AnJie Partner He Jing Comments on Determining FRAND Royalty Rates in SEP Licensing
AnJie partner He Jing participated in the Traditional Issues and New Challenges of Standard Essential Patent Symposium held in Beijing on May 15th. The Symposium invited experts from academia, administrative authorities, judicial authorities, industries, and legal professions, to discuss important theoretical issues of the standard essential patent. He Jing gave a speech about “Preconditions for China Antitrust Authorities and Judiciaries in Determining FRNAD Royalty Rates”. The factors the speech pointed to are as follows:
Interoperable technologies that derive value from worldwide SEPs portfolio give the courts of different jurisdictions rights to adjudicate FRAND royalty rates across international borders. Various countries have shown their interests in determining global FRAND royalty rates. He Jing said that “Countries need to follow the principle of international comity, carefully decide the jurisdiction, therefore, to avoid potential conflicts in inconsistent judgments.”
2. Confidentiality clauses in the license agreement
When calculating the effective royalty rates paid under “comparable” licenses, the court needs to carefully examine the royalty rates clauses in each comparable licenses, which impose a higher requirement on courts. Therefore, the courts must improve their procedures in protecting the confidentiality of the license agreements.
3. Expert’s opinions
He Jing said, “Economic analysis is playing an increasingly important role in SEP-related cases. Chinese courts have had few great practices. Incorporating expert’s opinions in deciding the scientificity and rationality of the royalty rates calculation approaches should be an important method.”
4. Amicus brief
He Jing pointed out that, FRAND royalty rate is an issue of global interests. By allowing stakeholders offering courts information, expertise or insight in the name of Amicus Brief, the courts can have a better understanding of the laws and the industries, therefore make more influential judgments.
5. Due process issues in the antitrust investigation
Due process and fairness are particularly important in antitrust enforcement whether it is related to FRAND royalty rate calculation or not. He Jing said that “to avoid imposing an excessive burden on the parties, the antitrust authorities need to limit the investigation scope to dispute related information in the antitrust investigation proceedings. The authorities should take care of the confidential information they acquired. Additionally, international development in this area should be put more emphasis on.