David Teece and Edward Sherry ‘On Patent “Monopolies”: An Economic Re-Appraisal’ Antitrust Chronicle, Spring 2017

This paper – which you can find here – provides a short critical introduction to the intersection between IP and antitrust laws. It begins by pointing out the obvious:  in exchange for public disclosure, the patent system gives a successful patent applicant the right to exclude others from using the patented technology without her/his permission  for a period of time. The first instinct is to consider that this exclusivity amounts to a legal monopoly, which can make antitrust antennas start to tingle. However, it is now a truism that having an IP right does not mean one also has market power. Nonetheless, in the US a number of (older) decisions  refer to “patent monopolies.” This piece ask whether this “patent monopoly” language is useful, misleading, or something in between. Without surprise, the authors seek to argue that it is exceedingly misleading: simplistic assertions that patent rights constitute “monopolies” are not particularly informative or helpful. The argument starts by looking at the…

Unwired v Huawei [2017] EWHC 711 (Pat)

This judgment – which you can find here – is a recent UK court decision on FRAND terms. The factual background to this decision is convoluted (including five “technical” trials relating to the validity and infringement/essentiality of the relevant patents, which preceded the present trial regarding all competition law and FRAND issues), but the situation can be summarised shortly. Unwired Planet is a company that owns a number of worldwide patents, including many of the foundational technologies that allow mobile devices to connect to the Internet (4G, 3G and the like) – most of the relevant portfolio in this case was acquired from Ericsson. A number of these patents are essential to the relevant technical standards, and are thus deemed Standards Essential Patents (“SEPs”). The process of standardisation involves holders of patents which are essential to an international telecommunications standard declaring them to be essential to the relevant standards body –  in this case, the European  Telecommunications Standards Institute (“ETSI”). Standard…

Douglas Ginsburg, Koren Wong-Ewing and Joshua Wright ‘The Troubling Use of Antitrust to Regulate FRAND Licensing’ CPI Antitrust Chronicle October 2015 (1)

This paper – which can be found here – criticises the use of “antitrust sanctions on holders of standard essential patents (“SEPs”) for seeking injunctive relief against alleged infringers and for reneging on their commitment to license their patents on fair, reasonable, and non-discriminatory (“FRAND”) terms”.  They make two main criticisms of the use of antitrust to regulate FRAND licensing: First, they criticise the assumption, underpinning these developments, that patent “holdup” is a widespread problem that leads to significantly adverse consequences for competition and innovation. Instead, they argue that: (i) there is no empirical support for this assumption. On the contrary, sectors where SEPs are preponderant are among the most competitive ones around; (ii) as economic theory would predict, patent holders and those seeking to license and implement patented technologies write their contracts so as to minimize the probability of holdup; (iii) several mechanisms – including reputation and business costs – are available to transactors to mitigate the incidence and likelihood…

Pierre Larouche and Nicolo Zingales ‘Injunctive Relief in FRAND Disputes in the EU – Intellectual Property and Competition Law at the Remedies Stage’ in The Cambridge Handbook of Technical Standardization Law: Competition, Antitrust, and Patents (CUP, 2017) 406

This paper – which you can find here – asks: what does (EU) competition law have to do with FRAND? It is, as far as I’m concerned, a rather good question. The paper begins by sketching a basic model of standards-related IP licensing negotiations and related litigation. Competition issues tend to arise when two parties are negotiating over the licensing of a SEP and the SEP holder is under an obligation to grant licenses on fair, reasonable and non-discriminatory (FRAND) terms. This negotiation is framed by the parties’ ability to start judicial proceedings under IP Law: SEP holders can ask for injunctions in order to enforce their rights, while potential licensees can challenge the validity, infringement or essentiality of a SEP. A number of outcomes are possible in this context: (i) the parties may negotiate on the terms; (ii) the SEP holder may rely on its market power to holdup the licensee in order to obtain exorbitant royalties; (iii) the potential…

Jorge L. Contreras ‘FROM PRIVATE ORDERING TO PUBLIC LAW: THE LEGAL FRAMEWORKS GOVERNING STANDARDS-ESSENTIAL PATENTS’

This paper, focusing on the interaction of standards and international law, was published in the Harvard Journal of Law & Technology, and can be found here. It starts from the observation that there is a “basic question [about] whether technical standard setting is best conceptualized as a private activity governed most efficiently by its own internal rules and procedures, or whether it is at root a public activity that should be regulated within the sphere of public law.” The article proceeds as follows: after a general introduction to private ordering structures (i.e. rules systems that private actors conceive, observe, and often enforce through extra-legal means) in Part II, Parts III and IV describe how technical standard setting has evolved as a private sector activity. Part V analyses the incorporation of standards bodies’ rules and norms into private law adjudication. Part VI shifts the focus to the public benefits that standard setting affords, and Part VII describes the recent debate regarding public…