Negotiating FRAND Licences – A Global Solution to a Global Challenge following Huawei/ZTE

Abstract

The legal and economic framework of intellectual property rights in general, and standard essential patents in particular, are a complex conundrum of interests, rights and obligations. Some of these are complementary, while others stand in stark contrast with each other. Hence, there has been much controversy on different aspects of licensing standard essential patents. In the EU the decision adopted by the European Court of Justice in Huawei v ZTE in 2015 marked a milestone in the debate. Even three years after its adoption, discussions on how to interpret this seminal judgment are ongoing. This paper investigates the implications the Huawei v ZTE had on the enforcement environment of standard essential patents, and in doing so primarily examines the judgment’s influence in the context of the EU. However, enforcers across the globe have also taken note of the developments in the EU and some are in the process of reviewing and in places revising their existing policies around licensing of standard essential patents. For this reason, the paper briefly reviews impacts in the USA, Japan and China. The paper concludes that the rights and obligations of patent holders and implementers are not entirely clear. While much has been done in recent years to remedy this situation, the shortcomings demonstrate that more still needs to be done. This is also evidenced by the fact that regulators in major economies are reviewing and in places revising existing policies. As commendable as these initiatives are, what is required is a global approach that recognises the worldwide scope and significance of the topic. While competition policies will continue to be shaped at national level, global advocacy and the ongoing dialogue between policymakers at least in Europe, the U.S., Japan, China could counteract the potentially distortive effects of domestic policies by exploring common ground and identifying best practices that safeguard the interests of society as a whole. The paper therefore recommends a globally developed guidance focusing on key aspects that are common to any FRAND licensing dispute, emphasising procedural guidance over substantive guidance.