Comparative Analysis of Court-Determined FRAND Royalty Rates
Litigation over licensing practices involving standard essential patents (SEPs), and particularly the appropriate “fair, reasonable, and non-discriminatory” (FRAND) royalty rates for portfolios of such patents, has taken off in recent years. Since 2013, cases have included: Microsoft v. Motorola (US, 2013), In re Innovatio (US, 2013), Realtek v. LSI (US, 2014), Huawei v. InterDigital (China, 2013), Unwired Planet v. Huawei (UK, 2017), and TCL v. Ericsson (US, 2017). These litigations have taken place in various jurisdictions around the world, which raises the possibility of inconsistency across jurisdictions, either in the FRAND rates themselves or in the methodologies used to determine the rates.
In this article, published in the Summer 2018 issue of Antitrust, Dr. Fei Deng, Dr. Gregory K. Leonard, and Dr. Mario Lopez review and compare the two most recent cellular cases—Unwired Planet and TCL—to determine the extent to which the decisions are consistent with each other. Given the conclusions drawn in their comparative analysis, the authors’ findings suggest that future FRAND rate litigation in the cellular space may focus more on the measurement of relative portfolio strength and less on the level of the aggregate royalty burden, or ARB.
Antitrust, Vol. 32, No. 32, Summer 2018. © 2018 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.