Peter Georg Picht  ‘FRAND determination in TCL v. Ericsson and Unwired Planet v. Huawei: Same same but different?’ Max Planck Institute for Innovation & Competition Research Paper No. 18-07

This paper, which can be found here,  compares Unwired Planet/Huawei – a UK case reviewed here, and which appeal was discussed last week – and TCL/Ericsson, a US case. TCL deals with Ericsson-owned SEPs and Ericsson-granted licences, while Unwired Planet focuses on SEPs acquired by Unwired Planet from Ericsson. While looking at similar sets of facts, the courts arrived at different conclusions regarding how to determine FRAND royalty rates. This paper argues that this difference arises from the courts’ take on two core approaches in FRAND royalty calculation – “top-down” and “comparable prior licences” (‘Comparables’). Unwired Planet can be said to have favoured a ‘Comparables’ approach, while TCL looks more favourably at the top-down approach. The paper contends that both methods are important in FRAND licensing, it is unlikely that either a top-down or Comparables approach will – or should – prevail as the obviously best approach to complex cases. The paper is structured as follows: Section II provides the…

Gunther Friedl and Christoph Ann ‘A cost-based approach for calculating royalties for standard-essential patents (SEPs)’(2018) The Journal of World Intellectual Property 21 369

This article, which can be found here, proposes a novel approach for calculating FRAND royalties, based upon average total cost per patent plus a reasonable return for the patent holder. Unlike the methods discussed in the paper above – which focus on the value of a patent – this method is cost-based. The paper is structured as follows: An introductory section explains why standards are important and why FRAND obligations are imposed. A significant increase in the relevance of standards can be predicted in the near future. Industry 4.0 will greatly increase the degree to which industrial processes will depend upon the exchange of information not only between people, but also between toolkits, that is, between “hardware.” The same holds true for a number of new technologies such as autonomous driving, data compression, or 3D printing. Standard-setting organizations (SSOs) are tasked with the development and creation of standards by identifying and selecting the most suitable technologies for the standard. It goes…

Is there a duty to license Standard Essential Patents to competitors? FTC v Qualcomm Case 5:17-cv-00220-LHK C. Nor

This post will discuss a summary judgment by a district court in California – the one responsible for most cases in Silicon Valley – on whether Qualcomm’s refusal to license its Standard Essential Patents (SEPs) to competitors infringed the non-discrimination limb of RAND commitments and, by extension, s. 5 of the FTC Act. The decision is available here. Background Cellular communications depend on widely distributed networks that implement cellular communications standards. These standards promote availability and interoperability of standardized products regardless of geographic boundaries. Standard-setting organizations (“SSOs”) – such as the Telecommunications Industry Association (“TIA”) and the Alliance for Telecommunications Industry Solutions (“ATIS”) in the United States, and the European Telecommunications Standards Institute (“ETSI”) in Europe – have emerged to develop and manage the relevant cellular standards. The cellular communications standards that SSOs develop and adopt may incorporate patented technology. In order to prevent the owner of a patent essential to complying with the standard—the “SEP holder”—from blocking implementation of…

When is a licence FRAND? The Court of Appeal judgment in Unwired Planet v Huawei

This judgment – which can be found here – is on appeal from Unwired Planet v Huawei judgment on the licensing of Standard Essential Patents (SEP) that I reviewed here. The Court of Appeal begins by explaining the link between the potential for anticompetitive abuse of SEPs and the imposition of FRAND licensing terms. After all: ‘the potential for anti-competitive behaviour is obvious. The owner of a SEP has the potential ability to “hold-up” users after the adoption and publication of the standard either by refusing to license the SEP or by extracting excessive royalty fees for its use, and in that way to prevent competitors from gaining effective access to the standard and the part of the telecommunications market to which it relates.’ It then moves on to review the factual background of the case and the High Court’s decision. In short, Unwired Planet acquired patents from Ericson that cover many of the foundational technologies that allow mobile devices…

Sophie Lawrance and Edwin Bond on ‘Reverse-payment’ patent settlement agreements: non-cash value transfers are not immune from competition law scrutiny’ (2018) Journal of Intellectual Property Law & Practice 13(7) 552

This article – which can be found here – argues that a non-cash value transfer – particularly commitments by the producer of a branded drug not to launch a generic version of its drug – is able to bring a pay-for-delay agreement within the scope of the antitrust prohibition of reverse-payment patent settlement agreements. It does so as follows: The paper first looks at the law in the US as regards non-cash value transfer settlements. In its landmark 2013 FTC v, Actavis decision, the US Supreme Court held that pharmaceutical patent settlements which involve ‘large’ and ‘unexplained’ reverse payments may breach the antitrust rules. However, and as a result of the Supreme Court’s lack of detailed guidance, the lower US courts have in the last few years found themselves considering a fairly basic question: what constitutes a ‘payment’? While a couple of US district courts concluded that patent settlements that do not involve a cash transfer could not constitute unlawful…

Ashish Bharadwaj ‘A note on the neglected issue of reverse patent holdup’. (2018) Journal of Intellectual Property Law & Practice 13(7) 555

The purpose of this article – which can be found here – is to provide a comparative analysis of EU, US and Indian case law on reverse patent holdup in the context of standard essential patent licensing. The piece is structured as follows: The paper begins with a discussion of patent holdup and reverse holdup in general terms. Technological standards have become ubiquitous. Such standards foster interoperability, avoid inefficient rivalry between competing systems and facilitate competition in downstream product markets. It has been held that firms that commit their patents to a standard – and thereby own standard essential patents (SEPs) for the purposes of that standard – often abuse their dominant position by demanding excessive royalties or by seeking injunctive relief against infringers of their essential patents. Owning a SEP provides its holder with a certain amount of market power, because users of the standard must reach a licensing agreement with the patent holder. Theoretically, a SEP holder can…

Jessica C. Lai and Vikas Kathuria on ‘Restrictive Conditions” in patent law and the competition law interface’ (2018) Journal of World Intellectual Property law 21 256

This paper – which can be found here – examines the IP-competition interface in New Zealand, and compares it with Australia, India and the UK. A first section provides an overview of the interaction of IP and competition law in New Zealand. Section 66(1) of the Patents Act 1953 makes void any contractual condition that could be said to amount to patent-tying or to a patentee attempting to control a purchaser, lessee, or licensee’s ability to trade with third parties (the ‘restrictive conditions’). This provision is substantively similar to historical provisions in the UK which sought to ‘prevent a patentee from abusing his monopoly by placing restrictions on the acquisition and use of products other than the patented products.’ Any prohibited contractual condition also acted as a defence to patent infringement. In its 1949 Patents Act, the UK introduced a provision that allowed a vendee, leasee or licensee to terminate a contract related to a patent or patented invention that was no…

Jose Luis da Cruz Vilaca on ‘The intensity of judicial review in complex economic matters – recent competition law judgments of the Court of Justice of the EU’ (2018) Journal of Antitrust Enforcement 6(2) 173–188

The author of this paper, available here, was for a long time the President of the Court of First Instance (now the ECJ’s General Court). More importantly for our purposes here, he was also the CJEU judge responsible for drafting the Intel judgment. The paper is structured as follows: A first section reviews how EU courts approach judicial review in complex matters, and how this approach has evolved over time. For a number of years, the Court of Justice (ECJ) has taken a careful approach to the scope and intensity of review of Commission decisions as regards complex economic matters. From the outset, the Court conceived its role in competition matters as being limited to reviewing legality, and not as involving unlimited jurisdiction or full merits review (except as regards the imposition of fines). Since Consten & Grunding in 1966, the ECJ has acknowledged that the Commission must engage in complex evaluations of economic matters. The judicial review of these evaluations…

Rennato Nazzini ‘Fresh evidence on appeal in two-tier administrative enforcement systems’ and Despoina Mantzari ‘Navigating the admission of evidence on appeal’ (2018) Journal of Antitrust Enforcement 6(2) 281

A second and third paper contain a discussion between two scholars – Rennato Nazzini and Despoina Mantzari – on whether an appellant should be able to introduce fresh evidence during a judicial review before a court. The discussion concerns a decision by the UK’s Competition Appeal Tribunal (CAT) in Ping Europe Ltd v Competition and Markets Authority (CMA) – the CAT’s first decision on the admission of new evidence in appeal proceedings on the basis of rule 21(2) of the CAT Rules 2015. This was a ruling on an application by the CMA to exclude certain evidence adduced by Ping that, in the CMA’s view, Ping could and should have adduced during the administrative proceedings. The facts were as follow. The CMA claimed that Ping had infringed the Chapter I prohibition and Article 101 TFEU by prohibiting online sales of its golf equipment. In response to the statement of objections (SO), Ping argued, among other things, that its prohibition on…

The OECD Report on International Private Enforcement

Officially known as ‘Individual and Collective Private Enforcement of Competition Law: Insights for Mexico in 2018’, this Report was prepared with a view to advise Mexico on how to reform its private enforcement regime. The Report can be found here. Advising Mexico in this regard required the pursuit of a comprehensive overview of international experiences with private competition enforcement – with a focus on Europe and North America, but also looking beyond these regions. This project also required the identification of the various elements that comprise private enforcement regimes around the world, the various forms that each of these elements may take, and how these elements relate to one another. I may of course be mistaken, but I think there is no other work like this in the market. As such, I circulate the Report here because I think it can provide a useful reference for anyone working or interested in private enforcement.