International Conference on
Judicial Protection of IPR
Chengdu, China September 9-11 2009
Patents and Standards: The rôle
of the Courts
Christopher Floyd
Judge of the Patents Court
Royal Courts of Justice, London, UK
Standards
• International standards regulate a large range of
interoperable products particularly in the
computing and telecommunications fields.
• Examples are JPEG (Joint Photographic Experts
Group), MPEG (Moving Pictures Expert Group),
GSM (Groupe Speciale Mobile/Global System
for Mobile Communications) and 3G.
• Mandatory nature makes patents which embody
features of the standard extremely valuable.
Standards
Anything from:
Standards
To
Essential Patents
• A patent which must be infringed if the
technical requirements of the standard are
to be complied with.
• Technical, not commercial test
F.R.A.N.D.
• Commonly, members who participate in
the standards setting process required to
license essential patents on terms which
are
• FAIR
• REASONABLE
• NON-DISCRIMINATORY
Issues which may arise for the
Courts
• Is a patent truly “essential” to the
Standard?
• What are the principles embodied in
FRAND?
• Has a patentee abused a dominant
position by refusing to license on FRAND
terms?
Essentiality
• The number of “essential” patents which
the patent owner possesses is a factor in
licence negotiations
• Third parties may have a contractual right
to a licence under essential patents on
FRAND terms
• “Essentiality” also gives rise to an
alternative method of proving infringement
ETSI definition
• “Essential” as applied to IPR means that it is not
possible on technical (but not commercial)
grounds, taking into account normal technical
practice, to make …equipment or methods
which comply with a standard without infringing
the IPR.
• For the avoidance of doubt in exceptional cases
where a standard can only be implemented by
technical solutions, all of which are
infringements of IPR, all such IPRs shall be
considered essential
Determining “essentiality”
• English court has on several occasions
been asked to determine whether patents
are “essential” to a given standard
• Purpose – to counteract the effect of
alleged “overdeclaration”
Example 1: essential patent
• A standard requires a mobile device to be
capable of using both “open loop” and
“closed loop” power control.
• A patent claims a particular circuit for
combining the use of both types of power
control.
• Other non-infringing circuits for using both
types of power control are technically
possible.
Example 2: inessential patent
• A standard requires a mobile device to be
capable of using both “open loop” and
“closed loop” power control.
• A patent claims the idea of combining the
use of both types of power control.
Squeezes
• Patentee argues for wide construction to
preserve essentiality, so that patent
exposed to invalidity attack.
• Amendment of claims may change an
essential patent into an inessential one
Use of declaratory judgments
• Those wishing to use the standard may
wish to challenge whether any (and if so
how many) of a competitor’s declared
essential patents are in fact essential
• Can do so by seeking a declaratory
judgment of “inessentiality”
CPR 40.20
• “The Court may make binding declarations
whether or not any other remedy is
claimed”
Discretionary
• “It is obvious that the principal factor affecting the exercise of the
court’s discretion, apart from such matters as the adequacy of the
description of the device or system to which the invention is said to
be inessential is the utility of the negative declaration sought. Would
the declaration be the legal equivalent of shouting in an empty room,
or is there some point in it?”
• Pumfrey J in Nokia v Interdigital
Ingredients of an inessentiality
action
• One or more patents have been declared to be
essential to the standard
• The applicant for the declaration has a genuine
intention to market products which comply with
the standard
• There is a real dispute between the parties as to
whether the patent is in fact essential to the
standard
• Whether the patent is essential has real
commercial consequences for the parties.
Nokia v InterDigital action
• An action for declarations of inessentiality in
relation to 29 of InterDigital’s patents.
• How many were essential?
• By exchange of written evidence, the 29 patents
had reduced to 7.
• Of those 7, InterDigital chose not to advance a
case in relation to 3.
• That left 4, two of which were a parent and
divisional, meaning that only three different
specifications had to be considered at trial.
• Held essential: 1/29
Alternative method of proving
infringement
• Normal method: evidence directed to
features of product or process
• Alternative method in case of standards:
– Patent is essential
– D’s device declared to operate in accordance
with standard
– Infringement proved without looking at detail
of D’s device
Other standards related cases
• Declarations about disputed principles on
which FRAND royalty to be calculated
• Declarations that patentee obliged to grant
licence under specific essential patent
• Declarations as to what FRAND royalty is
on the facts?
• Abuse of dominant position.
Example
• A owns a portfolio of patents, 30 of which are declared essential to a
standard
• B wishes to market a device which operates in accordance with the
standard
• Licence negotiations between A and B break down over the amount
of royalty
• A sues B who denies infringement and essentiality, and attacks
validity
• B says that if its device infringes any valid patent which is essential,
then A is obliged to grant B a licence on FRAND terms
• B says that if any of the patents are valid and infringed and
essential, then A has abused a dominant position by refusing to
grant B a licence on FRAND or other reasonable terms
• B seeks a declaration that if any patent is valid, infringed and
essential, A is obliged to grant it a licence on FRAND terms
No licensing obligation
• Where a patentee encourages standard to
be set embodying a patent which he owns
and is essential
• Can he obtain an injunction/damages
against those who use the standard?
• Common law principles of acquiescence
and estoppel may apply
Case management problems
•
•
•
•
Size
Technical subject matter
Discretion
Amendment
Size
• A trial on 1 patent can last 3-4 days: so 30
patents…
• Single trial or smaller chunks?
• One judgment, or judgments on each
chunk?
Technical subject matter
• Grouping
• Teach-ins
Discretion
• Try at the end, when all the technical
decisions taken?
• Try at the beginning, so as to have
potential to avoid waste of resources?
Validity
• Can try at same time where manageable
• Where tens of patents involved may be
desirable to hold over
• In Nokia v Interdigital only 1/29 for which
validity mattered
Thank you