“The decision of the decade” – US reaction to the UK’s landmark Unwired Planet FRAND judgment

Richard Lloyd, writing for IAM, citing former Unwired Planet CEO Boris Teksler

The key take away from Justice Birss’ opinion is his recognition that SEP FRAND issues can and should be resolved on a global basis, and not through piecemeal litigation on a country-by-country basis. Justice Birss took the bilateral FRAND obligations principle of the ECJ decision in Huawei v ZTE and applied that principle to an entire worldwide SEP portfolio. His approach, if adopted, will finally provide a much more efficient mechanism to resolve and hopefully avoid disputes about the appropriate value for a worldwide portfolio licence on FRAND terms.

Sounds judicial overreach to me. Also, how do overlapping and contradictory decisions among different courts be efficient?

Samsung alleged to work with NPE in Polaris-Kingston case

Heck Ellis summarized the filing of Kingston in the Polaris' patent infringement suit, in which an interesting strategy utilized by Samsung was revealed.

In May 2015, Samsung and Polaris entered into an agreement under which the Korean company agreed to pay the WiLAN subsidiary 50% of the future purchase price of the Qimonda portfolio, up to €16 million ($17 million), should Polaris acquire the rights. (The following month, WiLAN announced it had purchased the Qimonda portfolio from then-owner Infineon for $33 million. Infineon had itself acquired the patents a few months earlier as part of a settlement agreement with Qimonda's insolvency administrator.).

In return for a licence to the Qimonda portfolio, Samsung agreed to “not challenge the ownership, validity, enforceability, novelty, obviousness, or utility of the Qimonda… patents, to not assist anyone adverse in interest to a Qimonda… patent, and to not dispute infringement of any Qimonda… patent”.
“Particularly pertinent to Kingston’s counterclaims,” under the terms of Samsung’s agreement with Polaris, the Korean company was given the right to specify 15 Qimonda patents and “discuss in good faith with Polaris either giving Samsung an exclusive licence to them or having Polaris file patent infringement lawsuits against specified, agreed-upon third parties”.

Polaris agreed to pay Samsung a royalty equal to five percent of Polaris’s gross revenues from licensing the Qimonda portfolio. Polaris owes Samsung royalties up to the amount Samsung paid to Polaris to assist its purchase of the patents from Infineon.

If substantiated, Samsung in essence control these patents through an NPE. It's deal with Polaris perhaps is more like a funding mechanism in exchange for such control.

Unwired Planet v Huawei

Fresh off the press is today's decision from Mr Justice Birss in Unwired Planet v Huawei [2017] EWHC 711.

There are some interesting FRAND findings. I am curious about the reasoning about why the insistence on a worldwide listener is FRAND.

(6) FRAND characterises the terms of a licence but also refers to the process by which a licence is negotiated. Although an implementer does not owe a FRAND obligation to ETSI, an implementer who wishes to take advantage of the patentee’s FRAND obligation, must themselves negotiate in a FRAND manner.

(7) Offers in negotiation which involves rates higher or lower than the FRAND rate but do not disrupt or prejudice the negotiation are legitimate.

(8) An appropriate way to determine a FRAND royalty is to determine a benchmark rate which is governed by the value of the patentee’s portfolio. That will be fair, reasonable and generally non-discriminatory. The rate does not vary depending on the size of the licensee. It will eliminate hold-up and hold-out. Small new entrants are entitled to pay a royalty based on the same benchmark as established large entities.

(9) The non-discrimination limb of FRAND does not consist of a further “hard edged” component which would justify a licensee demanding a lower rate than the benchmark rate because that lower rate had in fact been given to a different but similarly situated licensee. If FRAND does include such a component, then that obligation would only apply if the difference would distort competition between the two licensees.

– by Annsley Merelle Ward in BREAKING: Birss J hands down first FRAND decision in Unwired Planet v Huawei