Monday, February 9, 2015

Impact of IEEE SEP Policy Change

There's been some discussion today of the IEEE's new policy for standard essential patents (SEPs), under which a FRAND commitment made to the IEEE will now signify "that reasonable terms and conditions, including without compensation or under Reasonable Rates, are sufficient compensation for a license to use those Essential Patent Claims and precludes seeking, or seeking to enforce, a Prohibitive Order except as provided in this policy."  My initial thought is that the language about prohibitive orders (injunctions and exclusion orders) isn't likely to change much in the U.S., where courts more likely than not will deny injunctions for the infringement of SEPs anyway under the eBay standard.  As for other countries, my recollection is that European commentators have expressed doubts whether FRAND commitments are enforceable contracts (under German law, at any rate), and most countries still grant injunctions more or less as a matter of course unless the patent owner's request for an injunction constitutes either a violation of competition law (at issue now before the CJEU in the Huawei case) or an abuse of right (as found by the Japanese IP High Court in Samsung v. Apple, see blog post here).  If the CJEU adopts AG Wathelet's competition law analysis in Huawei (see blog post here), however, maybe the IEEE's new policy won't change matters much in Europe either, though it seems to me that there still might be room for discussion whether the other requirements for showing abuse of dominant position will necessarily always be satisfied if the patent is standard-essential.  And of course if you figure you can't get an injunction in the U.S. you may wind up agreeing to a global royalty which moots the issue of trying to get an injunction anywhere else.  Nevertheless, I wonder whether the policy change leaves open the possibility that an SEP owner could seek an injunction in violation of the policy and wind up obtaining the injunction anyway, if the requirements for showing a competition law violation are not all present--or would seeking the injunction necessarily amount to an abuse of right?  I hope that someone better versed than I in the civil law's abuse of right doctrine will take this matter up in the coming weeks . .  .

For my previous posts on the new IEEE policy, see herehere, here, here, and hereSee also coverage today in the Wall Street Journal and (behind a paywall) Bloomberg BNA Patent, Trademark & Copyright Daily

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