FRAND Determination in TCL v. Ericsson and Unwired Planet v. Huawei: Same Same But Different?

Abstract

Unwired Planet/Huawei (UK) and TCL/Ericsson (US) are remarkable rulings on the FRAND-licensing of SEPs, not least because they tackle the task of a full-blown FRAND-royalty determination. Equally remarkable is a comparison between them since the two courts looked – it seems – at a similar set of facts but reached quite different results. The present paper focusses on a key reason for these differing outcomes, namely the courts’ treatment of “top-down” and “Comparables”, two core approaches in FRAND royalty calculation. It argues, i.a., that it creates more problems than solutions to treat the public announcement of royalty rates as a “pledge”; that FRAND commitments made under EU (Member State) law and regarding EU patents ought to be interpreted with a view to EU law; that the two courts interpret the “ND”-requirement differently; and that the weighing and adjusting of Comparables may be distortive. As to the relative importance of the calculation approaches, Comparables seem more relevant regarding the facts at issue.

Keywords: FRAND, SEP, TCL, Unwired Planet, Huawei, Ericsson, ZTE; top-down, comparables, pledge, Selna, Birss, ETSI, non-discrimination, hard-edged