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my take on it | 264 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
my take on it
Authored by: Anonymous on Wednesday, December 12 2012 @ 08:43 PM EST
The question becomes, what is a FRAND patent. Put simply, FRAND patents (in
the cell phone context) "are patents that cell phone makers must use to
communicate over specified telecommunications networks and therefore that
the patentee [] has committed to licensing to anyone on fair, reasonable, and
nondiscriminatory (acronym 'FRAND,' or sometimes 'RAND'—the word 'fair'
adds nothing to 'reasonable' and 'nondiscriminatory') terms, as required by
the standards-setting organizations as a condition of the patented
technology's being deemed essential to compliance with the standard."
Apple, Inc. v. Motorola, Inc., 869 F.Supp. 2d 901, 2012 WL 2376664 at *9
(N.D. Ill. 2012) (Posner, J.).

Can an injunction be sought in for a FRAND patent? At least one court, that I
happen to agree with, has emphatically said no. "To begin with Motorola's
injunctive claim, I don't see how, given FRAND, I would be justified in
enjoining Apple from infringing the ′898 unless Apple refuses to pay a
royalty
that meets the FRAND requirement. By committing to license its patents on
FRAND terms, Motorola committed to license the ′898 to anyone willing
to
pay a FRAND royalty and thus implicitly acknowledged that a royalty is
adequate compensation for a license to use that patent. How could it do
otherwise? How could it be permitted to enjoin Apple from using an invention
that it contends Apple must use if it wants to make a cell phone with UMTS
telecommunications capability—without which it would not be a cell phone."

Id. at *12. The opinion is in accord with, and relies upon, the Federal Trade

Commission' policy statement, "[i]n these ways, the threat of an exclusion

order (an injunction) may allow the holder of a RAND-encumbered SEP to
realize royalty rates that reflect patent hold-up, rather than the value of the

patent relative to alternatives." Id. In effect, allowing injunctive
relief for
FRAND patents would allow the extraction of monopoly rents for a FRAND
patent, thereby vitiating the entirety of their purpose; a party that has
bargained to gain exclusivity by lowering the cost can then turn around and
use their new monopoly power to extract higher costs via threat of injunction.

Moreover, allowing injunctive relief would contradict basic tenets of American
law; that injunctive relief is disfavored when monetary relief is adequate; the

very nature of a FRAND patent indicates that monetary relief is not only
adequate, but the preferred remedy. Id. at 13. See also Realtek
Semiconductor Corp. v. LSI Corp., 2012 WL 4845628 at *3 (N. D. Cal. 2012)
("RAND licensing obligations exist independent of whether parties attempt
to
negotiate a license"); Microsoft Corp. v. Motorola, Inc., 2012 WL 4477215
at
*10 ("injunctive relief against infringement is arguable inconsistent with
the
licensing commitment [for a FRAND patent]").

So that's some background case law. What do we have that I find troubling (in
addition to the cited cases, which do involve other cell phone companies that
are pursuing similar litigation strategies to Samsung wrt. FRAND)-

We have the recent case filed by Ericsson, which I referenced above, seeking a
declamatory judgment because of Samsung's attempted leverage of their
encumbered patents.

We have Apple v. Samsung. I am sure everyone on this site is familiar with the
complaint, so I don't need (I hope) to provide more citations to authority.

Of course, the law isn't crystal clear right now. One good (non-legal) unbiased

view is from an article in the Financial Times, available at:
http://www.ft.com/cms/s/2/215afb90-e86d-11e1-b724-
00144feab49a.html#axzz2EtLrvnYK

It shows that, inter alia, the schism developed in different jurisdictions over

the issue of injunctive relief for FRAND patents. Again, I think (and this is
*my
opinion*) that should the increasing use of SEPs for litigation advantage
become more prevalent (which I refer to as abuse), it will have much more dire
consequences than any of the stupid litigation that is always ongoing. I would
prefer the adoption of the Posner rule, and for the aggressive attempts to
weaponize SEPs to end.

[ Reply to This | Parent | # ]

  • my take on it - Authored by: Anonymous on Thursday, December 13 2012 @ 09:17 AM EST
    • my take on it - Authored by: Anonymous on Thursday, December 13 2012 @ 11:03 AM EST
      • my take on it - Authored by: Anonymous on Thursday, December 13 2012 @ 12:44 PM EST
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