Study On Legal Issues Of The F/RAND Commitment Of Standards Essential Patents

Increasing numbers of enterprises nowadays tend to register the patent for technologies to monopolize the industrial sectors.In the era of third generation wireless communication("3G"),Qualcomm Incorporated("Qualcomm")built a patent wall centering on CDMA(1)technology,which monopolized 90 percent of the patentable chip market share in the 3G era.(2)On the other hand,setting up standards have brought several market advantages for the enterprises.For example,it helps with solve product compatibility,improving productivities and efficiency,reducing costs for production and management,and encouraging technological development and innovation.It was because the Third Generation Partnership Project("3GPP")put the CDMA technology into the three major standards of the 3G era that the wireless communication industry had been further improved.But Qualcomm also have dominated the market share by the CDMA technology.Therefore,patent standardization has become one of the core competitive strategies of contemporary technology enterprises.As a result,combination of patent and standard produce the so-called standards essential patents("SEPs").To resolve the conflict between private rights and public domain in standardizations demanding by SEPs,the standards development organizations("SDOs")have formulated their intellectual property rights policies.The common core for these policies include reasonable and non-discriminatory commitment("RAND Commitment"(1))or Fair,Reasonable and Non-discriminatory commitment("FRAND Commitment"(2))For clarity,except for discussing the division between these two terms,I refer both collectively as "F/RAND Commitment"(3).However,the ambiguity and uncertainty of the F/RAND Commitment not only magnifies the existing concerns of patent hold-up and royalty stacking in SEPs,but also causes new legal problems such as patent reverse hold-up,application of injunction,and calculation and determination of the royalty accord with the F/RAND Commitment.This paper seeks to purpose solutions and suggestions for resolving legal issues mentioned above.In the first chapter,this article examines the historical evolution of the F/RAND Commitment made by SDOs,using the negative impact of the combination of standards and patents as examples.Second,we highlight that the F/RAND Commitment is vague and uncertain by reviewing the SDOs on paper and SDOs in practice.Third,according to the goals and values of F/RAND Commitment,the first chapter emphasizes what the connotation of F/RAND Commitment should entail.Chapter Two conceptualizes the legal nature of the F/RAND Commitment for resolving the legal issues it involved with.Specifically,through comparing the different perspective around the globe,this paper purposes what the legal nature of F/RAND Commitment should be.Meanwhile,Chapter Two further elucidates the legal effect what the F/RAND Commitment should have.Chapter three devote to patent reverse hold-up,the first negative phenomenon caused by F/RAND Commitment.Patent reverse hold-up means that standard implementers use the domestic rules of specific countries to prohibit or restrict the SEPs holder to apply for injunctions,to allow their late payment,underpayment,or non-payment of patent royalties.Importantly,since having the right to set up standards is usually a multinational group,which usually has multiple related entities at the same time,all related entities in different countries or regions basically enjoy full rights on the same SEPs.Therefore,for clarity,the right entities of SEPs are collectively referred to as "SEPs holders" in this article.At the same time,this article proposes a new suggestion to remedy patent reverse hold-up and prevent patent hold-up,by analyzing the injunctive relief rules of SEPs by analyzing the practice in various countries.Chapter Four elaborates the patent royalty stacking,the second negative phenomenon.The patent royalty stacking means that the implementers should pay cumulative payments to a lot of SEPs holders due to excessive SEPs appearing in the final product.This chapter explains the harms caused by such phenomenon and the difficulties on the determination of a F/ RAND royalty.In order to solve the problem of patent royalty stacking,this chapter proposes that we should constructively remodel the ways of calculating and determining the judging patent royalties,by focusing on the F/RAND Commitment and taking the goals and values of the F/RAND Commitment seriously.The final chapter offers concrete suggestions for China.With the rise of Chinese communication companies headed by Huawei in the era of fifth generation wireless communication("5G"),communication enterprises,antimonopoly enforcement agencies,and the People?s courts in China will face increasing challenges related to SEPs.By reviewing existing views based on judicial practice,the investigation of effective local rules,and my theoretical analysis in Chapters 1 to 4,including the F/RAND Commitment,the legal nature,the regulations of the injunction of patent hold-up,the assumption of calculation and judgment of patent royalties,this article proposes some advices for the commercial negotiations between Chinese enterprises about SEPs.At the same time,this article suggests that the People’s court in China may stipulate rules on injunctive relief application,establishing trial anti-injunction system.The court should also,in my view,seriously consider what the factors should be concerned on the calculation and determination of patent royalties.Finally,this chapter also proposes several suggestions on the intervention mechanism of China’s anti-monopoly enforcement agencies.