Published: 1/1/12
In this decision, the court affirmed a lower court’s holding that enjoined a holder of FRAND-encumbered SEPs from seeking to enjoin a potential licensee. The court addressed a FRAND commitment made to the International Telecommunications Union, under which the SEP holder undertook to “grant a license to an unrestricted number of applicants on a worldwide, non-discriminatory basis and on reasonable terms and conditions to use the patented material necessary in order to manufacture, use, and/or sell implementations of the” relevant standard. The Court held that “[t]his language admits of no limitations as to who or how many applicants could receive a license (‘unrestricted number of applicants’) or as to which country’s patents would be included (‘worldwide,’ ‘the patented material necessary’).” The court further stated that “[i]mplicit in such a sweeping promise is, at least arguably, a guarantee that the patent-holder will not take steps to keep would-be users from using the patented material, such as seeking an injunction, but will instead proffer licenses consistent with the commitment made.”
Although the court’s opinion addressed the specific language of the ITU’s FRAND commitments, it is notable that virtually identical language is used in FRAND commitments made to the IEEE-SA, a leading standards body in the computing and networking industries. The IEEE-SA Standards Board’s bylaws require participants in the organization’s standards development that do not waive their patent rights to agree to grant a license “for a compliant implementation of the standard … to an unrestricted number of applicants on a worldwide basis without compensation or under reasonable rates, with reasonable terms and conditions that are demonstrably free of any unfair discrimination.” See IEEE-SA Standards Board Bylaws, ¶ 6.2, available at http://standards.ieee.org/develop/policies/bylaws/sb_bylaws.pdf.