FRAND in India

Abstract

Investigations and litigation involving standard-essential patents (SEPs) have been brought around the world. In the last several years, India has drawn attention to itself by raising several novel and controversial concerns regarding SEPs. For example, in 2013 and 2014, the Competition Commission of India (CCI) issued investigation orders against Ericsson, alleging that the company violated its commitments to license on fair, reasonable, and nondiscriminatory (FRAND) terms by imposing discriminatory and “excessive” royalty rates and using Non-Disclosure Agreements (NDAs). In its investigation order, the CCI stated that “forcing” a party to execute [an] NDA” and “imposing excessive and unfair royalty rates” constitutes “prima facie” abuse of dominance and violation of section 4 of the Indian Competition Act, as does “[i]mposing a jurisdiction clause debarring [licensees] from getting disputes adjudicated in the country where both parties were in business.” Most recently, India’s Department of Industrial Policy and Promotion issued a Discussion Paper on SEPs, which among other things, emphasizes concerns about holdup by patent holders, while omitting any concerns about holdup and holdout by implementers. This chapter analyzes that Discussion Paper, providing guidance based on the approach taken by the United States and Europe, and offers several policy recommendations, including on the availability of injunctive relief; the issuance of a one-size-fits all template for standard-development organizations (SDOs); the imposition of royalty caps or competition sanctions for “excessive pricing,” the use of NDAs and the “ND” prong of FRAND; balancing desires for transparency with needs for confidentiality in licensing; and the use of international arbitration on a portfolio basis as likely the most efficient and realistic means of resolving FRAND disputes.