While Standard Setting Organizations (SSO) activities are recognized as potential sources of economic efficiency, the nature of the SSO process facilitates and requires communication and agreement among parties that may otherwise compete in the marketplace, thus leading to antitrust agencies and private counsels to require caution in the standard setting process. The industry-wide, international scope of technological agreement in SSO activities is a potential source of market power for intellectual property owners. The risk of such market power has led technology adopters to seek assurances from technology contributing SSO participants that technologies adopted in the standard are made available on FRAND terms. In addition, it has become increasingly common for technology contributors to provide FRAND commitments in conjunction with their SSO participation. Recent decisions by China, U.S. and the U.K courts and regulatory agencies have clarified that FRAND commitments can be binding on technology contributors, and that determination of FRAND royalty rates on standard essential technology can be meaningfully different from that applicable to technology unencumbered by FRAND commitments. More specifically, determination of FRAND royalty rates likely requires inquiry into the apportionment of inherent technology value from value that resulted from the SSO process and standard itself.
The ruling is important because it may address key issues arising from the international nature of Standard-Essential Patent (SEP) licensing transactions and the manner in which national court decisions can impact global business and litigation strategies. These issues have risen to prominence in recent years with the increasing assertion of SEPs by Patent Assertion Entities (PAEs) and the transfer of SEPs by producing firms to PAEs.
Mr Thomas Raphael QC will lecture on the current developing international practices on how and where to decide FRAND cases, and consider whether it makes sense. He will include, ‘Who decides? What should the courts decide on? How should the courts determine who can enforce what obligations, the relief that can be sought for infringements and how a FRAND rate is decided – and the implications of these on parties to a FRAND negotiation or deal? And how should they shape their remedies?’’
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