Telefonaktiebolaget LM Ericsson

* This piece was first published in the December 2017 issue of the Practical Lawyer (2017) PL (Comp. L) Dec 76

This century is continually being marked by the convergence of this goliath world into a global village. While this phenomenon is attributable to a number of factors, inter-operability of technology and adoption of common standards have acted as important catalysts in this process. As such, this convergence perforce requires that common standards are available on fair terms to all. However, a number of components of these essential standards are patented, i.e., are standard essential patents (SEPs), thereby implying the exclusive right of the patentee to use and exploit the SEP. It is at this juncture that a complex yet interesting legal wrestle between the competition law and intellectual property rights (IPR) regimes emerges.

In essence, SEPs encompass those patented technologies which have become essential to a standard. From an antitrust perspective, an SEP holder enjoys substantial, almost monopolizing market power due to lack of substitute alternative technologies. The SEP holder is susceptible to engaging in abusive practices, such as refusal to license the SEP to other manufacturers, or charging exorbitant royalties. In order to balance this one-sided bargaining power, standard setting organizations (SSOs) across all jurisdictions obligate SEP holders to license the their intellectual property on fair reasonable and non-discriminatory (FRAND) terms. However, the multi-jurisdictional decisional practice elucidates that mere affirmation by SEP holders to SSOs does not preclude them from engaging in abusive practices, thereby necessitating an interaction between competition laws and IPR.

Continue Reading Standard Essential Patents – The Irony of Standardization