Milbank partner Chris Gaspar, a member of the firm’s Litigation & Arbitration Group with a focus on intellectual property, was quoted in an article, “SEP Owners in the Driving Seat,” published by World Intellectual Property Review.
The article discusses the US Department of Justice’s granting of antitrust clearance to patent pool operator Avanci. The clearance “gives a green light, from an antitrust perspective, to the licensing model favoured by Avanci and standard-essential patent (SEP) owners,” under which the royalty is calculated based on the end product.
The article explains that the Department of Justice’s position on end-product-level licensing has been in conflict with the position of the US Federal Trade Commission (FTC). The US Court of Appeals for the Ninth Circuit, however, recently adopted the department’s approach and reversed an antitrust defeat for Qualcomm, which had been pursued by the FTC for allegedly using abusive business practices, such as licensing exclusively to end-product manufacturers of smartphones and smart cars.
The Ninth Circuit did not, however, clarify whether this practice violates fair, reasonable, and non-discriminatory (FRAND) obligations. As a result, there are likely to be many future disputes about whether the practice is a breach of these obligations.
Discussing the disputes, Chris notes, “Qualcomm and a challenger would each have good arguments—it’s a closer case than you might think.” He adds, “Qualcomm could argue that ‘chip manufacturers actually are getting access because their customers are getting access—they aren’t effectively being denied anything.’”
To read the full article, click here. Please note that a World Intellectual Property Review subscription is required to read the full article.
