Published: 3/23/16
Publication: MoFo Client Alert
On January 21, 2016, the Japan Fair Trade Commission (“JFTC”) published revisions to its guidelines for the Antimonopoly Act (“AMA”). The new guidelines make it a fair trade practice violation for holders of a standard essential patent (“SEP”) with fair, reasonable, and non-discriminatory (“FRAND”) obligations to refuse to license or bring an injunctive action against a willing licensee of their SEP.
Typically, FRAND obligations arise when a patent owner participates in a standard setting organization (“SSO”) that sets the technical requirements for a particular procedure or technology. The SSO then requires holders of patents that are essential to the standard to license their patents on fair and reasonable terms. This prevents the patent holders from wielding control over essential technology and potentially restricting competition, development, and research related to the standard. The holders of SEPs also stand to benefit from the royalties they gain from cooperating with the SSO, as the organization will exclude technologies from the standard when a patent holder does not agree to FRAND terms. Many countries, including Japan, have turned to antitrust provisions to enforce these FRAND terms.