The New Extraterritoriality: FRAND Royalties, Anti-Suit Injunctions and the Global Race To The Bottom In Disputes Over Standards-Essential Patents
40 Pages Posted: 13 Mar 2019 Last revised: 8 Oct 2019
Date Written: February 21, 2019
While national courts have long exercised extraterritorial authority over domestic entities whose conduct abroad is prohibited in the domestic jurisdiction, national courts have recently begun to use disputes over domestic patent rights as vehicles for shaping the global business arrangements of private parties even absent any violation of national law. This phenomenon has become particularly pronounced in the context of “fair, reasonable and non-discriminatory” (FRAND) licenses of patents that are essential to the manufacture and sale of standardized products. This essay explores the increasing extraterritorial effect of national judicial decisions on licenses for standards-essential patents, including recent instances in which courts in the U.S. and UK have sought to establish global FRAND royalty rates for parties engaged in national patent litigation. It also examines the increasing use of the anti-suit injunction, a powerful procedural tool that can enjoin parallel foreign proceedings while disputes are adjudicated in a first jurisdiction. The combination of national courts’ willingness to determine global patent licensing rates, coupled with the rising prevalence of the anti-suit injunction, threatens to cause a new “race to the bottom” among jurisdictions in this commercially significant area of the law.
Keywords: FRAND, standards, SEP, patent, extraterritoriality, anti-suit injunction
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