Complications With Global SEP Enforcement

Complications with Global SEP Enforcement:
Adjudicated FRAND Royalty and Extraterritorial

Approach to Parallel Patent Litigations in
“Telecom Combat” Context
by Zhen Liu
Berlin, January 31, 2023

Email: morisawa256@gmail.com
Electronic copy available at: https://ssrn.com/abstract=4351940

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List of Abbreviations
Abbreviation Definition
ADR Alternative Dispute Resolution
ASI Anti-Suit Injunction
AASI Anti-ASI
AAASI Anti-AASI
AAAASI Anti-AAASI
CJEU Court of Justice of the European Union
ECHR European Convention on Human Rights
EMVR Entire Market Value Rule
ETSI European Telecommunications Standards Institute
EU European Union
FRAND Fair, Reasonable, and Non-discriminatory
G-P Georgia-Pacific
IEEE Institute of Electrical and Electronics Engineers
IP Intellectual Property
IPR Intellectual Property Right
IPRP International Preliminary Report on Patentability
ITU International Telecommunication Union
LOA Letter of Assurance
LTE-A Long Term Evolution-Advanced
NPE Non-Practicing Entity
NR New Radio
PCT Patent Cooperation Treaty
RC Regional Court
TFEU Treaty on the Functioning of the European Union
TRIPS The Agreement on Trade-Related Aspects of Intellectual Property Rights
SEP Standard-Essential Patent
SSO Standard Setting Organization
SSPPU Smallest Salable Patent-Practicing Unit
UE User Equipment
UMTS Universal Mobile Telecommunications System
UPC Unified Patent Court
U.S.C. United States Code
Wi-Fi Wireless Fidelity
WIPO World Intellectual Property Organization
WTO World Trade Organization
3G 3rd Generation
3GPP 3rd Generation Partnership Project

4G 4th Generation
5G 5th Generation
II

Table of Contents
A. Introduction ....................................................................................................................................... 1
B. Disputes over the global enforcement of SEP ................................................................................... 2
I. SEP proprietary in augmented monopolistic nature ....................................................................... 3
1. Essentiality of SEP ..................................................................................................................... 3
2. SEP holdup hypothesis ............................................................................................................... 4
3. Royalty stacking hypothesis ....................................................................................................... 5
II. Disputes over the enforcement mechanism of FRAND commitment ........................................... 6
1. The contractual essence of FRAND commitment ...................................................................... 6
2. Antitrust implications from FRAND commitment ..................................................................... 8
3. Patent holdout: Exception to FRAND defense ........................................................................... 9
C. Judicial harmonization on FRAND royalty .................................................................................... 10
I. Complications with judicial approaches to FRAND royalty ........................................................ 11
1. Hypothetical negotiation & Georgia-Pacific framework ......................................................... 11
a. Overview .................................................................................................................. 11
b. Applicability of hypothetical negotiation to SEP infringement ............................... 12
c. Applicability of the Georgia-Pacific factors to SEP royalty disputes...................... 14
2. Comparable license methodology ............................................................................................ 17
a. Adoption by courts worldwide ................................................................................. 17
b. Merits of using comparable licenses ........................................................................ 18
c. Drawbacks of using comparable licenses ................................................................ 20
3. “Bottom-up” & “Top-down” methodologies ........................................................................... 21
a. Overview .................................................................................................................. 21
b. Drawbacks................................................................................................................ 22
4. Transnational Intervention: Adjudication of global FRAND royalty ...................................... 24
II. Reflections & Proposals: Settlements on FRAND disputes ........................................................ 27
1. Reflections: Court of Justice as the instrument for FRAND royalty settlement ...................... 28
2. Proposal: “Informed contract” framework ............................................................................... 30

D. Anti-suit injunction: extraterritorial approach to SEP parallel litigations ...................................... 33
I. ASI in international parallel FRAND litigations .......................................................................... 33
1. The United States...................................................................................................................... 34
a. Procedural requirements for issuance of ASI ........................................................... 34
b. ASI in the US FRAND litigations............................................................................ 35
2. Europe ....................................................................................................................................... 36
3. China......................................................................................................................................... 37
II. Complications with ASI: Why courts should refrain from availing extraterritoriality?.............. 39
1. EU’s complaint at WTO of Chinese ASIs against TRIPS Agreement ..................................... 40
2. Incompatibility of ASI with Art. 6(1) ECHR ........................................................................... 41
III. Proposed countermeasures for the extraterritoriality disarray ................................................... 42
E. Conclusion ....................................................................................................................................... 44
II

A. Introduction
Standard Essential Patents (SEPs) proliferate as an integral part of global telecom protocols, such
as 3GPP 4G LTE-A or 5G NR, extensively implemented by the manufacturers of User Equipment (UE),
like smartphone, laptop, tablet computer, etc., due to the interoperability benefits of standard-compliant
UEs appealing to the consumers.1 By virtue of its “global essentiality”, SEP confers an augmented
monopoly upon the patentee in the telecom market, arousing anticompetition concerns.2
To supervise the SEP monopoly and the well-functioning of telecom marketplace, Standard Setting
Organizations (SSOs) like IEEE, ETSI, etc., enact IP policy—the mandate of Fair, Reasonable and
Non-discriminatory (FRAND) commitment by SEP holders, along with requiring disclosure of all the
associated patents.3 However, complications alarmingly arise with globally enforced telecom-relevant
SEPs. Rather than bilateral licensing negotiation, the vague interpretation of FRAND commitment
inevitably triggered the implementers and SEP proprietors’ fallback to litigations.
On the one hand, FRAND royalty determination is historically a major crux in almost every in-
court settlement, as court has limited ability to valuate an SEP technology.4 A diversity of the existing,
debatable approaches to FRAND royalty calculation, e.g., Georgia-Pacific framework, top-down,
bottom-up, comparable license methodologies trigger the controversy as to whether court is an
adequate regulator of FRAND rate in the telecom market.
In Unwired Planet v. Huawei, the UK court even adjudicated a globally binding FRAND royalty
rate, extending its jurisdiction beyond the subjects complained of. 5 The global harmonization of
FRAND royalty worsens the complications, as it not only encroached foreign authorities’ judicial
power but also disrespect the oversea economy, market rules and conditions, particularly if the global
royalty is not precisely FRAND owing to the flawed calculation methods.
On the other hand, the Unwired Planet judgement triggered a secondary complication, i.e., another
1
Tim Pohlmann, Managing Intell Prop. 2021, 38(39)
2
Mark A. Lemley, Cali L Rev. 2002, 1889(1947)
3
IEEE, Letter of Assurance for Essential Patent Claims; ETSI, IPR Licensing Declaration forms
4
J. Gregory Sidak, Criterion J on Innovation. 2019, 501(504)
5
Unwired Planet v. Huawei (2017) EWHC 711 (Pat) ¶23

transcontinental hassle by anti-suit injunction (ASI) in international parallel SEP litigations. The
national courts in the US and China indulge in granting ASIs to prohibit the litigants from filing
lawsuits in another country. In TCL v. Ericsson, the US court granted an ASI to obstruct Ericsson from
maintaining patent infringement actions in other jurisdictions.6 Confronted with the ASIs, German
courts have issued AASIs in five cases until January, 2022, to safeguard against external authoritarian
offense.7
Those transnational approaches prima facie interfere with the authorities enforcing their own
domestic IP laws. They disregard the specific circumstances of parallel SEP actions and the
compatibility with the legal frameworks of different jurisdictions. Consequently, the global telecom
combat incurs complications that go outrageously beyond the boundary of FRAND commitment.
Overall, in this paper, multi-jurisdictional analysis is conducted, encompassing the European, the
US, Chinese approaches and rulings in major or landmark SEP proceedings. Chapter B exposes the
current common issues worldwide brought about by global enforcement of SEP and FRAND
commitment. Chapter C principally evaluates the inherent flaws, and complications thereby, of the
existing judicial methodologies for FRAND royalty determination, and advocates a preferred solution.
Chapter D analyzes the recent ASI-related parallel litigations and the legitimacy of ASI against TRIPS
Agreement and Art. 6(1) ECHR. Meanwhile, a viable strategy is proposed to eliminate the hazard from
extraterritoriality disorder. Lastly, I outline the conclusions for the subject analysis.
B. Disputes over the global enforcement of SEP
The first section of this chapter depicts the most typical issues on the augmented SEP monopoly
per se, ranging from the over-declaration, patent holdup to royalty stacking theories. The second
section focuses on in-court practices for settling FRAND disputes based on, e.g., the contractual
obligation in FRAND commitment, and antitrust implications in conjunction with case laws like
Huawei v. ZTE. The discussion aims to set up a foundation for later assessment of the judicial
approaches to global FRAND litigations, and clearly illustrate how the telecom combat has been going
6
TCL v. Ericsson, No. SACV 14-341 JVS(DFMx) (C.D. Cal. 2018)
7
Felix K. Hess, J World Intell Prop. 2022, 536(544)

from the outset of FRAND enforcement, finally towards international disharmony.
I. SEP proprietary in augmented monopolistic nature
As noted, the global essentiality, if not challenged, will confer an augmented monopoly such that
the patentee’s exercise of the exclusive SEP right could engage in patent holdup and royalty stacking,
which render implementers at stake. Those issues were repeatedly highlighted by tribunals in FRAND
royalty determination for a pile of SEP cases, like Microsoft v. Motorola,8 and Innovatio.9 Thus, the
insight about the monopolistic nature of SEP is a prerequisite for figuring out the court’s adjudications
in FRAND disputes.
1. Essentiality of SEP
SEP is elected through a standard selection procedure undertaken by SSOs for interoperability and
sustainability purpose.10 During the course of selection, SSO members make self-declarations to tout
their proprietary technologies for incorporation into a standard.11 Nonetheless, SSOs incorporate a
declared patent into a standard without independently verifying its essentiality.12 This has aroused
debates over the standard setting mechanism with the global application of 4G and 5G protocols.
In practice, some so-called SEPs were overvalued for lack of in-depth scrutiny on the essentiality,
which scrutiny is regarded rather costly and time-consuming.13 Jorge Contreras has noted that patent
pools that collect SEPs to facilitate licensing transactions, spend between $10,000 and $15,000 per
patent to verify essentiality. 14 SSO members are inspired to make over-declaration in contest for
qualification of each owned technology as SEP. SEP monopolies granted by deceptive means are not
achieved through competition on the merits.15 Once a patented technology is integrated into a global
8
Microsoft Corp. v. Motorola, Inc., No. C10-cv-1823JLR (W.D. Wash. 2013)
9
In re Innovatio IP Ventures, LLC Patent Litig, MDL2303 (N.D. Ill. 2013)
10
Daniel G. Swanson, William J. Baumol, Antitrust LJ. 2005, 1(6)
11
Mark A. Lemley, Cali L Rev. 2002, 1889(1933)
12
Jorge L. Contreras, Antitrust LJ. 2013, 47(60)
13
Cody M. Akins, Tex L Rev. 2020, 579(587)
14
Jorge L. Contreras, Antitrust LJ. 2013, 47(77)
15
Michelle Emeterio, UC Irvine L Rev. 2022, 1091(1098)

telecom standard, the industry will be too entrenched to retrograde at unaffordable switching costs.16
Meanwhile, over-declaration will artificially inflate the price of non-essential patents in licensing
negotiations and skew judicial analysis on FRAND rate.17 This calls to mind the “top-down” approach
in the US case Innovatio where the shares of an aggregate rate for all SEPs in a standard are apportioned
amongst SEP holders.18 If the apportionment does not take actual essentiality into account, putatively
essential patents would be also allocated a share of the total royalty.19 Hence, the absence of the proof
for essentiality of SEPs may cause legal uncertainty and judicial inefficiency.
2. SEP holdup hypothesis
A classic assumption about patent enforcement over decades is patent holdup, or a figurative
jargon “patent ambush” in case of SEP monopoly.20 Patent holdup is a hypothesis stemming from
Williamson’s economic theory.21 SEP holdup conjecture posits when an unlicensed implementer has
made a sunk investment in implementing a standard and thus becomes “locked in” to it, an SEP holder
comes into play ex post and tries to recoup from the infringer inordinately high royalty exceeding the
ex-ante value of the SEP in the standard.22
Some scholars recognize that patent holdup is no more than a fallacy. Gregory Sidak contends that
“the patent-holdup conjecture is an expedient hoax” by presenting counterevidence that patentees’
disclosure of SEPs mandated by SSOs already gives adequate notice to implementers and therefore,
there is supposed to be little chance that implementers are surprised by SEP claims.23
Conversely, the proponents of holdup theory like Michelle Emeterio demonstrate a high frequency
of evidentiary holdup by referring to the empirical SEP litigations where the adjudicated royalty
typically shows that the proprietor demanded far beyond what is legitimately FRAND, amounting to
16
17
Cody M. Akins, Tex L Rev. 2020, 579(588)
18
Innovatio, MDL2303
19
Jason R. Bartlett & Jorge L. Contreras, Rev Litig. 2017, 285(309)
20
Thomas F. Cotter, et al, Wash & Lee L Rev. 2019, 1501(1541)
21
Oliver E. Williamson, The Economic Institutions of Capitalism: Firms, Markets, Relational Contracting, 52-54
22
Thomas F. Cotter, et al, Wash & Lee L Rev. 2019, 1501(1544)
23

holdup.24 This indicates global SEP litigations must have been triggered at a certain point, such as
SEP holdup.
Irrespective of the scholarly controversy, personally, this hypothesis serves as an ex-ante alert for
SEP owners. It does not necessarily need substantiation with a real-life instance because the
hypothetical phenomenon has certain legal implications for legislator or judge. Judicial weighting of
holdup in FRAND valuation can at least deter SEP holder from overpricing its technology in the
marketplace.
3. Royalty stacking hypothesis
Royalty stacking is another hypothetical concern that may compound the issue of patent holdup.25
Royalty stacking is a particular embodiment of “Cournot Effect” of complementary SEP techniques
under various ownerships, which posits that: a patented technology with lower price would be “over-
supplied” in the market, boosting the customer’s demand for its complements with higher price, and
eventually, each of the SEP owners barely has incentive to charge lower licensing fees than the others.26
This theory is termed as royalty stacking.
In telecom context, UE as the end-product integrating 3GPP standards corresponding to a vast of
SEPs, may constitute such a product that more than one patentees can independently claim cumulative,
i.e., “stacking” royalty from a UE manufacturer. The conjecture predicts that the sum of all
independently demanded royalties might impose exorbitant royalty on the licensee.27 Royalty stacking,
as a matter of simple arithmetic, will multiply patent holdup if numerous SEPs read on the same one
product.28
A stack of unfair royalties will jeopardize the practicing entities against transforming SEPs into
marketable products, which truly help to monetize the SEPs for patentees. Realistically, it is not
complex to appreciate that a claimant, if as a Non-Practicing Entity (NPE), would refrain from
24
25
Mark A. Lemley & Carl Shapiro, Tex. L. Rev. 2007, 1991(1993)
26
Jorge L. Contreras, Antitrust Bull. 2017, 690(691)
27
28

claiming excessive fees or diligently invoking exclusion orders against SEP recoupment. No
implementation, no SEP revenues.
Yet, comparable to patent holdup hypothesis, royalty stacking theory is still instructive from
jurisprudential perspective. As comparatively analyzed later, the “top-down” approach to royalty
determination remarkably outshines the “bottom up” approach in deterring royalty stacking.
II. Disputes over the enforcement mechanism of FRAND commitment
For fear of the above hypothesis, SSOs undertake the duty to mandate FRAND commitment with
each proprietor during standardization process. FRAND aims to strike a fair balance between upstream
proprietors and the downstream innovators by depriving SEP holder of the undue leverage of its
augmented monopolistic privilege and prohibiting any abuse of dominant power in the marketplace,29
and ultimately foster innovative ecosystem. However, the vagueness and non-transparency of FRAND
terms in early times resulted in a mixed or even synchronized enforcement in different legal contexts.30
SSOs barely elaborate or harmonize the definition of “FRAND,”31 leaving it interpretated mutatis
mutandis amongst global judiciaries.
1. The contractual essence of FRAND commitment
Prior to the official inclusion of a patent into a standard, SSOs request a Letter of Assurance (LOA)
in case of IEEE and ITU32, or IPR licensing declarations in case of ETSI, from the SEP holder to
declare its intention either not to enforce its patent, to license on FRAND terms, or to decline
incorporation into the standard.33 Mainstream international legislations admit the SEP holder has the
contractual obligation of licensing SEPs on FRAND basis. In Microsoft v. Motorola, the Ninth Circuit
affirms that if an SEP holder’s signed LOA states acceptance of FRAND terms, it would constitute a
binding contract with SSO.34 Such FRAND mandate pertains to SSOs’ IPR policy rather than statutory
29
Richard A. Epstein & Kayvan B. Noroozi, Berkeley Tech LJ. 2017, 1381
30
Claire Guo, J Marshall Rev IP L. 2019, [i](269)
31
Mario Mariniello, J. Comp. L. & Econ. 2011, 523(532)
32
IEEE, Letter of Assurance for Essential Patent Claims
33
ETSI, IPR Licensing Declaration forms
34
Microsoft Corp. v. Motorola, Inc., 696 F.3d 872, 885 (9th Cir. 2012)

provision but is enforceable as a contract with SEP holders.35 Regarding the contractual content of
FRAND, e.g., American National Standards Institute (ANSI)’s 2022 FRAND policy defines that SEP
holder must license to similarly situated licensees under the reasonable terms and conditions that are
demonstrably free of unfair discrimination.36
As such, the “FRAND contract” identifies the standard implementer as a third-party beneficiary
and thus entitled to demand performance of the contractual obligation in the ambit of US contract
law. 37 In Microsoft v. Motorola, Judge Robart recognizes that the implementer as a third-party
beneficiary can accuse the patentee of a breach of FRAND contract.38 China also followed suit by
approval of the implementer to sue upon FRAND contract in Huawei v. Interdigital.39 Even though
IEEE or ITU does not supervise SEP holder’s FRAND performance, contract law is still a viable
enforcement mechanism due to jurisprudential essence of FRAND being contractual.
In greater detail, the performance of contract dictates the principle of good faith under the national
contract law of China (Art. 509 of Chinese Civil Code) and the United States (known as an implied
duty). Thus, the obligor, i.e., SEP owner must redeem its FRAND commitment in good faith. In
Huawei v. Interdigital, the Shenzhen Court examined the proprietor’s FRAND behavior against the
principles of good faith and fair dealing to draw a baseline for FRAND breach. 40 SEP holder’s
willingness to negotiation or responsiveness to an offer reflects its good faith. On the contrary, the
proprietor’s inactivity upon receipt of a willing licensee’s offer departs from good faith. Inappropriate
enforcement of its SEP, like seeking for injunctive relief without negotiation, immediately fails good
faith.
Further, if SEP holder is explicitly unwilling to lower its non-FRAND rate, in China and US, the
implementer may also lodge an action on the ground of anticipatory breach,41 such as under Art. 578
35
Microsoft Corp. v. Motorola, Inc., 696 F.3d 872, 885
36
ANSI Essential Requirements 2022, Art. 3.1.1
37
Mark A. Lemley, Calif L. Rev. 2002, 1889(1909)
38
Microsoft v. Motorola, No. C10-cv-1823JLR
39
Huawei v. Interdigital, (华为诉交互数字技术公司滥用市场支地位及标准必要专利许可费纠纷案) Yue Gao Fa Min Zhong Zi, No.
306 (Guangdong Higher People’s Ct. 2013)
40
Huawei v. Interdigital, Yue Gao Fa Min Zhong Zi, No. 306
41
Kassandra Maldonado, Berkeley Tech LJ. 2014, 419(456)

Chinese Civil Code, by proving the obligor’s positive statement of non-performance.42 Thus, in the
US and China, the fulfilment of FRAND commitment is overseen under multiple statutes in the sole
ambit of contract law.
However, in Germany, the implementer cannot invoke contractual remedy to SEP holder’s non-
FRAND demands. In IPCom v. Deutsche Telekom and Vodafone, German SEP infringement courts
have construed FRAND commitment as mere declaration of an obligation submitted to ETSI to
conclude a contract that already exists under German competition law. 43 The wording of “non-
discriminatory” element of FRAND also seems to signify some overlap with antitrust policy.
Competition law is then practically the only legal framework for FRAND disputes in Germany.44
2. Antitrust implications from FRAND commitment
In Huawei v ZTE, CJEU authorizes antitrust scrutiny on breaches of FRAND if there is a sign of
abuse of market dominance.45 CJEU sets out the landmark criteria for courts to assess if or not Art.
102 TFEU intrusions are present when injunction is sought for by the patentee, particularly, a
negotiation protocol extending to both the two parties.46 The protocol requires 1) the SEP owner to
provide notice of infringement and initial offers on FRAND terms, and 2) the SEP implementers to
respond diligently and provide counter-offers recognized by industry practice without engaging in
delaying tactics 47 . Therefore, in EU, antitrust implications will rest upon a series of interactions
between the two stakeholders in FRAND context. For instance, right holder’s initial offer of
unreasonable royalty does not indicate the licensee has a meritorious cause of action for
anticompetitive conduct.48
Post-Huawei v. ZTE, rulings in lower courts in Germany have assumed that in order to avoid a
finding of abuse of dominance, SEP holder must make an initial FRAND offer to a potential licensee.49
42
Microsoft v. Motorola, 864 F. Supp. 2d 1023, 1036 (W.D. Wash. 2012)
43
LG Düsseldorf Urt. v. 24.4.2012 - 4b O 274/10
44
Haris Tsilikas, IIC-Int’L Rev. Intell. Prop. & Comp L. 2017, 151(165)
45
Case C-170/13 Huawei v ZTE [2015] ECR 477
46
47
Case C-170/13 Huawei v ZTE [2015] ECR 477 ¶71
48
49

It follows that to comply with Art. 102 TFEU, and not to lose the last resort to injunction, SEP holder
may need to delineate a certain level of royalty within the meaning of “FRAND offer”. However,
CJEU does not illuminate the extent to which a non-FRAND license can infringe Art. 102 TFEU.
Afterwards, in Unwired Planet v. Huawei, the UK court enlightens the interlink between FRAND
and antitrust violations. The UK court sets forth that FRAND terms have weakened SEP owner’s
market dominance but the boundaries of FRAND and competition law are not the same. 50 A rate
offered above FRAND rate in the first instance may be not definitely contrary to competition law.51 If
any deviation from the court-determined rate is antitrust breach, the SEP owners would be overly
burdened to make initial offers.52 This may not yet legitimize the intention to place the implementer
at the mercy of SEP holder by sticking to exorbitant royalty. Like Huawei v. ZTE, nonetheless, the UK
court does not lay down the specific threshold for such an exorbitant royalty that it brings about
antitrust suspicion.
3. Patent holdout: Exception to FRAND defense
“Patent holdout”, also named “reverse holdup” or “efficient infringement”, refers to SEP
implementers’ refusal to negotiate in good faith53. Implementers’ holdout mischief strategically forces
the innovator to either undertake significant litigation costs and time delays to extract a licensing
payment through a court order54. Incentives for patent holdout could originate from the implementer’s
expectation that the patent would be devaluated by challenging the essentiality to standard, and that
the patent holders will not assert their patents before court owing to the uncertainty and costs of
litigation, or that a request of counterclaim may succeed in nullifying an SEP before patent office.55
The history proceedings in the US, such as Microsoft v. Motorola and Apple v. Motorola, exhibit
that the US courts and policymakers were agonized by the illusory patent holdup in favor of the SEP
50
51 Unwired Planet v. Huawei (2017) EWHC 711 (Pat) ¶757
52
53
Michael Renaud, INTELL. ASSET MGMT. 2016, 59
54
Richard A. Epstein & Kayvan B. Noroozi, Berkeley Tech LJ. 2017, 1381(1384)
55
Yann Ménière, Fair, Reasonable and Non-Discriminatory (FRAND) Licensing Terms—Research Analysis of a
Controversial Concept, 15

implementer, whereas they largely overlooked the factual severity of patent holdout, and even
exacerbated it through a series of missteps in the past. 56 Arguably, judicial decisions prone to
penalizing SEP holders from injunction would help nurture holdout practice by dishonest implementers.
In Huawei v. ZTE, CJEU outlaws unwilling licensee’s holdout by ruling that the alleged infringer
should actively engage in FRAND negotiation. 57 CJEU conditionally legitimizes SEP holder’s
attempt to injunction on SEP holdout despite FRAND constraints whereas patent holdout is statutorily
treated as an exception to FRAND defense.
On some occasions, the implementer can justify its “holdout” or unwillingness in relation to non-
discriminatory prong of FRAND. Where similarly situated implementers have signed FRAND
agreement with SEP holders, the licensee’s reluctance to pay commensurate amount of fee is normally
deemed as holdout, unless he is able to justify his objection to the offered rate under specific unsettled
discords. In Sisvel v. Haier, German Federal Court of Justice adjudges that for “non-discriminatory”
purpose, according to the market dynamics, it is not obligatory for the SEP holder to apply a ‘standard
tariff’ to all licensees with identical pricing, whereas patent holders must establish a justification
behind an unequal treatment of licensees and the infringer also has the duty to clarify why the offer is
discriminatory.58
C. Judicial harmonization on FRAND royalty
Ever since Huawei v. ZTE, the stakeholders are supposed to refrain from speculative mischiefs
like patent holdup or holdout infringement. Instead, bilateral negotiation is encouraged by CJEU, as
the binding negotiation code consists of all the necessary steps towards the FRAND license without
the need of any judicial intervention.59
When out-of-court negotiation sinks into impasse, each party could not but bank on legal
instruments. As the global SEP litigations reveal so far, the issues ultimately narrow down to the kink
56
57
Case C-170/13 Huawei v ZTE [2015] ECR 477 ¶71
58
BGH Urt. v. 5.5.2020 - KZR 36/17 BGHZ 225, 269
59
Andre Schevciw, AIPLA Q J. 2019, 369(397)

of FRAND royalty resolution. However, the courts generally lack a distinct vision of FRAND
negotiation, technological details, and market conditions. With limited competence, the courts are
adopting rudimentary and defective approaches to FRAND royalty, e.g., the top-down and bottom-up
methodologies as noted earlier. The following firstly elucidates the complications with the judicial
practices in harmonizing FRAND royalty, and secondly, based on the exposed issues, proposes a
preferable solution.
I. Complications with judicial approaches to FRAND royalty
This section debates about the tribunal approaches to FRAND royalty, including Georgia-Pacific
(G-P) framework, comparable license methodologies, followed by a comparative analysis of top-down
vs. bottom-up approaches, and finally, the approach of transnational harmonization by national court
on a global FRAND royalty. This can be viewed as a signpost of how to reform the legal mechanism
for addressing FRAND disputes in the future.
1. Hypothetical negotiation & Georgia-Pacific framework
To begin with, hypothetical negotiation & G-P framework is thoroughly studied for ease of
investigation on its derivative methods of FRAND royalty calculation in specific SEP cases, as well
as exploring new feasible approach.
a. Overview
A milestone ruling for reasonable royalty damages arose from the Georgia-Pacific case in 1970,
where a 15-factor Georgia-Pacific framework serves as the agenda for a “hypothetical negotiation”.60
This framework is a long-lasting foundation for contemporary analysis of reasonable royalty damages,
well-accepted by the US courts.61 The Federal Circuit has defined it as the “willing licensor-willing
licensee” approach to ascertaining the royalty upon which the parties would have agreed had they
successfully negotiated a license just before the infringement began. 62 Namely, the fundamental
60
Georgia-Pacific Corp. v. United States Plywood Corp., 318 F. Supp. 1116 (S.D.N.Y. 1970).
61
Richard F. Cauley, Winning the Patent Damages Case, 7
62
Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1324 (Fed Cir. 2009)

rationale behind it is to deter ex-post patent holdup whereas it does not address patent holdout.
This approach came into FRAND picture as early as Microsoft v. Motorola in which Judge Robart
adaptively modified the Georgia-Pacific factors to reconstruct a FRAND-compliant hypothetical
negotiation.63 The Microsoft factors prioritize the contribution of the SEPs at issue to the standard,
and the importance of the standard and the SEPs to the infringing products, as in Microsoft factors 6,
8, 10, 11, and 13.64 Judge Robart also highlighted the purpose to mitigate patent holdup and royalty
stacking by neglecting the value associated with incorporation into the standard.65
b. Applicability of hypothetical negotiation to SEP infringement
Foremost, hypothetical negotiation frames patent infringement as a contractual issue with an
analogy to real-world negotiation aimed at royalty rate.66 35 U.S.C. § 284 provides that an injured
party is entitled to “damages adequate to compensate for the infringement, but in no event less than a
reasonable royalty for the use made of the invention by the infringer.” This statute does not demand a
negotiation for compensation, but specifies the damages are assessed against the factual infringing
conduct. 67 It is conceptually obscure to view the damages compensation for the tort of SEP
infringement as amounting to an ex-ante agreed royalty from a retroactive negotiation.68 Conversely,
damages ought to be commensurate with the actual consequences of the infringing activity, including
the patentee’s lost profits and lost licensing opportunities.69 But hypothetical negotiation is likely to
be inconsistent with the ex-post evidence including, among other things, the infringer’s earned profits,
as the litigants acted in the absence of an agreement.70
The fiction will pretend at least a part of facts after the date of the hypothetical negotiation, such
as the market price of or the revenue made from the infringing products, are unavailable.71 It thus
63
Microsoft v. Motorola, No. C10-cv-1823JLR *41
64
65
Microsoft v. Motorola, No. C10-cv-1823JLR*38
66
John C. Jarosz & Michael J. Chapman, Stan Tech L Rev. 2013, 769(785)
67
68
69
Daniel F. Spulber, U Ill L Rev. 2019, 615(656)
70
71
Federal Trade Commission, The Evolving IP Marketplace, 166-167

instigates unproductive debates over the timing of such negotiation.72 The debates are compounded in
case of the asserted portfolio of SEPs with multiple dates of “first infringement,”73 which unduly
amplifies the judicial complexity of yielding an equitable result.
Another consideration is that the uncertainties and motivations that drive real-world negotiations
do not exist in a hypothetical negotiation. 74 Admittedly, on certain conditions (e.g., an upfront
payment), ex ante signed agreement lawfully hampers the patentee from ex post claiming licensing
fees otherwise when the implementer’s ex post revenue amazingly goes beyond the ex-ante bilateral
expectations. However, it is impossible for the court to ascertain the ex-ante intangible knowledge,
beliefs and expectations of the patent holder and infringer had they entered a negotiation before the
infringement began.75
The construct must be premised upon a valid, enforceable, and infringed patent, and the
essentiality of SEP.76 In reality, the implementer might rather anticipate holdout by lodging annulment
actions. But the judicial branch is not in a position to reckon those scenarios.
The unrealistic assumption of willingness, which gives priority to holdup avoidance, would
contravene the notion of Huawei v. ZTE which further seeks to address SEP holdout. In Microsoft v.
Motorola, Microsoft responded to Motorola’s opening offer by immediately filing a lawsuit—an
approach the district court and Ninth Circuit embraced and rewarded.77 But settling FRAND disputes
through the delusion of good-faith negotiators is counterproductive in the event of unwilling licensee’s
stalling tactics. The implementer-favorable construct is thus disproportionate and obsolete as per
Huawei v. ZTE.
As is unveiled later the proposed “informed contract” approach offsets all the aforesaid flaws of
hypothetical negotiation.
72
73
74
Mark A. Lemley & Carl Shapiro, Tex. L. Rev. 2007, 1991(2019)
75
Fujifilm Corp. v. Benun, 605 F.3d 1366, 1372 (Fed. Cir. 2010)
76
77

c. Applicability of the Georgia-Pacific factors to SEP royalty disputes
The Microsoft court altered a majority of the G-P factors to lessen the bargaining disparity on
account of SEP status.78 In Ericsson v. D-Link, the court observes that at least five of the G-P factors
are opposed to FRAND-encumbered patents. 79 Comparative analysis on the applicability of G-P
factors to SEP disputes is made below according to the two cases.
• Factor 1: Existence of an established royalty. A prerequisite is that the patentee’s lease must be
FRAND encumbered. 80 Licensing of the same patent but outside the status as an SEP does not
mandatorily trigger FRAND implications,81 in which case an SEP may be lawfully renumerated at a
higher rate than FRAND. Ignorance of this may lead to non-FRAND judgement in favor of SEP
holders. The Microsoft court altered this factor: “licensing royalties for a given patent(s) must be
comparable to [F/RAND] licensing circumstances.”82 The Ericsson court was silent on Factor 1.83
• Factor 2: Rates paid by licensee for comparable patents. Factor 2 indicates the essentiality of an
SEP may be undermined by any available alternative.84 Otherwise, Factor 2 produces a paradox of
recognizing both the “essential” and the “alternative”. Patented technologies tend not to have 1:1
alternative to their specific use and function, except for similarly functioning devices in mechanical
field. 85 Licensing fees for superficially comparable alternative may not properly approximate the
value of an SEP to the standard and thus Factor 2 would confound the judicial analysis.86 But neither
of the courts altered Factor 2.
• Factor 3: Nature and scope of the license. This factor is inherent to a license but will not skew
the royalty determining process. FRAND commitment only encumbers the license by default to be
non-exclusive in nature and scope, because courts would readily find violation of the “non-
78
Microsoft v. Motorola, No. C10-cv-1823JLR
79
Ericsson v. D-Link, 773 F.3d 1201(Fed. Cir. 2014)
80 Apple v. Motorola, 869 F. Supp. 2d 901, 911(N.D. Ill. 2012)
81
82
83
Ericsson v. D-Link, 773 F.3d 1201, 1230-32
84 Samuel Howard, BU J Sci & Tech L. 2021, 204(218)
85
Innovatio, No. 11 C 9308, *161
86
Samuel Howard, BU J Sci & Tech L. 2021, 204(218)

discriminatory” prong, otherwise.87
• Factor 4: Licensor’s established licensing policy to maintain a monopoly. Both courts eliminated
Factor 4 since the FRAND commitment has invalidated the private monopolistic policy.88
• Factor 5: Commercial relationship between licensor and licensee. It may concern whether the
commercial relationship (e.g., competitors) will affect the right holder’s willingness to license.89 For
FRAND purpose, Factor 5 was disregarded by both courts.
• Factor 6: Effect of selling patented specialty and existing value of the invention as a generator
of sales for other non-patented items. As noted, the Microsoft factors emphasize the contribution of an
SEP to the standard instead of assessing the licensee’s revenue harvested from the standard,90 which
is the case for applying Factor 6. This bright-line rule likely averts inflating SEP’s value, but may fail
to consider the intent of an SSO when incorporating a patent into a standard.91
• Factor 7: The duration of the patent and the term of the license. The term of a license for a
FRAND-encumbered patent is usually the duration of the patent. 92 Hence, Factor 7 does not
dramatically affect the justice of adjudged royalty.
• Factor 8: Established profitability, commercial success, and current popularity. Both courts
suggested adjusting Factor 8 out of similar considerations as Factor 6.
• Factor 9: Comparative utility and advantages of the patent property over the old modes or
devices. Factor 9 is associated with the incremental value of the SEP over another technology. Akin to
Factor 2, such substitution of technology ignores the realities of complex standards, and assuming
superiority may unfairly reward an SEP-holder.93 The Microsoft court backing Factor 9 alleged that
parties would consider alternatives instead of the SEP prior to standardization.94 The Ericsson court
87
88
Ericsson v. D-Link, 773 F.3d 1230-32
89
Ericsson v. D-Link, 773 F.3d 1231
90
Microsoft v. Motorola, No. C10-cv-1823JLR, *59-60
91
92
93
94

cautioned against Factor 9, as SEP technology does not necessarily indicate an incremental value.95
• Factor 10: Nature and benefits of the patented invention. In connection with Factors 6 and 8,
the courts frustrate the justification for overpricing an SEP by its special status. The US courts
unanimously rebutted using product’s market performance to calculate damages, e.g., in Garretson v.
Clark and Uniloc v. Microsoft.96 The Ericsson court did not retain Factor 10 or 11,97 whereas the
Microsoft court combined it with Factor 11 as both factors are “relevant to the capability of the
standard and contribution of the standard to the implementer.”98
• Factor 11: Extent of the licensee’s use of the patent and the value thereof. See Factor 10.
• Factor 12: The customary portion of the profit or selling price paid as licensing royalty. Factor
12 is directed to comparable licenses and a markdown of the infringer’s profit.99 The Microsoft court
limited it to the investigation of “customary practices of businesses licensing RAND-committed
patents”.100 The Microsoft court averaged the royalty rate in Via 802.11 patent pool, the price of
Marvell Wi-Fi chip, and InteCap Analysis as the benchmark rate of Motorola’s SEPs relating to 802.11
standard101. Having regard to the Marvell chip price is to obey the doctrine of smallest salable patent-
practicing unit (SSPPU) in LaserDynamics v. Quanta Computer.102 But the reference to the de facto
tariff in patent pool as benchmark rate is controversial due to the numerical proportionality, which
presumes equal royalty for every SEP independent of its strength (e.g., essentiality and validity), thus
boosting inflation of the number of patents in the pool.103
• Factor 13: Portion of profit creditable to patented invention. Both courts treated Factor 13 in the
same manner as they do for Factors 10 and 11, in which the Microsoft court highlights that “… the
value of the patent as the result of its incorporation into the standard … would improperly reward the
95
96
Garretson v. Clark, 111 U.S. 120, 121(1884); Uniloc. v. Microsoft, 632 F.3d 1292, 1318 (Fed. Cir. 2011)
97
98
99
100
Microsoft v. Motorola, No. C10-cv-1823JLR, *261
101
102
LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d 51, 67(Fed. Cir. 2012)
103
Damien Geradin, Geo Mason L Rev. 2014, 919(953)

SEP-owner for the value for the standard itself.”104
• Factor 14: The testimony of qualified experts. Factor 14 was not modified by the two courts, as
it will not be distorting. Exceptionally, in Ericsson v. D-Link, the defendant opposed the testimony of
Ericsson’s expert Mr. Bone. 105 The argument is Mr. Bone breached the entire market value rule
(EMVR) due to the failure to apportion his royalty base between the accused and non-accused features
of the downstream product in light of SSPPU, and further, no evidence proved Ericsson’s SEPs drove
market demand for the defendants’ entire products.106 Chief Judge Davis rejected by stating Mr. Bone
based the calculation on Ericsson’s revenue, which was not attributable to the end products, but rather
to the value of Ericsson’s patents essential to the Wi-Fi standard.107
• Factor 15: Ex-ante hypothetical negotiation. Refer to the hypothetical negotiation as detailed in
the foregoing.
Except the impractical Factor 15, the other factors still deserve refinement and exploitation. G-P
factors are comprehensive but also complex to implement. The courts have been struggling to optimize
the technique for FRAND royalty calculation by virtue of the G-P framework. The subsequent
approaches hereinafter are judicial mutations of G-P framework for analytical simplicity.
2. Comparable license methodology
Comparable license methodology, which integrates G-P Factors 1, 2 and 12, begins with
identifying the sufficiently comparable licenses with similarly situated parties for analogous set of
patents.108 It has been endorsed by numerous jurisdictions including the US, China, Germany, the UK,
etc., as summarized below.
a. Adoption by courts worldwide
As noted, Judge Robart derived a royalty relying on patent pool licensing arrangements (G-P
104
105
Ericsson v. D-Link, 773 F.3d 1201, 1225
106
Ericsson v. D-Link, 773 F.3d 1201, 1225-29
107
Ericsson v. D-Link, 773 F.3d 1201, 1236
108
TCL v. Ericsson, No. SACV 14-341 JVS(DFMx) *54

Factor 12) in Microsoft v. Motorola.109 In HTC v. Ericsson, the district court held that comparable
licenses are “highly probative, given the sophistication of the market and the amount of resources and
time that the industry devotes to negotiations.”110 The Federal Circuit confirmed in Apple v. Motorola
that “using sufficiently comparable licenses is a generally reliable method of estimating the value of a
patent.”111
Likewise, in assessing compliance with Huawei v. ZTE, inter alia, non-discrimination prong of
FRAND, German court attached significance to comparable licenses such as in Saint Lawrence v.
Vodafone, and Tagivan (MPEG-LA) v. Huawei.112 Düsseldorf court held that the higher the number of
concluded licensing agreements on similar conditions, the stronger the presumption that such terms
are indeed FRAND.113
The UK High Court, in Unwired Planet v. Huawei, directly set a global FRAND rate for plaintiff’s
SEP portfolio through comparable licenses.114 The judge submitted that FRAND obligations constrain
both parties in their conduct during licensing negotiations, and accordingly, the real-life comparable
licenses offer pertinent evidence of FRAND terms concurred by parties.115
In Huawei v. Interdigital, Shenzhen court investigated Interdigital’s comparable licenses with
Samsung, Apple, and others to examine whether the royalty rates Interdigital offered to Huawei were
discriminatory, and to calculate the appropriate FRAND rate.116
b. Merits of using comparable licenses
Aside from the courts’ endorsements, comparable licenses have further substantial merits.
Foremost, comparable licenses intuitively unfold the prospect of FRAND royalty for similar
transactions in the marketplace. Negotiated SEP licensing agreements characterize the meaning of
109
110
HTC v. Ericsson, No. 6:18-CV-00243-JRG (E.D. Tex. 2019) 10
111
Apple v. Motorola, No. 2012-1548 (Fed. Cir. Apr. 25, 2014) 60
112
LG Düsseldorf Urt. v. 31.3.2016 - 4a O 73/14
113
LG Düsseldorf Urt. v. 15.11.2018 - 4a O 17/17, ¶225
114
Unwired Planet v. Huawei (2017) EWHC 711 (Pat)
115
116
Huawei v. Interdigital, Yue Gao Fa Min Zhong Zi, No. 306

FRAND in industry-specific sense as well as how the good-faith negotiators perceive it.117 Unlike the
hypothetical negotiation, those achieved contracts expose the real expectation and knowledge of each
party and thus, the willing participants’ jointly chosen clauses of the contracts including royalties
implicitly define what is meant by “FRAND”.118
In line with the LOA mechanism, parties are well-informed, in a competitive market environment,
about the publicly available standards and the involved SEPs to accomplish a bilateral transaction.119
The finalized contracts have thus ruled out the patent holdup and holdout hazards, enabling the courts
to have a clear-cut recognition of FRAND embodiments in the market by exploring the comparable
provisions.
The reality-oriented approach also functions in concert with the objective of SSOs’ IP policies. As
introduced earlier, SSOs incentivize competition among upstream market players (e.g., NPEs), and
promote fair market transactions between SEP holders and implementers with a view to high
performance standards.120 Although voluntary parties’ negotiations are routine and commonplace121,
they can realize FRAND provisions and thus, are meritorious in light of SSOs’ IP policies. As such,
courts should consider these customary practices so as not to intervene SSOs’ IP regulation and the
competition in the upstream industry.
Comparable licenses also enable courts to benefit from the resources and expertise invested by
private parties in collecting information necessary for a proper valuation of SEP portfolio.122 They can
alleviate the information asymmetry between the industry and courts,123 in such a way that the court
will not make blind speculations as will do via hypothetical negotiation. Recourse to real-life
transactions can simulate market outcomes and elevate the accuracy of setting FRAND rates that
reflect actual supply-and-demand conditions in the market.124 Thereby, market price signals, based on
117
Daniel F. Spulber, Colo Tech LJ. 2020, 79(117)
118
119
120
European Commission Communication on Setting out the EU approach to Standard Essential Patents, 2
121
122
Haris Tsilikas, CPI IP Column. 2020, 1(5)
123
124

which private parties make investment decisions, may not be interfered with.125
In doing so, the court is exempted from reproducing the overly complex analysis of G-P factors
or recurrently adjusting them mutatis mutandis on case-by-case basis. It can thus bolster the judicial
impartiality and efficiency insofar as relevant comparison to the specific disputes is made. The later
proposed “informed contract approach” is infused with the above properties of comparable licenses.
c. Drawbacks of using comparable licenses
For the contentions below, this methodology is not flawless or 100% reliable when put into
practice, albeit commended by courts as the optimal FRAND metrics.
The plausibility of this method is contingent on precise factual elements that allow associating the
previous license royalties with the particular case. 126 Thus, one source of challenge is the
comparability, e.g., as to which parties are similarly situated, and whether the royalty is eligible as a
benchmark rate, etc.127 Judicial divergence empirically occurred on this matter. Recalling G-P Factor
12, Judge Robart remarked patent pool as a good comparable indicator of FRAND royalty128, whereas
in Innovatio, Judge Holderman concluded otherwise by recognizing the unfairness of numerical
proportionality.129 Meanwhile, recalling G-P Factor 1, in the event that the only available licenses for
the same SEP are made outside the FRAND scope, then no comparable one exists. Recalling G-P
Factor 2, the price of so-called “alternative” comparable technology is not recommended as a valid
FRAND indicator unless it can overrule the essentiality of the SEP.
In Realtek v. LSI, Judge Whyte set out a comparability criteria regarding the licenses in 802.11
standard. 130 However, the challenge remains in identifying how comparable the parties in those
licenses are with the case at hand, noting that enterprises differ in lots of aspects, such as their size,
bargaining power, the scale and scope of operations, IP ownerships, and their resources for and
125
126
Apple v. Motorola, No. 2012-1549, 11
127
128
129
Innovatio, 921 F. Supp. 2d 903 (N.D. Ill. 2013)
130
Realtek Semiconductor Corp v. LSI Corp, 946 F. Supp. 2d 998 (N.D. Cal. 2013)

expertise in negotiating licensing deals.131
Comparable licenses under the Realtek criteria may be opaque to the court. One reason is license
agreements usually have a confidentiality regime in place as the parties have an interest to keep the
conditions secret from competitors.132 In Sisvel v. ZTE, the German court required the SEP holder to
disclose all relevant licenses of the patents in suit, in order to constitute an appropriate basis for
comparison and to evaluate the “non-discriminatory” prong.133 However, this order would give parties
a litigation access to competitors’ agreements, leading to unfair commercial advantage.134 Even if the
licensor shares this information, it is hard to verify the authenticity, like whether the shared materials
are cherry-picked or whether the past deals represent the up-to-date value of the licensed SEPs.135
3. “Bottom-up” & “Top-down” methodologies
Next, a comparative analysis of bottom-up and top-down approaches will be given to demonstrate
that the courts, in absence of the in-depth perception of the market situation, derive inaccurate royalty
estimates for FRAND disputes.
a. Overview
The bottom-up method, or proportional contribution approach, starts with the price of the final
infringing product and bases the maximum royalty rate per product on the cost for implementing
alternative technologies to the SEP at issue.136 It largely evolves from Microsoft factors with regard
to the “contribution” of individual SEPs to the infringing products at issue, but regardless of the
valuation of the remaining SEPs in the identical standard. 137 The aggregate royalty for the entire
standard is simply a summation of all bottom-up royalties, each independently determined by separate
courts without coordination with one another.138 As noted, it risks royalty stacking in that the sum of
131
132
Florian Schmidt-Bogatzky & Clemens Heusch, Int’l In-House Counsel J. 2018, 1(3)
133
LG Düsseldorf Urt. v. 13.7.2017 - 4a O 154/15
134
Florian Schmidt-Bogatzky & Clemens Heusch, Int’l In-House Counsel J. 2018, 1(3)
135
Christopher S. Storm, Tex Intell Prop LJ. 2022, 259(276)
136
Matthieu Dhenne, European Intell Prop Rev. 2019, 754(759)
137
Innovatio, MDL2303
138
Jorge L. Contreras, Wash L Rev. 2019, 701(715)

the individually adjudicated royalties may not intimately correspond to the FRAND value of a
standard.139
The contrasting top-down approach determines in the first place an aggregate royalty for all SEPs
of a standard, and then allocates a portion to individual SEPs according to certain apportionment
methodology.140 In confining a royalty cap for an entire standard that is payable by the implementers,
top-down approach suppresses the fear for royalty stacking. As such, top-down approach can remedy
the risk of an overstated total of the discrete bottom-up values for a single standard. As the trial judge
in Innovatio put it, a “top-down approach best approximates the RAND rate that the parties to a
hypothetical ex-ante negotiation…”141 Likewise, in Samsung v. Apple Japan, the Japanese court also
allocated a fraction of aggregate royalty to Samsung’s asserted SEP based on the total number of 3G
UMTS-essential patents.142
b. Drawbacks
The bottom-up methodology potentially incurs significant discrepancy from the top-down
aggregate and inconsistency of rates among the isolated judicial branches for the same standard.143
According to Jorge L. Contreras, Table 1 below illustrates the inconsistent royalties adjudicated by the
US courts for 802.11 Wi-Fi standard in different SEP litigations.
Table 1 The US FRAND Royalty Adjudications for 802.11 SEPs144
Case Court (Year) Royalty

Microsoft v. Motorola W.D. Wash. (2013) $0.035 per unit
Innovatio N.D. Ill. (2013) $0.0956 per unit
Ericsson v. D-Link E.D. Tex. (2013) $0.15 per unit
Realtek v. LSI N.D. Cal. (2014) 12% of net sales
CSIRO v. Cisco E.D. Tex. (2014) Up to $1.90 per unit
Were such royalties to be calculated by global courts in a similarly uncoordinated, bottom-up
139
140
141
Innovatio, MDL2303 *163
142
Apple Japan v. Samsung, IP High Court of Japan, 2014, 10043, 132
143
144

manner, the aggregate patent royalty on a Wi-Fi router could easily surpass the product’s retail price
by at least an order of magnitude.145 This is a prime example of how the bottom-up approach leads to
royalty stacking.146 Further, the profits from implementing the alternative technology is not readily
observable, recalling the analysis of G-P Factor 2 and 9. Unless the essentiality is defeated after a
lengthy process, SEPs in complex standards like 802.11 are unlikely to have a functionally identical
alternative147, rendering bottom-up solution less practical.
Though top-down approach can mitigate some of the bottom-up concerns, systematically
dependable methods of determining the aggregate royalty burden on a particular standard have yet to
be developed.148 Like comparable license methodology, a principal reason is the lack of transparency
in FRAND transactions, compelling the court to adopt less trustworthy information.149 Data for a
sufficiently precise top-down calculation could only be gathered at a prohibitive cost in resources and
time. 150 The maximum cumulative royalties historically chosen or proposed have been selected
largely out of thin air, with little or no compelling economic justification.151
In Innovatio, the US court started with the average price of a Wi-Fi chip, followed by calculating
the profit of the chip to determine the income available with which the chipmaker can pay SEP
royalties.152 A separate expert witness in the Innovatio case warned that widespread infringement may
allow manufacturers to set such low prices that SEP-holders’ recovery for damages is severely
limited.153 In TCL v. Ericsson, the court relied on Ericsson’s former public pronouncements on its own
subjective estimations of the aggregate rate. 154

Such pronouncement, made ahead of the
commercialization of a standard and before its value can be inferred from consumers’ willingness to
pay, can hardly establish a tenable pillar for FRAND estimation, as recognized by Birss J. in Unwired
Planet.155 Briss J. also cited a combination of eight different press releases and public statements by
145
146
147
148
149
150
Kelce Wilson, les Nouvelles. 2018, 202(203)
151
David J. Teece, Criterion J on Innovation. 2020, 157(163)
152
153
154
TCL v. Ericsson, No. SACV 14-341 JVS(DFMx) 20-26
155
Unwired Planet v. Huawei (2017) EWHC 711 (Pat) ¶269-272

industry participants to determine the aggregate royalty for ETSI’s 3G and 4G standards.156 However,
due to the limited probative strength of the evidences, Briss J. solely used the top-down rate as a cross-
check against the one calculated from comparable licenses.157
Another unjustified practice is the misuse of apportionment according to numerical proportionality.
In TCL v. Ericsson, Judge Selna bypassed the task of precisely calculating a relative value of claimant’s
SEPs through simplistic patent-counting.158 Likewise, as noted, the Japanese court picked analogous
scheme in Samsung v. Apple Japan. Arguably, the apportionment should rest on an objective and
integrative rating of the SEPs in a standard. Arbitrarily basing damages on headcount waters down the
contribution of technically crucial patents, leading to incomplete compensation for the SEP holders.159
Arbitrary apportionment systems are unsound without economic reasoning. 160 A judicial uniform
valuation for every SEP without essentiality assessment nurtures SSO members’ routine to make
speculative and commission-free over-declarations.161 The apportionment may exacerbate the risks of
skewing judicial analysis and inflating the value of patents which are not authentically essential, as
noted earlier.
4. Transnational Intervention: Adjudication of global FRAND royalty
The above exposed hassles of judicial approaches to FRAND royalty are far from the only knot to
be disentangled. National courts have begun to use disputes over domestic SEPs as autocratic vehicles
for shaping the global business arrangements of private parties, as is the case in Unwired Planet.162
Although national courts rationalized their transnational interventions based on multi-dimensional
justifications, the highlighted truth herein is the national courts are incapable of precisely computing a
FRAND royalty via those deficient methods. Thus, more severe complications arise from global SEP
enforcement.
156
157
158
TCL v. Ericsson, No. SACV 14-341 JVS(DFMx) 26
159
160
Thomas F. Cotter, Tex Intell Prop LJ. 2018, 159(197)
161
David J. Teece, Criterion J on Innovation. 2020, 157(171)
162
Jorge L. Contreras, BU J Sci & Tech L. 2019, 251

In Unwired Planet, the plaintiff petitioned that the court should mandate a global FRAND license
between the parties, and if Huawei failed performance, issue an injunction against Huawei’s sale of
infringing products in the UK.163 Birss J. responded favorably that the ETSI standards in question are
intended for use worldwide; and the comparable licenses introduced at trial were also granted on a
worldwide basis, whereby only a global license is FRAND.164 Briss J overrode his former ruling in
Vringo v. ZTE where the request for global license terms was denied by himself.165 The Court of
Appeal in favor of Briss J. reasoned that licensing negotiation per country is inefficient; it may be
prohibitively expensive in case of global litigations; and also, FRAND commitment must have an
international effect.166 Huawei criticized the ruling on the ground that Birss J. sought to usurp alien
court’s authority of settling FRAND disputes, but eventually, was rejected by court’s stance that
disobedience of the ruling would only lead to an internal injunction on Huawei’s products in the UK,
rather than external jurisdiction.167
In TCL v. Ericsson, TCL voluntarily negotiated with Ericsson for a global portfolio license, unlike
Unwired Planet.168 The TCL court took as a starting point the need to calculate a global FRAND
royalty and was particularly sensitive to regional variations in patent value.169 Judge Selna made the
practical observation that courts are not equipped to “resolve disputes involving the technical nuances
of patent law in dozens of jurisdictions.” Ultimately, Judge Selna prudently considered extensive expert
testimony and adjusted the FRAND royalty per region (including US, Europe, China) per standard
according to Ericsson’s portfolio strength.170 Global rate was also determined by the US court, but
this global adjudication is attentive and tailormade to national variations in SEP strength and
coverage.171
While both courts relied on comparable license methodology, the Unwired Planet court arrived at
163
164
165
166
167
Unwired Planet II [2018] EWCA Civ 2344 ¶81
168
TCL v. Ericsson, No. 8:14-cv-00341 (C.D. Cal., 2017)
169
TCL v. Ericsson, No. 8:14-cv-00341 *44-46
170
TCL v. Ericsson, No. 8:14-cv-00341 *45
171
Jorge L. Contreras, BU J Sci & Tech L. 2019, 251(264)

a global rate (0.8 percent for a “major market”) for Ericsson’s LTE portfolio that is almost twice greater
than the TCL court’s counterpart (0.45 percent).172 As such, the two adjudicated rates, that are to be
applied globally to the license terms of Ericsson’s LTE patent portfolio, are misaligned. The TCL
decision discussed a 2015 Ericsson license with Apple, which was not considered by Unwired Planet
court.173 Further, both courts had to unpack the license at a sophisticated level to derive a one-way
rate, since most of the license agreements involving Ericsson were cross-licenses, which means the
payments are net of any cross-licensing value the paying party receives.174 In both cases, Ericsson’s
one-way rates were unpacked using various measures of the relative SEP portfolio strengths of the
parties to the respective licenses.175 Although both decisions redacted many of the details, the two
analysis likely differed in the operation of unpacking.176 Because the TCL court considered the sales
forecast estimates from Ericsson’s internal projections whereas the Unwired Planet court did not.177
However, it is unclear which of the two inconsistent global rates shall prevail so that they will not
intrude the “non-discriminatory” constraint or unfairly impact the market participants outside the
disputes.
Following the global harmonization by the UK and US judiciaries of FRAND royalty, Conversant,
a patent assertion entity which claims to own SEPs essential to ETSI standards in 40 countries,
requested the English court to declare FRAND its global license offers to Huawei and ZTE.178 In
reaction, Huawei brought action in China requesting declarations of non-infringement for Conversant’s
three SEPs and if it did infringe, adjudication of FRAND royalty for only Chinese SEPs.179 In Xiaomi
v. Interdigital in China, Xiaomi sued Interdigital before the Wuhan Court by following the footstep of
requesting global FRAND terms.180
The harmonizing effects of the adjudicated multinational FRAND royalty are far-reaching for
172
Unwired Planet v. Huawei (2017) EWHC 711 (Pat); TCL v. Ericsson, No. SACV 14-341 JVS(DFMx)
173
TCL v. Ericsson, No. SACV 14-341 JVS(DFMx)
174
Fei Deng, et al., ANTITRUST. 2018, 47(49)
175
176
177
TCL v. Ericsson, No. SACV 14-341 JVS(DFMx)
178
Huawei Techs. Co. v. Conversant Wireless Licensing, S.A.R.L. [2019] EWCA Civ 38
179
Huawei v. Conversant (华为技术有限公司与康文森无线许可有限公司确认不侵害专利权纠纷案) 2019 Zui Gao Fa Zhi Min Zhong
No. 732, 733, 734 (Sup. People’s Ct. Aug. 28, 2020)
180
Xiaomi v. Interdigital (小米行为保全申请民事裁定书), [Decision on Xiaomi’s Application for Behavior Preservation] E 01
Zhi Min Chu 169 (I) (Wuhan Interm People’s Ct. 2020)

future strategy of FRAND negotiations around the world. Forum shopping is likely to be inflamed
upon globalizing a national ruling. The courts’ tendency to determine high global FRAND rates or
otherwise to favor the positions of NPEs characterizes the national courts as an attractive litigation
venue for SEP owners upon struggling to conclude license.181 By the same token, jurisdictions that
establish reputations for setting low global FRAND rates, or which are otherwise hostile to patentees’
claims, may entice manufacturers to challenge the offered rates.182 Apparently, the Unwired Planet
court is partial to the SEP holder for being driven by the desire to curb holdout irrespective of the
previous ruling or the defendant’s plea.183 Thus, a party is likely to initiate litigation, as promptly as
possible, in the most favorable jurisdiction to foreclose a later suit in a less favorable one, which is
termed as “race to the courthouse”.184
Meanwhile, those post-Unwired Planet SEP litigations also signal that the extraterritorial decision
risks triggering a rivalry amongst nations for international judicial ambit. The competing national
courts may attempt to divest foreign authorities of FRAND judgement, likely touting that their legal
frameworks are superior in terms of fairness, efficiency or competency.185 This distorts the processes
and edifications of judicial and administrative rulemaking—substituting national desires to attract
business for just and evenhanded application of the law.186 When jurisdictions deliberately adapt their
rules and procedures, justice of legal system is progressively diluted and deteriorated in an effort to
artificially shape the “impartial image” of attracting litigation. 187 The Unwired Planet court best
illustrates such effort in its conspicuous reversal of Vringo v. ZTE in an opportune fashion.
II. Reflections & Proposals: Settlements on FRAND disputes
The second section reflects on the complications with global SEP enforcement by answering
whether the court is eligible as an instrument for FRAND negotiation, whether the above judicial
approaches to FRAND royalty are adversely influential, whether the court should act as a regulatory
181
182
183
Roya Ghafele, UCLA JL & Tech. 2020, i(3)
184
Peter E. Herzog, Am J Comp L. 1995, 379
185
Theodore Eisenberg & Geoffrey P. Miller, Cardozo L Rev. 2009, 1475(1480)
186
187

agency for telecom market, and subsequently, whether there is better solution to FRAND royalty
adjudication.
1. Reflections: Court of Justice as the instrument for FRAND royalty settlement
In decades’ telecom combat, the courts are deployed by the stakeholders as an instrument for
royalty settlement, like Microsoft v. Motorola. Carlton and Shampine observe that “the licensee has
the option and a strong incentive to go to court rather than accept unreasonable terms . . . if the cost
of litigation is small relative to the overall value to be paid under the license.”188
Given the arduous process of setting FRAND royalty, and given the insufficient information that
was available to the courts, it is difficult to criticize the courts’ efforts.189 Unfortunately, there is a risk
that the provisions of SEP licenses could be regulated more by judicial branches than by negotiation
in competitive market.190 In Huawei v. ZTE, CJEU’s limited guidance on FRAND royalty threshold is
thus comprehensible with the controversy whether the onus of defining FRAND should fall on the
court. Foremost, SSO policies, intended for incentivizing competition and negotiation, do not
contemplate that courts engage in tuning FRAND terms.191
In FTC v. Qualcomm, the US court established a permanent injunction that Qualcomm should
submit, as necessary, to arbitral or judicial resolution of FRAND terms.192 In pursuit of “regulatory
decrees”, the courts seeks to supplant the function of SSOs and market negotiation of SEP licenses,
and become regulators of the telecom market.193 Nevertheless, SSOs and market participants typically
have more expertise and precise information than courts about technology and market conditions.194
Thus, it is ill-advised for the courts to function as regulatory agencies for telecom IP market by
extending the regulatory control beyond coordinated SSO FRAND commitments and negotiated
FRAND agreements,195 let alone beyond national frontier. Courts risk applying judicial regulation that
188
Stanley M. Besen, Chicago-Kent J. Intell Prop. 2016, 19(43)
189
Stanley M. Besen, Chicago-Kent J. Intell Prop. 2016, 19(43)
190
Daniel F. Spulber, Colo Tech LJ. 2020, 79
191
192
Federal Trade Comm’n v. Qualcomm Inc., 411 F. Supp. 3d 658 (N.D. Cal. 2019)
193
194
195
Daniel F. Spulber, Colo Tech LJ. 2020, 79

would diminish the benefits of standardization, and induce inefficiency of the IP market.196 Hence,
the courts should further avoid regulatory approaches that would spread the application of their
decisions to industry participants external to particular SEP disputes,197 or even to global jurisdictions.
It remains highly ambiguous as to whether the Unwired Planet global rate should be also legally
binding for the other extraneous implementers than Huawei, of the same SEP portfolio involved in the
adjudication. If affirmative, a chaos would be incited throughout the global market in telecom sector,
as the bilaterally negotiated FRAND royalty must be uniformly redefined as Unwired-Planet-
compliant irrespective of the ex-ante existence of enforceable contracts.
Meantime, putting aside the inherent defects, adverse consequences could also arise from those
calculation approaches. In particular, the courts should evade using the top-down aggregate price caps
and bottom-up (or G-P framework’s) incremental contributions to impose one-size-fits-all regulatory
formulas.198
Again, adjudication of royalty caps will indirectly characterize the courts as market regulatory
divisions, which would overstep the judicial authority of settling the SEP disputes at hand. 199
Implementers may interpret the court-imposed aggregates as the compulsory constraints on royalty of
a standard, which will restrict future FRAND negotiations over the use of SEPs not involved in the
settled disputes.200
Courts reliant on bottom-up approach seek to remove the effects of standardization from the
market value of SEPs, but the result is more likely to remove the value that SEPs add to the
standardized technology.201 This would eclipse the equilibrium between the interests of SEP holders
and implementers sought by SSO FRAND policies.202 Because the courts overlooked that the total
incremental contributions of individual SEPs are greater than the total contributions of the standard if
the SEPs are “innovative complements” in a standard. 203 Vice versa, the total incremental
196
197
198
199
200
201
202
203
Daniel F. Spulber, Res. Econ. 2016, 693(694)

contributions of individual SEPs are less than the total contributions of the standard if the SEPs are
“innovative substitutes”.204
Undoubtedly, FRAND determinations are lengthy, costly, and cumbersome for courts due to the
incredible amount of resources the courts must invoke.205 It is too idealistic for courts to be swamped
with pleadings for FRAND royalty, either sincerely or as a negotiation instrument.206 For illustrative
purposes, Judge Robart’s calculation spanned 208 pages and Judge Holderman’s calculation, which
simplified Judge Robart’s method, was still 89 pages.207 The arduous procedure does not appear to
yield a superior judicial efficiency or shrink the transaction costs compared to bilateral negotiations.
The race to the courthouse, as mentioned, will not mitigate the courts’ burden of processing the
overwhelming pleas for royalty calculation.
2. Proposal: “Informed contract” framework
In practice, almost all patent license agreements form through market negotiation, except for
licenses offered by patent pools. 208 CJEU propels the parties to observe good-faith negotiation
etiquette instead of relying on judicial procedures. However, litigation is still indispensable in case of
a standoff during negotiation. Inasmuch as the analyzed complications exist, the judicial approaches
to FRAND royalty calculation require upgrading by finer calibrations.
Daniel F. Spulber proposes an “informed contract” framework to improve estimation of SEP
damages by means of the ex-post evidence and information, including patent validity, technology
standards, market outcomes, patentee’s lost profits, and the extent of the infringement, as revealed
from a patent case, like SEP litigation or infringing activities.209 By the time of the patent case, the
actions of the infringer and the SEP owner have filled in much of the “informed contract” for the court
to discover and interpret a range of elements of such contract in the course of resolving SEP disputes.210
The G-P factors can be adapted in the context of an “informed contract” so that the flaws of a
204
Daniel F. Spulber, Res. Econ. 2016, 693
205
206
207
Microsoft v. Motorola, No. C10-cv-1823JLR; Innovatio, MDL2303
208
Daniel F. Spulber, Minn JL Sci & Tech. 2020, 83(86)
209
210

hypothetical negotiation are remedied.211 For instance, an informed licensing contract of SEP may
encompass at least the provisions in Table 2 below.
Table 2 Exemplary formulation of an “informed contract” for SEP license212
Terms of the licensing contract Specific definitions
The patent case discloses the date that infringement

Start date, and duration of the began, which is the start date of the forgone contract.
agreement The same applies to the duration of contract, i.e., the
duration of infringement (G-P Factor 7).
Litigants and the courts devote efforts to selecting what

SEPs and what claims of SEPs can be validly invoked in
Definition of the IP the patent case. The efforts may refer to claim
construction by court, and adjudication of nullity
proceedings. Thereby, the IP rights at issue are
pinpointed.
The infringer’s exploitations, including manufacturing,

Grant of rights using, selling, importing of SEP-based products or the
(IP limits, field of use, territory, SEP processes, determine the scope of the license. In
degree of exclusivity) FRAND context, the “informed contract” must be non-
exclusive. The infringer’s business activities determine
various restrictions in the contract, such as the industry
and territory in which the implementer operates (G-P
Factor 3).
Firstly, royalty base is selected from comparable

licenses or estimated market value of SEP (G-P Factors
1-2). Secondly, the economic parameters, such as the
Compensation number of units sold, prices received, sales revenues,
costs, and profits, from an infringer’s business
operations constitute the basis for refining other aspects
of royalty payments (G-P Factors 11-13). Thus, the
final estimates take into consideration the informative
and comprehensive facts to approximate “FRAND.”
Based on Table 2, it follows that the “informed contract” framework is thoroughly evidence-
oriented. Using the information obtained from the patent case, like the infringer’s actual profits, vastly
improves the estimate of damages, as it accounts for the economic effects of infringement.213 When
the patent holder’s lost profits and opportunity costs from technology transfer are not available, the
profits of the infringer and other events during the period of infringement offer a good foundation for
211
212
Daniel F. Spulber, U Ill L Rev. 2019, 615(653-655)
213

calculating damages, in contrast to the court’s unrealistic conjectures on the expectations of the two
parties.214 Market conditions, such as the market prices of products, never lie, but the hypothetical
negotiation probably does. Ruling out the philosophical problem of the hypothetical negotiation, the
“informed contract” simplifies damage estimation by submitting it to economic analysis.215
As already noted, EMVR restricts the application of final price of an infringing product to FRAND
royalty calculation.216 If a market exists for a la carte components containing the patented inventions,
the respective market prices are probative.217 Otherwise, SSPPU royalty base would not accurately
reflect a patent’s contribution to the market value of a product, thus deriving inadequate compensation
for damages. 218 In reality, for many comparable FRAND contracts, and patent pools, however,
royalties or royalty rates are based on final product sales.219 In case of identifying comparable licenses
with similar provisions, certain adjustments suggested by the “informed contract” can apply to the
comparable royalty bases.220 Else, the market price of SEPs, such as the transactions costs of patent
transfer, could also be referenced.221
The “informed contract” framework is favorable to judicial determination of FRAND royalty as
it not only blends in the noted merits of court-endorsed comparable license methodology but also
remedies its deficiencies. It is flexibly compatible with a majority of G-P factors, and comparable
licenses. The “informed contract” streamlines the tribunal adjudication by eliminating undue
assumption of FRAND commitment, and making it utterly evidence-based and conform to the
economics without substantial intervention on the competitive SEP market. “Informed contract” can
mitigate the legal uncertainties from top-down royalty capping, apportionment, and incremental value
estimation. The reality-driven framework respects the realized economy and market on which the
infringer already imposed effects.
214
215
216
Zelin Yang, Berkeley Tech LJ. 2014, 647(654)
217
218
219
Erik Hovenkamp & Herbert J. Hovenkamp, Penn Carey Law. 2017, 1(2)
220
221

D. Anti-suit injunction: extraterritorial approach to SEP parallel litigations
Following the Unwired Planet transnational intrusion, national courts became keener on autocratic
expedience to expand their jurisdictional impact worldwide. Namely, an accompanying extraterritorial
practice that emerged in global parallel FRAND litigations, as early as in Microsoft v. Motorola, is the
issuance of ASI. ASI is an interlocutory remedy in one jurisdiction, which prohibits a party from
litigation in foreign jurisdictions. 222 Foreign courts may accordingly retaliate by granting a
counteractive anti-ASI (AASI) prohibiting the party from applying for or enforcing an ASI. 223
Admittedly, ASIs contain litigation costs and reduce the likelihood of inconsistent results by ensuring
FRAND disputes are resolved in one jurisdiction before they are litigated elsewhere. 224 The
inconsistency concern is thus the court’s vital justification for such transnational interference.
I do not deny the purported upsides of the cross-border injunction. As a double-edged sword,
however, ASI globally spurred jurisdictional chaos, as seen below. In this chapter, I contend that the
domestic tribunals, ignorant of foreign legislation and economy, should not avail ASIs to facilitate the
ex-parte regulation of a uniform global FRAND rate at the expense of intruding TRIPS Agreement
and human rights. Next, the complications with ASI will be firstly set forth upon review of the recent
ASI cases.
I. ASI in international parallel FRAND litigations
In telecom combat, the extraterritoriality sprouted since the issuance of ASI in Microsoft, and
soared after the global royalty adjudication in Unwired Planet. The ping-pong-like reciprocation by
AASI and AAAASI across continent has dramatically put on a “farce in the global IP arena.” Table 3
below summarizes the occurrence of ASIs in major global SEP litigations since 2012.
Table 3 ASIs in Major SEP Litigations 2012-2021225
Case Year 1st Juris. Foreign Juris. ASI Granted AASI Issued
222
Raghavendra R. Murthy, Vand L Rev. 2022, 1609(1622)
223
Jorge L. Contreras, IP Litigator. 2020, 1
224
Jorge L. Contreras, Cambridge Handbook of Technical Standardization Law, 451
225
Peter K. Yu, et al., Am U L Rev. 2022, 1537(1588)

Microsoft v. Motorola 2012 US DE Yes N/A
Vringo v. ZTE 2015 US CN No N/A
TCL v. Ericsson 2015 US FR,BR,RU,UK,DE,AR Yes N/A
Apple v. Qualcomm 2017 US UK, JP, CN, TW No N/A
Conversant v. Huawei & ZTE 2018 UK CN Yes N/A
Optis v. Huawei 2018 US CN No N/A
Huawei v. Samsung 2018 US CN Yes N/A
Continental v. Avanci 2019 US DE N/A DE
IPCom v. Lenovo 2019 US UK, FR N/A UK, FR
Conversant v. Huawei 2020 CN DE Yes N/A
Interdigital v. Xiaomi 2020 CN IN, DE Yes IN, DE
Oppo v. Sharp 2020 CN JP, DE, TW Yes DE
Ericsson v. Samsung 2020 CN US Yes US
IPBridge v. Huawei 2021 CN DE N/A DE
Philips, GE, Mitsubishi v. Xiaomi 2021 CN DE N/A DE
Ericsson v. Apple 2021 US NL N/A No
Next, the issuance of ASIs in the US, Europe and China will be discussed by studying the selected
parallel SEP litigations from Table 3.
1. The United States
The US court is the initiator of granting ASI in FRAND disputes, mostly relying on liberal
approach. Thus, the analysis starts with the existing criteria set out by the US for granting ASI,
followed by an overview of ASI cases in the US.
a. Procedural requirements for issuance of ASI
Depending on the US circuits, three approaches, commonly referred to as the liberal, the
conservative, the middle-ground approach, are adopted to decide granting an ASI or not.226 All begin
with two common criteria: (a) whether the parties are the same; and (b) whether a resolution of the US
action is dispositive of the foreign action.227 Next, the approaches diverge in the criteria to be satisfied
as to whether a non-US proceeding (1) frustrates a US policy; (2) is vexatious; (3) threatens the ASI
issuing court’s in rem or quasi in rem jurisdiction; (4) whether the proceedings prejudice other
equitable considerations;228 and (5) would result in delay, inconvenience, expense, inconsistency, or a
race to judgment.229
226
227
China Trade & Dev. Corp. v. M.V. Choong Yong, 837 F.2d 33, 35(2d Cir. 1987)
228
In re Unterweser Reederei GmbH, 428 F.2d 888, 890(5th Cir. 1970)
229
China Trade, 837 F.2d 33, 35

Liberal approach permits granting ASI if any one of Unterweser factors (1)-(4) is satisfied.230
Circuits using conservative approach emphasize that “comity dictates that foreign anti-suit injunctions
be issued sparingly and only in the rarest of cases”, and thus exclusively examine (1) and (3).231 The
middle-ground approach acknowledges a rebuttable presumption against issuing ASI due to comity,
that can be rebutted by weighing (1)-(5) against the conflicting comity concerns.232 Finally, under all
the three tests, if all the factors favor issuance of ASI, the court may consider whether comity violation
is tolerable.233
b. ASI in the US FRAND litigations
The first ASI in FRAND litigations was issued by the US district court in Microsoft v. Motorola.
This ASI prohibited Motorola from enforcing the German injunction in which the Mannheim Court
enjoined Microsoft from selling the infringing products in Germany.234 Applying the liberal approach,
the court determined that the threshold criteria (a), (b) and at least the factors (2) and (5) favored
granting the ASI.235 Further, the court found comity intrusion tolerable as the ASI only intended to
suspend the enforcement of German judgement rather than interfere with the proceedings of German
court.236 The Ninth Circuit also affirmed the district court’s discretion of issuing such ASI by alleging
that Motorola’s contractual commitment is incompatible with seeking injunction banning sales
abroad.237
In TCL v. Ericsson, the district court in California approved of TCL’s request for ASI based on the
liberal approach, noting that “bilateral preliminary anti-suit injunction is warranted based on the
parties’ mutual agreement.”238 The court acknowledged that the parties were the same in both the
California breach-of-contract action and the foreign actions, and that the parties both indicated the
anticipation that the US action should be dispositive of a global resolution of the SEP licensing and
230
Unterweser, 428 F.2d 888, 890
231
Goss Int’l Corp. v. Man Roland Druckmaschinen Aktiengesellschaft, 491 F.3d 355, 359(8th Cir. 2007)
232
Quaak v. Klynveld Peat Marwick Goerdeler Bedrijfsrevisoren, 361 F3d 11, 18(1st Cir. 2004)
233
E.&J. Gallo Winery v. Andina Licores S.A., 446 F.3d 984, 991(9th Cir. 2006)
234
Microsoft v. Motorola, 696 F.3d 872, 884(9th Cir. 2012)
235
Microsoft v. Motorola, 696 F.3d 872, 1093
236
237
238
ORDER re Motions, TCL v. Ericsson, 11(C.D. Cal. 2015)

damages claims.239
In Apple v. Qualcomm, the court rejected Qualcomm’s request for ASI banning Apple from pursuit
of alien lawsuits, since they involved different subjects of Apple’s challenges, i.e., validity and
exhaustion of Qualcomm’s foreign patents and antitrust implications from Qualcomm’s licensing
practices, unlike the breach of contractual obligation in Microsoft v. Motorola. 240 Thus, US
proceedings setting a worldwide FRAND rate will not be dispositive of the oversea counterclaim or
antitrust actions brought by Apple, which, as the implementer, is not the obligor of FRAND
commitment to the SEPs at disputes.241
In Huawei v. Samsung, following the Microsoft analysis, the court granted ASI to enjoin Huawei
from enforcing the Chinese injunction against Samsung.242 The court held that its adjudication of the
global FRAND disputes would dispose of Chinese action, and there was frustration with the forum’s
policy, as chances are that inconsistent judgments could occur if the ASI was not granted.243 The court
regarded the ASI’s impact on comity as negligible, since the Chinese injunction was just temporarily
restrained by the ASI, while it remained possible for Huawei to seek damages.244
It can be concluded that regarding ASI in the US: (i) the liberal test might be adopted if there is a
jurisdictional conflict between a US suit on a global FRAND license and a foreign patent infringement
suit; (ii) if the US suit involves global FRAND license and a foreign suit involves patent invalidity or
antitrust action lodged by the implementer, the US courts will be reluctant to grant an ASI.245
2. Europe
European judicatures maintain averse to ASI regime intervening foreign proceedings but struggle
to safeguard their own jurisdictions against foreign ASIs by iteratively granting AASI and AAAASI.246
239
ORDER re Motions, TCL v. Ericsson, 11
240
Apple v. Qualcomm, No. 3:17-cv-00108-GPC-MDD, 17-18 (S.D. Cal. 2017)
241
Apple v. Qualcomm, No. 3:17-cv-00108-GPC-MDD, 19
242
Order Granting Samsung’s Motion for Antisuit Injunction, 1, Huawei v. Samsung, No 3:16-cv-02787-WHO (N.D.
Cal. 2018)
243
Order Granting Samsung’s Motion for Antisuit Injunction, 3-5, Huawei v. Samsung
244
Order Granting Samsung’s Motion for Antisuit Injunction, 20, Huawei v. Samsung
245
King Fung Tsang & Jyh-An Lee, Mich Tech L Rev. 2022, 305(337)
246
Jorge L. Contreras, NYU JIPEL. 2020, 171(179)

The UK and French courts in the respective IPCom v. Lenovo cases issued AASIs barring Lenovo
from seeking an ASI from a US court.247 The UK court noted that it would be vexatious and oppressive
to IPCom had it been deprived entirely of its right to litigate infringement and validity of its SEPs.248
The Court of Paris held that the US ASI would infringe on IPCom’s fundamental rights, such as the
rights to property (Art. 17 Charter), and to a fair trial (Art. 6(1) ECHR).249 In Nokia v. Continental in
Germany, the Regional Court (RC) Munich issued AASI and reasoned that the ASI sought for from
the US court by Continental is an unlawful interference with a Nokia’s IP rights.250 RC Munich views
AASI as the only defensive measure available against a foreign ASI, and a lawful exercise of the right
to self-defense.251
The German opposition to foreign ASIs was reinforced by the proactive order of AAAASI in
Interdigital v. Xiaomi, a case that corresponds with the worldwide ASI issued by the Wuhan Court in
Xiaomi, with the aim to preempt that a foreign court may issue an AAASI that prohibits SEP owner
from enforcing AASI.252 This should be a powerful deterrent against ASIs directed at German suits.253
In tune with French practice, German judiciaries have endeavored to dodge and rein in extraterritorial
interruption on domestic proceedings. The FRAND ping-pong ball was eventually rebounded to the
court of China.254
3. China
Amid this international jockeying that frequently targets China as the battlefield, China is activated
as another major jurisdiction banking on ASI with at least 4 issuances in 2020 alone (see Table 3).255
The President of the Beijing IP Court advanced a series of proposals to strengthen China’s judicial
procedures, including the expansion of the “behavior preservation” measure with ASI-like regime
247
IPCom v. Lenovo [2019] EWHC 3030 (Pat); IPCom v. Lenovo, Court of Appeal of Paris, RG 19/21426 (3 March
2020).
248
IPCom v. Lenovo [2019] EWHC 3030 (Pat) ¶52
249
IPCom v. Lenovo, RG 19/21426 ¶4
250
OLG München Urt. v. 12.12.2019 - 6 U 5042/19
251
OLG München Urt. v. 12.12.2019 - 6 U 5042/19
252
Xiaomi v. Interdigital, E 01 Zhi Min Chu No. 431 (Wuhan Interm. People’s Ct. Sep. 23, 2020) (China)
253
254
255
Yu Yang & Jorge L. Contreras, Patently-O. 2020, No. 403, 1

under Chinese Civil Procedure Law.256 Despite the hostility of countermeasures by foreign courts,
China has been more aggressive than the US in issuing ASIs.257
In Huawei v. Conversant, SPC laid down the following factors for granting ASI, which resemble
Microsoft: (i) the effect of enforcing the foreign ruling on Chinese litigation; (ii) necessity of taking
behavior preservation measures; (iii) the reasonable balance of the interests of the applicant and the
respondent; (iv) whether the behavior preservation measures harm the public interest; and (v)
compliance with international comity.258
Accordingly, SPC held that Conversant’s enforcement of the German injunction would interfere
with the Chinese action, because Huawei would risk either withdrawing from the German market or
accepting the license offered by Conversant in Germany, which offer claimed a global royalty more
than 18 times higher than the rate set by the Nanjing court.259 SPC also found that the issuance of ASI
would not materially prejudice Conversant’s rights in Germany with respect to any merits decision of
the German court, and the ASI would not harm the public interest or disobey international comity.260
Upon entry of the ASI, the SPC adjudicated a penalty of one million RMB (above US $140,000) per
day for any violation by Conversant.261
In the final dramatic Chinese ASI case of 2020, a gripping race to the courthouse—Samsung v.
Ericsson, Samsung requested ASI, on December 14, to enjoin Ericsson from seeking injunctive relief
in the US or elsewhere pending the Wuhan action.262 The Wuhan court expeditiously issued an order
on December 25 that included an ASI of global scope along with an AAASI, the latter prohibiting
Ericsson from taking actions to negate the ASI while imposing a penalty of one million RMB per day
in case of Ericsson’s rebellion.263 Procedurally, the ASIs issued by the Chinese courts were generally
made on an ex-parte basis.264 In the judgment, the court simply justified the AAASI by claiming that
256
257
258
Huawei v. Conversant 2019 Zui Gao Fa Zhi Min Zhong No. 732, 733, 734
259
Huawei v. Conversant, 2019 Zui Gao Fa Zhi Min Zhong No. 732, 733, 734
260
261
262 Samsung v. Ericsson (三星电子株式会社与爱立信公司标准必要专利许可费纠纷案) E 01 Zhi Min Chu No. 743 (Wuhan Interm.
People’s Ct. Dec. 25, 2020)

263
Samsung v. Ericsson, E 01 Zhi Min Chu No. 743
264

an AASI issued by a foreign court would interfere with the Chinese proceedings, but without
addressing the potential added damage to comity by the AAASI.265 On December 28, the US court
granted Ericsson’s request for temporary restraining order (effectively, AASI) against Samsung’s
enforcement of the Chinese ASI.266 In addition, the US court’s AASI required Samsung to indemnify
Ericsson against any penalties levied on Ericsson for breach of the Chinese ASI.267 Few months later,
the two parties ended up with reconciliation on FRAND rate.
Samsung v. Ericsson represents an important variant in the evolution of global FRAND disputes.268
The parties, headquartered in Korea and Sweden, selected jurisdictions for SEP litigation by virtue of
procedural and substantive advantages, independent of any “home court advantage.” 269 The
remarkably rapid actions and counteractions in this case exemplify the worst features of the race to the
courthouse.270 For example, Chinese courts have earned a reputation for setting substantially lower
FRAND royalty rates than courts in other jurisdictions—a feature attractive to product manufacturers
but unattractive to SEP holders. 271 In contrast, the bifurcated German framework for patent cases
nearly automated the issuance of permanent injunctions after a finding of infringement and prior to
conclusion of patent validity, making Germany an attractive venue for SEP holders.272
II. Complications with ASI: Why courts should refrain from availing
extraterritoriality?
In the above US, Europe and China ASI cases, the ASIs were issued to avoid inconsistency with
foreign FRAND royalty adjudications. “Inconsistency” concern is not a legitimate or convincing
justification for offense to foreign autonomy, policy, and economy. Despite the established principles
for issuing ASI, the courts have not countered forum shopping and extraterritoriality disarray in those
265
Samsung v. Ericsson, E 01 Zhi Min Chu No. 743
266
Ericsson v. Samsung, No. 20-CV-00380 (E.D.Tex. 2021)
267
Ericsson v. Samsung, No. 20-CV-00380
268
269
270
271
Jyh-An Lee, Vand J Ent & Tech L. 2016, 37(78)
272
Thomas F. Cotter, Comparative Patent Remedies: A Legal and Economic Analysis, 245-46

cases.
It is manifested that FRAND royalty disagreements are always the root cause for SEP
complications, which, with the invocation of ASIs, degenerate into inter-jurisdictional disorder. Even
if national tribunals may have the legal authority to regulate global FRAND rates as incidental to
contractual commitments (like in Unwired Planet), doing so may not only contradict the interests of
the parties or the market,273 but also incur global jurisprudential absurdity, and show disrespect of
TRIPS Agreement and ECHR.
Accordingly, this section argues that courts should refrain from availing extraterritoriality in light
of TRIPS Agreement and Art. 6(1) ECHR, to which the ASI-issuing courts have not earnestly given
priority. Finally, some proposals are presented for tackling the extraterritorial complications from the
ASI issuance and global royalty adjudication.
1. EU’s complaint at WTO of Chinese ASIs against TRIPS Agreement
The fermenting ASI interferences ultimately provoked EU’s complaint at the WTO, requesting
consultation with Chinese authority in respect of the issuance of ASIs and the failed transparency
obligation of making judicial ruling publicly available, which breach Arts. 1.1, 41.1, 44.1, and 63.1
TRIPS Agreement. 274 Emphatically, EU denounced Chinese courts of failure to enact safeguards
against the abuse of ASI under Art. 41.1 TRIPS.275 The EU criticism at WTO conveys its long-held
objection to ASI.
As noted above, in dismissing Huawei’s petition against global FRAND royalty, the Unwired
Planet court opined in a chop logic that its injunction was only specific to Huawei’s products in the
UK domestic market, and as such, the UK adjudicated royalty was not truly globally binding in the
sense that it is at Huawei’s discretion whether to abide. Accordingly, without disparate or non-
reciprocal standards than the UK, Chinese WTO delegates could lawfully invoke equating
justifications that punishments for breach of ASIs are exclusively enforced in China rather than
273
Jorge L. Contreras, NYU JIPEL. 2020, 171(182)
274
Request for Consultations by the European Union, 18.02.2022, 1
275
Request for Consultations by the European Union, 18.02.2022, 7

elsewhere, thus placing no restrictions on the SEP owner’s exertion of IP rights in alien jurisdictions,
compliant with Arts. 1.1, 41.1, 44.1 TRIPS.
However, the worldwide courts’ justifications for extraterritoriality consistently lack stringency in
view of the TRIPS obligations. Pursuant to Art. 41.1 TRIPS, members must ensure that their judicial
authorities are able to provide remedies for patent infringement and permit effective action such as
injunctive relief under Art. 44.1 TRIPS.276 For TRIPS remedies to be available, the courts must not be
bound by foreign ASI, which entails granting AASI. 277 The grant of ASI betrays a state’s TRIPS
commitment and tarnishes justice if court is willfully adjusting legislation with the desire to expand its
sovereignty. EU’s complaint is applicable to any country like America, which, by granting ASI in lax
approach, aims to deprive litigant of the legal protection under TRIPS Agreement.
2. Incompatibility of ASI with Art. 6(1) ECHR
As noted, in IPCom v. Lenovo, the French court declared inadmissible the US-granted ASI
violating IPCom’s right to fair trial under Art. 6(1) ECHR. It is thus worth probing into how the foreign
ASI could be governed by ECHR regime covering a broader territory than EU.
It was not until Strasbourg court’s ruling in Pellegrini v. Italy that Art. 6(1) ECHR extended to the
enforcement of a non-contracting state’s judgement. In Pellegrini v. Italy, the Italian court declared
enforceable the judgment by the ecclesiastical court in Vatican (Vatican did not ratify ECHR) annulling
the appellant—Mrs. Pellegrini’s marriage without informing her of the possibility of defense and the
assistance of a lawyer, etc., and consequently, Mrs. Pellegrini’s guarantees of fair hearing were
deprived. 278 Strasbourg court noted that the enforcement per se, of the judgment by foreign
jurisdiction was the infraction of Art. 6(1) ECHR committed by Italian court.279
If Pellegrini v. Italy is translated into the context of ASI from non-contracting state of ECHR,
theoretically, the ASI should be denied as it prohibits a litigant based in ECHR’ jurisdiction from
accessing the court for a fair trial. However, exceptions were set out in In Zone Brands International
276
Arts. 41.1 and 44.1 TRIPS
277
Felix K. Hess, J World Intell Prop. 2022, 536(548)
278
Pellegrini v. Italy, no.30882/96, ECHR 2001
279
Pellegrini v. Italy, no.30882/96, ECHR 2001

by Cour de cassation. 280 The dispute arose out of a contract between a French and an American
company, that included a choice-of-law clause providing that Georgian laws and the jurisdiction of
Georgian courts shall prevail.281 Thus, the court declared that the American ASIs are not contrary to
French policy, insofar as they only aim at enforcing a pre-existing contractual obligation, and no treaty
or European regulation applies.282 Briefly, the claims of the two parties fall outside the jurisdictional
boundary of France, as bilaterally agreed in their contract.
The above exceptions to Pellegrini v. Italy may be rarely applicable to the ASIs in the telecom
combat context. The reason is, SEP owners have mostly made FRAND commitment with global SSOs,
including the France-based ETSI. Article 12 of the ETSI IPR Policy provides that FRAND
commitment is governed by French legislation,283 and accordingly, European regulation. Further, if
the alleged SEP claims are valid within ECHR territory, the right holder is entitled to fair trial for SEP
infringement. Likewise, it also applies to the implementer filing antitrust complaints, if not recognized
as third-party beneficiary of FRAND commitment by European courts. Where the exceptions cannot
apply, the foreign ASIs in SEP disputes are incompatible with Strasbourg case laws, contravening Art.
6(1) ECHR. The proposition of ECHR conformity can articulate the French court’s backlash of the
external ASI through AASI in FRAND disputes.
III. Proposed countermeasures for the extraterritoriality disarray
China demonstrates that if one jurisdiction issues ASI, others are inspired to echo with a
comparable level of protection. 284 EU’s objection to Chinese ASI might be a trigger and kickoff
advocacy to annul the global ASI regime before WTO. As noted, extraterritorial complications arise
from FRAND royalty disagreements. As such, the most effective remedy for such jurisdictional
disharmony would be the enactment of a unitary, global SEP enforcement system dedicated to global
FRAND royalty settlement on a comprehensive basis.285
280
Beverage international SA v. In Zone Brands International Inc., no. 08-16.369, Cour de cassation 2009
281
In Zone Brands International, no. 08-16.369
282
In Zone Brands International, no. 08-16.369
283
ETSI, IPR Licensing Declaration forms, 48
284
285

As an example, a shift to a new horizon of patent system is underway in Europe, namely, the
unified patent court (UPC).286 UPC, with a new judicial execution framework, will enable centralized
mechanism for counterclaim and infringement proceedings for patents in member states, notably
unlike the conventional bifurcation system. 287 UPC may set a role model for future design of
international mechanism, though it seems to be only adequate to set a community-wide FRAND
royalty.
For a broader scope of territory, WIPO is likely equipped with the competence of setting global
FRAND royalty as its International Bureau has been doing pioneering work for global patent
application.288 In drawing up the IPRP for a PCT application, the bureau may have gathered some
preliminary information on validity and essentiality.289 This may facilitate the WIPO Arbitration and
Meditation center to implement its cost-efficient ADR (Alternative Dispute Resolution) for a global
FRAND royalty. Thus, SEP holder’s over-declaration and antitrust behaviors may be further restrained
on a global basis. Further, extraterritorial complications would unlikely occur when an international
body harmonizes the global FRAND terms. For the sake of supervising the unlawful extraterritorial
measures by WTO signatories, WIPO is supposed to take the lead to ease the international tension in
telecom combat.
In 2020, Shanghai court defused international IP disputes by ADR in coordination with WIPO.290
This receptivity and collaboration with WIPO indicate that China might be less concerned about
unfavorable arbitral awards by a neutral WIPO tribunal than by a foreign court, like the Unwired Planet
court, that issued decisions hostile toward Chinese implementers.291 This signals that WIPO ADR
option is a practicable strategy given the surged grant of ASIs in China, since it has found approval
and support in this country under the neutrality, clarity and transparency guaranteed by internationally
recognized WIPO.292
286
Anusha Pirani, Ct Uncourt. 2018, 5(7)
287
Anusha Pirani, Ct Uncourt. 2018, 5(6)
288
WIPO, PCT FAQs
289
Roya Ghafele, UCLA JL & Tech. 2020, i(20)
290
WIPO, Mediation for Intellectual Property and Technology Disputes Pending Before Courts in China
291
292

E. Conclusion
Complications with telecom-relevant SEPs come up in each of the phases from SSOs’
standardization procedure, and FRAND negotiation, until the judicial instruments in SEP suits. To
mitigate the legal uncertainty of interpreting FRAND, CJEU bans both patent holdup and holdout and
boosts bilateral negotiation for FRAND licensing terms. The Huawei v. ZTE protocol strikes a fair
balance between each party’s entitlements to secure a competitive telecom market.
In contrast, an array of approaches to FRAND royalty have been developed by the US courts, and
soon emulated by English and Asian courts. Herein, both the intrinsic defects and the resultant
ramifications of those judicial methods are analyzed with reference to disproportionate adjudications
in SEP cases e.g., in Microsoft v. Motorola, TCL v. Ericsson, etc. Specifically, the hypothetical
negotiation & G-P framework is antiquated in view of Huawei v. ZTE. The comparative analysis of
top-down vs. bottom-up approaches accounts for courts’ inadequate capacity of estimating an exact
royalty cap and fair apportionment, recalling the inconsistent rulings for 802.11 standard.
G-P factors are still a legally constructive prototype of later mutations for FRAND royalty
calculation. As an example, the proposed “informed contract” framework is a promising and judicious
solution, as it exploits the merits of the court-honored comparable license method and G-P factors
while offsetting the shortcomings therein. Emphatically, adjudication by “informed contract” will not
interfere with the fair competition in the telecom sector.
At any rate, with less expertise than market participants, court is not the optimal instrument for
FRAND negotiation. Court will instead act as a market regulatory agency to impede competition with
the chilling effects from, e.g., adjudicated royalty caps. Despite the Huawei’s justifiable plea, the
English court desperately overturned Vringo v. ZTE in a persistent effort to shape the worldwide
telecom market, only to derive a divergent global royalty from TCL v. Ericsson for the same SEP
portfolio. Complications like forum shopping and race to the courthouse thus globally burst, as initially
seen from Conversant v. Huawei and ZTE, and Xiaomi vs. Interdigital and ultimately, the ASI petitions
of parallel SEP disputes spreading in the US, Europe and China.

Herein, in resonance with EU’s opposition before WTO, it is argued that ASIs were dictatorially
granted through untenable justifications in breach of TRIPS Agreement. In Europe, ASI also blatantly
infringes Art. 6(1) ECHR as per Strasbourg case law Pellegrini v. Italy. At least those legal basis should
govern the issuance of ASIs to stifle the growth of extraterritoriality disarray.
Due to the global nature of telecom combat, an international, UPC-like mechanism may be
invented, or alternatively, the ADR procedure before WIPO is recommended as well. Nations and
multinational private enterprises are supposed to have sufficient and firm faith in WIPO. WIPO may
most likely preclude the ASI disorder, terminate the odyssey, and consolidate the neutrality of
construing what is “fair, reasonable, and non-discriminatory.”

Complications With Global SEP Enforcement

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Complications With Global SEP Enforcement

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Complications with Global SEP Enforcement:

Adjudicated FRAND Royalty and Extraterritorial

Berlin, January 31, 2023

Electronic copy available at: https://ssrn.com/abstract=4351940

Cody M. Akins, Overdeclaration of Standard-Essential Patents, Tex L Rev. 2020, 579-599

Daniel G. Swanson, William J. Baumol, Reasonable and Nondiscriminatory (RAND) Royalties,

Electronic copy available at: https://ssrn.com/abstract=4351940

Jorge L. Contreras, Fixing Frand: A Pseudo-Pool Approach to Standards-Based Patent Licensing,

J. Gregory Sidak, Is Patent Holdup a Hoax, Criterion J on Innovation. 2018, 401-554

Electronic copy available at: https://ssrn.com/abstract=4351940

Michelle Emeterio, Antitrust Deterrence of Patent Holdup: Refocusing on Competition as a Driver of

Raghavendra R. Murthy, Why Can’t We Be FRANDs?: Anti-Suit Injunctions, International Comity,

Electronic copy available at: https://ssrn.com/abstract=4351940

Jorge L. Contreras, Cambridge Handbook of Technical Standardization Law—Competition, Antitrust,

Oliver E. Williamson, The Economic Institutions of Capitalism: Firms, Markets, Relational

Yann Ménière, Fair, Reasonable and Non-Discriminatory (FRAND) Licensing Terms—Research

ANSI Essential Requirements 2022, https://www.ansi.org/american-national-standards/ans-

ETSI, IPR Licensing Declaration forms, https://www.etsi.org/images/files/ipr/etsi-ipr-policy.pdf

IEEE, Letter of Assurance for Essential Patent Claims,

Electronic copy available at: https://ssrn.com/abstract=4351940

Electronic copy available at: https://ssrn.com/abstract=4351940

Electronic copy available at: https://ssrn.com/abstract=4351940

Electronic copy available at: https://ssrn.com/abstract=4351940

B. Disputes over the global enforcement of SEP ................................................................................... 2

I. SEP proprietary in augmented monopolistic nature ....................................................................... 3

1. Essentiality of SEP ..................................................................................................................... 3

2. SEP holdup hypothesis ............................................................................................................... 4

3. Royalty stacking hypothesis ....................................................................................................... 5

II. Disputes over the enforcement mechanism of FRAND commitment ........................................... 6

1. The contractual essence of FRAND commitment ...................................................................... 6

2. Antitrust implications from FRAND commitment ..................................................................... 8

3. Patent holdout: Exception to FRAND defense ........................................................................... 9

C. Judicial harmonization on FRAND royalty .................................................................................... 10

I. Complications with judicial approaches to FRAND royalty ........................................................ 11

1. Hypothetical negotiation & Georgia-Pacific framework ......................................................... 11

b. Applicability of hypothetical negotiation to SEP infringement ............................... 12

c. Applicability of the Georgia-Pacific factors to SEP royalty disputes...................... 14

2. Comparable license methodology ............................................................................................ 17

a. Adoption by courts worldwide ................................................................................. 17

b. Merits of using comparable licenses ........................................................................ 18

c. Drawbacks of using comparable licenses ................................................................ 20

3. “Bottom-up” & “Top-down” methodologies ........................................................................... 21

4. Transnational Intervention: Adjudication of global FRAND royalty ...................................... 24

II. Reflections & Proposals: Settlements on FRAND disputes ........................................................ 27

2. Proposal: “Informed contract” framework ............................................................................... 30

Electronic copy available at: https://ssrn.com/abstract=4351940

I. ASI in international parallel FRAND litigations .......................................................................... 33

1. The United States...................................................................................................................... 34

a. Procedural requirements for issuance of ASI ........................................................... 34

b. ASI in the US FRAND litigations............................................................................ 35

1. EU’s complaint at WTO of Chinese ASIs against TRIPS Agreement ..................................... 40

2. Incompatibility of ASI with Art. 6(1) ECHR ........................................................................... 41

III. Proposed countermeasures for the extraterritoriality disarray ................................................... 42

Electronic copy available at: https://ssrn.com/abstract=4351940

inevitably triggered the implementers and SEP proprietors’ fallback to litigations.

debatable approaches to FRAND royalty calculation, e.g., Georgia-Pacific framework, top-down,

bottom-up, comparable license methodologies trigger the controversy as to whether court is an

adequate regulator of FRAND rate in the telecom market.

royalty is not precisely FRAND owing to the flawed calculation methods.

Electronic copy available at: https://ssrn.com/abstract=4351940

B. Disputes over the global enforcement of SEP

Electronic copy available at: https://ssrn.com/abstract=4351940

I. SEP proprietary in augmented monopolistic nature