The FRAND licensing commitment : when can an injunction on the basis of a SEP constitute an abuse for the purposes of Article 102 TFEU?

Abstract

In the ICT sector, standards play a key role in ensuring interoperability. Many standards refer to patented technologies. When the holder of a patent essential to the functioning of a standard undertakes to license the SEP on Fair, Reasonable And Non-Discriminatory terms, the technology covered should be available to any implementer. The purpose of this study is to assess when a SEP holder who has taken on the FRAND commitment can pursue injunctive relief against an alleged infringer without breaching Article 102 TFEU. It deals with an instance of conflict between intellectual property law and competition law, i.e. when enforcing a SEP may constitute an abuse of dominance. The study considers whether SEP ownership confers dominance and the legal test for established forms of abuse, namely refusal to license and vexatious litigation. The author discusses the issue primarily in terms of Huawei v ZTE, the first ruling of the CJEU. The study traces the differences between the approach taken under German law in Orange Book and the position advanced by the European Commission in its decisions addressed to Motorola and Samsung. It evaluates the conduct requirements set out in Huawei v ZTEinsofar as this sought to strike a balance between the interests of the SEP holder and the implementer. FRAND is here seen not just as a set of license terms but also as a ‘process’. Although clearly significant, Huawei v ZTEdid not manage to completely resolve the controversy surrounding the matter but left us hanging on a number of fundamental points. Finally, the study also considers the application of the CJEU’s judgement in the UK case of Unwired Planet v Huawei including the interpretation of FRAND as a contract.