Injunctions for Standard Essential Patents Under FRAND Commitment: A Balanced, Royalty-Oriented Approach

Abstract

This article investigates the controversial topic of using injunctive relief as a remedy for infringement of SEPs under FRAND agreements and seeks to contribute to the debate of under what circumstances a holder of an SEP may seek injunctive relief without breaching the agreement with the standard-setting organization. The article seeks to identify a suitable legal framework and legal doctrine for determining whether such a right exists by comparing a number of EU and U.S. approaches and doctrines. The article concludes that seeking injunction to prevent use of an SEP cannot be seen as abusive on a general level. There are several approaches that appear to be capable of balancing the main interests while taking into account the benefits of standards. In the EU competition law, in particular abuse of a dominant position of Art. 102 TFEU, has proven useful – the Court of Justice of the European Union recently handed down its decision in Case C-170/13 Huawei Technologies Co. v. ZTE Corp regarding the terms under which a patent holder may seek injunction for an SEP under FRAND, elaborating on the concept of a “willing licensee”. European case law suffers from the lack of guidance on how to calculate FRAND royalty rates. U.S. case law appears to be better positioned for dealing with these issues from a royalty perspective – in the Ninth Circuit’s decision in Microsoft v. Motorola, the calculation formed an integral part of the question of the right to seek injunctive relief. In common law systems, equity law (applied to patent law) has the potential of providing a balanced view, focusing on the behavior of the parties and a “willing licensee”; whereas, a contractual approach is theoretically questionable and not optimal for solving the issues related to the right to seek injunctive relief for standard essential patents under FRAND. The article also addresses the issue of balancing the interests of the parties under the proposed approaches.