Standard-Essential Patents: FRAND Commitments, Injunctions and the Smartphone Wars

Abstract

This article examines a number of cases which have arisen in the EU and which raise the question of whether a holder of a standard-essential patent (SEP) which has given a commitment to license that SEP to any third party on fair, reasonable and non-discriminatory (FRAND) terms, should be able to enforce its patent rights thought the bringing of an injunction in court. In particular, it focuses on questions referred to the Court of Justice by the Regional Court of Düsseldorf in the context of litigation between two Chinese electronics companies operating in the mobile telephony market, Huawei Technologies and ZTE. Crucially, the German court has asked the EU court whether, and if so when, it might constitute an abuse of a dominant position contrary to Article 102 TFEU for a FRAND-encumbered SEP-holder to seek an injunction against a potential licensee alleged to be infringing the patent. This article analyses the questions that have been put to the Court of Justice and considers how it might answer them. It suggests that even though EU precedent does not provide a clear solution to the questions posed, jurisprudence does set out some guiding principles which can be relied upon to construct an answer. It concludes, however, that even if this matter is resolved, other pressing – and difficult – matters remain which require urgent development. As the FRAND obligation leaves vast scope for disagreement between SEP-holders and implementers over a number of fundamental issues, it is critical that mechanisms are put in place which will allow FRAND disputes to be resolved quickly and efficiently to the mutual benefit of SEP-holders and implementers.

Keywords: Article 102, Standard-Essential Patents, Injunctions

JEL Classification: K21, L40, L41