Competition Law, Settlement And Licensing - Annual Patents Review 2017

This is the Competition Law, Settlement and Licensing chapter of Gordon Harris' Annual Patents Review 2017. For the other chapters of the review, please follow the links below or download the Annual Patents Review 2017 in full.

Introduction Infringement Validity Technical Matters and Procedure Competition Law, Settlement and Licensing Employee Inventor Compensation Summary and Conclusions 5. Competition Law, Settlement and Licensing Competition law

The big issue regarding competition law this year arose in the case of Unwired Planet v Huawei (non-technical)88. I have already given some consideration to this issue under the heading of FRAND above. It was established that competition law is a different issue, and that behaviour which might fall outside the scope of FRAND, does not necessarily fall in breach of competition law.

In assessing the dominant position of the holder of a standard essential patent (SEP) the practical effect of the FRAND undertaking and the potential for hold-out by an implementer of relevant technology may lead to the conclusion that an SEP holder is not in a dominant position. European case law indicates that there can be a presumption of dominance but it can be rebutted.

However, in the present case, in the absence of any positive case denying dominance (Unwired Planet merely did not admit) and in the absence of any proper economic analysis (no evidence from either party) the relevant facts were not, alone or together, sufficient to justify not drawing the inference of dominance. These facts were:

the market for licences under the SEPs (the relevant market) was covered by the FRAND undertaking; the market was one in which the licensee can engage in holding out; and there was some evidence that licensees do so. Some commentators feel that, in reaching that conclusion in those terms, the judge has left the door open to future cases challenging the notion that the ownership of SEPs equates to dominance. Indeed this is already a live issue in pending litigation in the UK.

The next question is whether the conduct of either party amounts to an abuse of its dominant position. For example, had Unwired Planet abused its dominant position by bringing litigation prematurely?

The judge said that from the CJEU's judgment in the Huawei v ZTE89 case he derived the following principles for making this assessment ([744]):

(i) In the judgment the CJEU has set out a scheme which both the patentee and implementer can be expected to follow in the context of a dispute about a patent declared essential to...