Injunctions for Standard-Essential Patents: Justice Is Not Blind

Camesasca, Peter D.; Langus, Gregor; Neven, Damien; Treacy, Pat

doi:10.1093/joclec/nht013

Cited by 23 publications

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“…In our benchmark model, we also allow the potential licensee to improve its o er if and once the Court has rejected the rst o er as not being FRAND. We have observed such a sequence of events in one of the recent disputes between two large mobile handset manufacturers in Germany (see Camesasca et al (2012)) for details.…”

mentioning

confidence: 80%

“…paper Camesasca et al (2012)) and have a simple rationale: as the inclusion of a technology in a standard increases its value (a consequence of the network e ect that interoperability triggers) and locks in implementers, patent holders would be in a favorable position to hold them up (see Farrell et al (2007)). …”

Section: Introductionmentioning

confidence: 99%

“…Our framework is inspired by a review of court procedures which is presented in a companion paper Camesasca et al (2012). That paper observes that Courts in the EU (i) give e ect to FRAND commitment, in the sense that if a prospective licensee makes a royalty o er that can be considered to be FRAND, no injunction will be granted and (ii) most often do not directly enforce a FRAND rate but rather determine whether a proposed rate can be considered to be FRAND or not (and hence determine what is not FRAND) and (iii) only grant injunctions if they can be convinced that the prospective licensee is unwilling.…”

Section: Introductionmentioning

confidence: 99%

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Standard-Essential Patents: Who Is Really Holding Up (And When)?

Langus¹,

Lipatov²,

Neven³

2013

Journal of Competition Law and Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. This paper analyzes the effect of injunctions on royalty negotiations for standard essential patents. We develop a model in which courts grant injunctions only when they have sufficient evidence that the prospective licensee is unwilling, in line with the way we understand Courts to operate in Europe. In such a framework the prospective licensee has a powerful strategic tool: the offers that he makes to the patent holder will affect the royalty rate that the Court may adopt as well as the probability of being subject to injunctions (and the liability for litigation costs). We find that despite the availability of injunctions, the holder of a sufficiently weak patent will end up accepting below FRAND rates, in particular when litigation cost are high. We also find that the prospective licensee will sometimes prefer to litigate and the holder of a sufficiently strong patent will always end up in litigation by rejecting offers below FRAND. This arises in particular when the prospective licensee has little to fear from being found unwilling, namely when the trial takes time (so that the threat of injunctions is less powerful),andwhen litigation costs are low. Importantly, we thus find that hold up (royalties above the fair rate) as well as reverse hold up (royalties below the fair rate) may arise in equilibrium. Terms of use: Documents in© The Authors. All rights reserved. No part of this paper may be reproduced without the permission of the authors. Abstract This paper analyzes the e ect of injunctions on royalty negotiations for standard essential patents. We develop a model in which courts grant injunctions only when they have su cient evidence that the prospective licensee is unwilling, in line with the way we understand Courts to operate in Europe. In such a framework the prospective licensee has a powerful strategic tool: the o ers that he makes to the patent holder will a ect the royalty rate that the Court may adopt as well as the probability of being subject to injunctions (and the liability for litigation costs). We nd that despite the availability of injunctions, the holder of a su ciently weak patent will end up accepting below FRAND rates, in particular when litigation cost are high. We also nd that the prospective licensee will sometimes prefer to litigate and the holder of a su ciently strong patent will always end up in litigation by rejecting o ers below FRAND. This arises in particular when the prospective licensee has little to fear from be...

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mentioning

confidence: 80%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Standard-Essential Patents: Who Is Really Holding Up (And When)?

Langus¹,

Lipatov²,

Neven³

2013

Journal of Competition Law and Economics

Self Cite

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“…These commitments limit the set of circumstances in which courts will grant injunctions (for details on these see the companion paper Camesasca et al (2012)) and have a simple rationale: as the inclusion of a technology in a standard increases its value (a consequence of the network eect that interoperability triggers) and locks in implementers, patent holders would be in a favorable position to hold them up (see Farrell et al (2007)). …”

Section: Introductionmentioning

confidence: 99%

“…Our framework is inspired by a review of court procedures which is presented in a companion paper Camesasca et al (2012). That paper observes that Courts in the EU (i) give eect to FRAND commitment, in the sense that if a prospective licensee makes a royalty oer that can be considered to be FRAND, no injunction will be granted and (ii) most often do not directly enforce a FRAND rate but rather determine whether a proposed rate can be considered to be FRAND or not (and hence determine what is not FRAND) and (iii) only grant injunctions if they can be convinced that the prospective licensee is unwilling.…”

Section: Introductionmentioning

confidence: 99%

Standard Essential Patents: Who is Really Holding Up (and When)?

Langus¹,

Lipatov²,

Neven

2013

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. This paper analyzes the effect of injunctions on royalty negotiations for standard essential patents. We develop a model in which courts grant injunctions only when they have sufficient evidence that the prospective licensee is unwilling, in line with the way we understand Courts to operate in Europe. In such a framework the prospective licensee has a powerful strategic tool: the offers that he makes to the patent holder will affect the royalty rate that the Court may adopt as well as the probability of being subject to injunctions (and the liability for litigation costs). We find that despite the availability of injunctions, the holder of a sufficiently weak patent will end up accepting below FRAND rates, in particular when litigation cost are high. We also find that the prospective licensee will sometimes prefer to litigate and the holder of a sufficiently strong patent will always end up in litigation by rejecting offers below FRAND. This arises in particular when the prospective licensee has little to fear from being found unwilling, namely when the trial takes time (so that the threat of injunctions is less powerful),andwhen litigation costs are low. Importantly, we thus find that hold up (royalties above the fair rate) as well as reverse hold up (royalties below the fair rate) may arise in equilibrium. Terms of use: Documents in© The Authors. All rights reserved. No part of this paper may be reproduced without the permission of the authors. AbstractThis paper analyzes the eect of injunctions on royalty negotiations for standard essential patents. We develop a model in which courts grant injunctions only when they have sucient evidence that the prospective licensee is unwilling, in line with the way we understand Courts to operate in Europe. In such a framework the prospective licensee has a powerful strategic tool: the oers that he makes to the patent holder will aect the royalty rate that the Court may adopt as well as the probability of being subject to injunctions (and the liability for litigation costs). We nd that despite the availability of injunctions, the holder of a suciently weak patent will end up accepting below FRAND rates, in particular when litigation cost are high. We also nd that the prospective licensee will sometimes prefer to litigate and the holder of a suciently strong patent will always end up in litigation by rejecting oers below FRAND. This arises in particular when the prospective licensee has little to fear from being fou...

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Patent Remedies and Complex Products

Contreras

Cotter²,

Sang³

et al. 2019

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This chapter addresses a special category of cases in which an asserted patent is, or has been declared to be, essential to the implementation of a collaboratively-developed voluntary consensus standard, and the holder of that patent has agreed to license it to implementers of the standard on terms that are fair, reasonable and non-discriminatory (FRAND). In this chapter, we explore how the existence of such a FRAND commitment may affect a patent holder's entitlement to monetary damages and injunctive relief. In addition to issues of patent law, remedies law and contract law, we consider the effect of competition law on this issue.

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Injunctions for Standard-Essential Patents: Justice Is Not Blind

Cited by 23 publications

References 0 publications

Standard-Essential Patents: Who Is Really Holding Up (And When)?

Standard-Essential Patents: Who Is Really Holding Up (And When)?

Standard Essential Patents: Who is Really Holding Up (and When)?

Patent Remedies and Complex Products

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