Announcing FRAND: German Case Law and Global Perspectives

Guest Post by Thomas F. Cotter, Taft, Stettinius & Hollister Professor of Law, University of Minnesota Law School

As readers of this blog are aware, organizations such as the European Telecommunications Standards Institute (ETSI), IEEE, and others promulgate standards that enable products such as smartphones and other complex technological devices to interoperate.  These standard-setting organizations (SSOs) encourage their members to commit to licensing patents that may be essential to the practice of the relevant standards on fair, reasonable, and nondiscriminatory (FRAND) terms.  Because SSOs do not define the meaning of FRAND, however, when the owners of these standard-essential patents (SEPs) and the companies that implement them fail to reach terms, litigation is often the result.  And because patents are territorial rights, FRAND litigation often spans the globe—though because of its importance to the European market, Germany has been home to many of the most important FRAND cases over the past decade.  The German FRAND case law, in turn, is based in part on the German courts’ interpretation of European Union competition (antitrust) law, and differs in important respects from the approaches taken in FRAND cases in other leading jurisdictions, including the United Kingdom, the United States, and China.

In this context, I am pleased to announce the publication this month of FRAND: German Case Law and Global Perspectives (Peter Georg Picht, Thomas F. Cotter & Erik Habich eds., Edward Elgar Publishing), part of Elgar’s Intellectual Property Law and Practice series.  Our book consists of two parts.  The first is a distillation of the relevant German case law, translated into English and arranged thematically into individual chapters addressing willingness to license; the FRAND offer; reaction duties and the FRAND counteroffer; confidentiality; FRAND licensing and SEP transfer; damages claims; and anti-antisuit injunctions.  The second consists of essays contributed by coeditors Peter Georg Picht, Erik Habich, and me, plus leading judges, practitioners, and academics from Germany, the United Kingdom, the United States, and China.  My own essay, for example, titled U.S. and German FRAND Disputes:  Like Ships That Pass in the Night, highlights what I view as the salient differences between the U.S. and German approaches to FRAND.  These include not only the many procedural differences between U.S. and German litigation generally (regarding matters such as jury trials, discovery, and the use of expert witnesses), but also matters relating specifically to patent litigation.  Probably the two most important of these are the relevance of antitrust law to FRAND disputes in Germany (compared to its comparative irrelevance in the U.S., under current case law), and the German courts’ frequent granting of injunctive relief in FRAND cases.  Perhaps the most fundamental difference between the U.S. and German approaches, however, is that the German courts see their role as facilitating an ultimate agreement between the parties, and thus have yet to establish the terms of FRAND licenses themselves— whereas U.S. courts have determined FRAND royalties in several decisions now, and in recent years courts in the U.K. and China have adopted the practice of adjudicating the terms of global FRAND licenses in some cases.

As we state in the book’s foreword, in today’s connected, global marketplace, patent professionals cannot rely exclusively on their knowledge, however expert, of domestic or regional law.  Rather, professionals today must think strategically about when and where in the world their clients should litigate, if given a choice—as well as how best to respond if it is their opponents who have seized the initiative.  It is for this reason that we hope our book will prove useful to patent lawyers, judges, academics, government policymakers, and law students, not only in Europe, but (perhaps even more so) in the United States and elsewhere.  And so, we invite you to take a look—and, as always, to share your thoughts with us on how FRAND litigation will, or should, develop in the years to come.