastern District of Michigan sitting by designation stated: “Anticompetitive behavior is prohibited under the Sherman Act. Hyper-competitive behavior is not. This case asks us to draw the line between the two.”

Clearing Up Confusion on SEPs: A Line-by-Line Response to a Problematic Essay

I recently became frustrated after reading an essay in the AIPLA newsletter by an attorney with Taft Stettinius & Hollister LLP on the topic of the new USPTO-DOJ-NIST Joint Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments. I have seldom seen a writing where I disagree with everything a man writes, with the exception of a joke and his name. I took it apart paragraph by paragraph; my comments follow in red, while the author’s original text is in black.

Ericsson Wins, But CAFC Dodges Whether Offers Were FRAND

Earlier today, the United States Court of Appeals for the Federal Circuit issued a decision in a standard essential patent (SEP) appeal involving Ericsson and TCL Communication Technology—a closely watched case that many hoped would produce some case law relating to what constitutes a FRAND (fair, reasonable and non-discriminatory) offer of a licensing royalty rate relative to SEPs. See TCL Communication Technology Holdings Ltd. V. Telefonaktiebolaget LM Ericsson, No. 2018-1363, 2018-1732 (Fed. Cir. Dec. 5, 2019). Because the Federal Circuit determined that Ericsson was deprived of its constitutional right to a jury trial, the district court decision was reversed, and the case remanded for further proceedings. However, the question of whether Ericsson’s offers to TCL qualified as FRAND offers were not reached by the Federal Circuit.

Netlist Wins ITC Exclusion Order: Will the USPTO Support It?

Several weeks ago, the International Trade Commission (ITC) announced that Chief Administrative Law Judge (ALJ) Charles Bullock issued a Notice of Initial Final Determination recommending that certain memory modules manufactured and imported by SK Hynix, Inc. and its subsidiaries should be excluded from importation into the United States. As is common with these announcements, the ITC first released a one-page indication of the decision, which was followed by the redacted full decision once the parties had an opportunity to request redaction of trade secrets and confidential information. The full decision has now been released, and the ITC is asking for comments relating to public interest issues from the parties, interested persons, and other government agencies and departments.

UK Supreme Court Rules on Employee Compensation for ‘Outstanding Benefit’ of Invention, Hears Arguments in High-Profile FRAND Cases

A professor is entitled to a payment of £2 million (about $2.5 million) from his former employer due to the “outstanding benefit” from his invention, the UK Supreme Court has ruled. The judgment was handed down on October 23, eight months after the Court heard the case and some 37 years after the invention was conceived. Cases over outstanding benefit in the UK are rare, and the amounts involved relatively small. But this decision by the Supreme Court may embolden inventors to bring more applications for compensation, given the clarification of what constitutes “outstanding benefit,” particularly in the context of large, diverse businesses.

Tillis and Coons Nudge DOJ to Provide Revised Joint Statement on SEPs

Senators Thom Tillis (R-NC) and Chris Coons (D-DE), Chair and Ranking Member, respectively, of the Senate Judiciary Committee’s Subcommittee on Intellectual Property, sent a letter on October 21 to U.S. Attorney General William Barr and Assistant U.S. Attorney General, Antitrust Division, Makan Delrahim, asking them to “work with the United States Patent and Trademark Office (USPTO) to provide guidance on remedies for infringement of standard-essential patents (SEPs) subject to fair, reasonable and nondiscriminatory (FRAND) licensing commitments.” Tillis and Coons applauded the Department of Justice (DOJ), Antitrust Division’s decision to withdraw from the 2013 joint DOJ-U.S. Patent and Trademark Office “Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments,” but expressed concerns over a “growing divide” among the Department of Justice, the Federal Trade Commission (FTC) and the USPTO about the role of antitrust law in policing SEPs.

Patent Masters™ Agree on Recommendations to Curb Harm to SEPs and Overreach of Antitrust Law

Standard Setting Organizations (SSOs) exist to identify and select the best innovations entire industries will build upon. Those contributing patented technologies are asked to provide fair, reasonable and non-discriminatory assurances. In essence, patent owners contributing technologies are committing to provide access to their Standard Essential Patents (SEPs). Whether one thinks it is good or bad, it is an inescapable truth that over the last decade the patent system in the United States has become weakened. The weakened patent system, and a patent grant the Supreme Court now considers to be a “government franchise,” has shifted leverage from patent owners to technology implementers. Amidst this uncertainty, in September IPWatchdog.com held a two-day symposium to discuss the state of standard essential patents in the United States. During this symposium, overwhelming consensus was achieved by the Patent Masters™ faculty and symposium attendees on a variety of principles and recommendations.