A step closer to consensus on the availability of injunctive relief for an SEP?

13.12.2013

The ever controversial issue of the availability of injunctive relief for FRAND-encumbered SEPs took centre stage at the latest meeting of the ETSI IPR Special Committee (10-12 December 2013).
A number of network operators (‘NOs’) put forward a joint proposal on the circumstances in which injunctions can be sought/enforced. This is reported to have gained some traction in the discussions – in part as the NOs are seen to be relatively neutral in what has been a polarised debate. Some optimistic commentators have suggested that a consensus might be imminent. The ‘safe harbour’ proposal put forward by the NOs suggests amending the ETSI IPR Policy to provide that owners of FRAND-encumbered SEPs may seek and enforce injunctions only if the potential licensee does not agree to participate in / be bound by an adjudication process (court or arbitration). The proposal is silent as to the detail of how the adjudication process should be conducted and states that this is to be left to the discretion of the court/arbitrator.
An ETSI press release issued shortly after the meeting (here) states that ETSI members have “agreed to continue to explore these new contributions in a collaborative manner…. ahead of the next meeting planned on 18 to 20 February 2014”.
The proposal is likely to be welcomed by the Commission which has endorsed third party FRAND adjudication as an alternative to lengthy and costly patent litigation. The Commission has indicated that it considers that licensees that agree to third party adjudication are ‘willing licensees’ and so should not be subject to requests for injunctions (see for example a speech by Alexander Italianer Director General of DG COMP from 2013 here).
In addition, WIPO (after consultation with ETSI) has recently released tailored model arbitration and mediation submission agreements for FRAND disputes (more details can be found here).
Notwithstanding general support for the efforts of the NOs, it remains to be seen whether the NOs proposal is too ‘bare boned’ for ETSI members that want some legal certainty if they are to give up their right to seek an injunction (and also for those implementors who may feel constrained to engage in a third party adjudication process, with no real feel for likely scope, approach and process). For example, one of the most controversial (and important) issues is the extent to which the adjudication process should be conducted on a ‘per patent’ or ‘portfolio’ basis (the former is advocated by licensees and the latter by licensors unsurprisingly). Licensees argue that they do not want to be bound to pay royalties for patents that have not been upheld as valid and infringed whereas licensors argue that the adjudication process should mirror real life FRAND negotiations which are carried out on a portfolio basis and that a portfolio approach is the only way in which FRAND disputes can be resolved once and for all. The current proposal leaves this divisive issue to the discretion of the court/arbitrator – however this latitude may not be welcome to all. In this area, perhaps even more than in other areas of competition law controversy, the devil is inevitably going to be ‘in the detail’. Personally, I think there may be still some way to go before industry consensus will be reached (if ever) even though this appears to be a step in that direction.

Helen Hopson

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