SOUTHFIELD, Mich. – Brooks Kushman Shareholder John LeRoy was featured in a Law360 January 9, 2020 article, “New Injunction Policy Boosts Power of Standard Essential Patents.”
This article centers around the U.S. Patent and Trademark Office’s decision to withdraw its 2013 policy statement and join the Justice Department’s view that injunctions should be available in cases involving standard essential patents (SEPs).
“[O]wners of essential patents often request licensing terms that far exceed a FRAND rate,” LeRoy explains. “But threatened with an injunction, implementers may have no choice but to pay the excessive rate.” LeRoy explains how the risk is particularly acute at the ITC, which historically does not determine FRAND rates and can issue an exclusion order more quickly than a district court can properly determine such a rate in a parallel case.
The impact is significant. While policy statements don’t dictate the law the ITC will apply in determining whether to issue an exclusion order, the 2013 statement shined light on important factors in that determination in an attempt to level the playing field. Following the formal withdrawal of the 2013 statement, we can expect to see an uptick in ITC litigation where SEP owners will attempt to secure higher-than-FRAND rates under threat of an exclusion order before a district court can determine the true FRAND rate that, in most cases, adopters are willing to pay.
While the ITC cannot award damages, there is no reason why the commissions cannot, in the context of SEPs, apply controlling U.S. damages law to determine the FRAND rate for the at-issue patent(s) and then, only if the adopter refuses to pay that rate, consider entry of an exclusion order. It seems that the determination of the FRAND rate, and the adopter’s refusal to pay that determined rate, should be prerequisites to entry of an exclusion order in the ITC, or an injunction in district court.
LeRoy has been defending the automotive industry against unfair claims of patent infringement and damages for nearly 20 years. He has extensive experience dealing with wireless technology and SEPs in the auto industry specifically for almost a decade now. His clear “in the trenches” perspective of the disconnect between the SEP owners and the adopters. He is Co-Chair of Brooks Kushman’s patent litigation department and holds a Master’s Degree in Electrical Engineering.
The full Law360 article can be found here.
Learn more about the current SEP issues related to FRAND rates in LeRoy’s recent SEP sketch, “You May Be Exhausted Over Standard Essential Patents (And Note Even Know It)” or can read about a specific issue of the SEP exhaustion issue in his recent blog post, “Nokia’s U.S. Standard Essential Patents Are Exhausted Against Qualcomm Chipsets.”