Intellectual Property

In its analysis of Cont’l Auto. Sys., Inc. v. Avanci, L.L.C.,, the Fifth Circuit made several interesting findings: (1) that potential pass-through non-FRAND royalties are too speculative to create an injury in fact; (2) that SEP holders can fulfill their obligations to SSOs, with respect to suppliers, by actively licensing SEPs to downstream OEMs; and (3) that not all implementers are intended beneficiaries entitled to FRAND licenses.

As 2022 begins and intellectual property (IP) strategies are being developed for the new year, it is a good time to reflect on what IP issues were prominent in 2021.  According to many readers, hot topics included efficient and expeditious U.S. patent prosecution, new copyright and trademark laws, and standard essential patents (SEPs). Below are 5 of the most read IP Posts on Mintz.com from last year.

The DOJ is requesting public comment on a new draft policy concerning licensing negotiations and remedies for standards-essential patents (SEPs) subject to voluntary F/RAND commitments recently jointly issued by the U.S. Patent & Trademark Office (USPTO), the National Institute of Standards and Technology (NIST), and the U.S. Department of Justice, Antitrust Division (DOJ)(collectively, “the Agencies”).  The Agencies have requested comment on eleven questions until the comment period closes January 5, 2022.

Recent developments indicate that the UK is a favorable jurisdiction that owners of standard essential patents (“SEP”) can leverage to obtain appropriate SEP rates from what would otherwise be unwilling licensees. Demonstrating the point, a recent order from Justice Meade of the High Court in the sprawling Pan Optis/Unwired Planet SEP dispute with Apple provides an outline to the UK’s approach to handling SEP implementers who are unwilling to commit to court-determined FRAND licenses.

The United States FRAND jurisprudence had a recent watershed moment in a decision that is sure to reverberate through the standard essential patent (SEP) world, and specifically SEP litigation in the United States. Earlier this week, a Fifth Circuit panel affirmed a jury verdict that found licensing offers made by Ericsson to HTC for Ericsson’s 4G SEPs complied with Ericsson’s FRAND obligations, the first jury verdict of its kind in the United States.

A Chinese Court recently decided that it has the willingness, and jurisdiction, to set a global licensing rate that is fair, reasonable, and non-discriminatory (“FRAND”) for standard essential patents (“SEP”). 

The recent anti-suit injunction issued against InterDigital in its SEP litigation with Xiaomi is a somewhat predictable reaction to the recent UK Supreme Court decision against Huawei and ZTE.  One of the central arguments there was that the UK courts were trying to set themselves up as the international arbiter of FRAND disputes. 

In the latest decision addressing antitrust liability for FRAND commitments, Judge Barbara M. G. Lynn of the Northern District of Texas dismissed a complaint from Continental Automotive Systems, Inc. (“Continental”) alleging, inter alia, violations of §§ 1 and 2 of the Sherman Act, and declaratory judgment as to FRAND obligations against Avanci, LLC (“Avanci”) and various members of its patent pool (collectively, “Defendants”).

Another major development in global standard essential patent litigation was handed down today, as the UK Supreme Court upheld lower court rulings that forced an efficient infringer of essential patents to accept a global license or face an injunction.

In a reversal that came as no surprise to many observers, on Tuesday, August 11, 2020, a unanimous panel of the U.S. Court of Appeals for the Ninth Circuit reversed the decision by the U.S. District Court for the Northern District of California in FTC v. Qualcomm and vacated the district court’s worldwide, permanent injunction prohibiting several of Qualcomm Incorporated’s (“Qualcomm”) licensing practices with respect to standard-essential patents (“SEPs”) covering cellular technology.

Germany’s highest court has clearly and emphatically placed SEP implementers on notice that hold-out will not be tolerated, and that implementers must proactively share the burden and obligation to timely achieve a FRAND license.  An infringer’s conduct during FRAND negotiations is decisively important, and an infringer’s failure to undertake its burden and satisfy its obligations will preclude it from claiming that the patentee acted anti-competitively, or abused a dominant market position. 

After its recent ruling in Sisvel’s favor, Germany’s highest court on patent matters is expected to issue a highly favorable and detailed decision for standard-essential patent (SEP) owners seeking to prevent patent “hold-out” by unwilling licensees. 

When licensing discussions with an intransigent implementer break down, SEP owners face a difficult question: what remedies are available (injunctive relief or damages) in each U.S. court (International Trade Commission and U.S. district courts) as redress against infringement?

The adoption of multiple, standardized technologies looms on the horizon.  This presents the challenge of balancing innovator’s intellectual property rights with implementer’s desire for fair access to technology. As more implementers adopt efficient infringement to circumvent this equilibrium altogether, standard-essential patent (“SEP”) licensing disputes have increased. 

Litigation involving standard-essential patents (“SEPs”) is on the rise.  The now longstanding and disturbing impact of efficient infringement by recalcitrant implementers is the predominant cause of the increase. 

Calculating royalty rates as part of a patent dispute often becomes a hotly-disputed issue, where opposing economic theories from expert witnesses are pinned against one another.  As a litigant, care must be taken when deciding which economic theory to advance—and what facts to rely on—in support of a particular royalty rate.  Given the varying and unique nature of disputes, a singular economic approach to determining a royalty rate is impractical and, oftentimes, inappropriate. 

A recent decision in the Eastern District of Texas should provide standard-essential patent (“SEP”) owners with more clarity and optimism when negotiating SEP licenses.  Coming on the heels of Judge Koh’s decision in the FTC’s dispute with Qualcomm, Judge Gilstrap found Ericsson to have satisfied its fair, reasonable and non-discriminatory (“FRAND”) obligations when negotiating with HTC due in large part to a finding that it had negotiated in good faith. 

Just when observers thought Qualcomm could celebrate its successful litigation with Apple another decision has come down which could have major implications for Qualcomm’s business going forward.