WIPR Annual 2018
www.worldipreview.com LESI: FRAND
has the downside that it does not value the individual
quality of the portfolio patents.
The parties themselves used very different approaches.
TCL’s “top-down approach” assesses the value of an
SEP portfolio by determining a “fair and reasonable”
maximum royalty rate for all SEPs. The applicable
percentage royalty rate for the respective SEP licensor
shall be derived from the relative value of the single
portfolio compared to the overall value of all SEPs.
Ericsson applied an “ex ante approach” intended
to appreciate the added value of the standardised
technology compared to the closest non-infringing
alternative and the licensor’s contribution to this
Ericsson has appealed Selna’s decision. The
decision in the appeal proceedings will be essential for
the further development of US case law on FRAND.
The UK approach
The UK decision in Unwired Planet followed a rather
similar approach. Justice Colin Birss considered
FRAND to be a single rate rather than a corridor and
tried to develop his own FRAND terms independent
from the parties’ negotiation results.
In order to identify the single FRAND rate,
Birss needed to overcome what he calls the Vringo
problem, ie, that two offers are considered FRAND by
the court, leading to a stalemate situation. To avoid
this scenario, Birss adopted the single rate approach.
Birss uses “patent counting” as a cross-check to
determine the relative strength of a patent portfolio.
To do this, he estimates the overall SEP number and
the percentage of SEPs owned by the plaintiff.
He considered other calculation methods to be
As in the US decision this leads to a somewhat
theoretical licence rate as the strength of a portfolio is
represented not only by the number of SEPs. Further,
Birss states that the figures presented by the parties
are wrong and simply chooses a value in the middle
of these values.
The view of the European Commission
In the recently published communication from the
European Commission on the “EU approach to
Standard-Essential Patents”, the Commission states
that FRAND is not a one-size-fits-all and solutions
can differ from sector to sector depending on the
business models in question.
However, the Commission does not take a stand in
differ in the
to FRAND in
to the current
case law from
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