FRAND Undertakings: A Long Awaited Legal Qualification In Europe – Paris Takes The Lead

The decision of February 6, 2020 by the case management judge of the Paris High Court (Tribunal Judiciaire) is of great importance in terms of both the legal qualification of the undertaking of the owner of patents essential to the implementation of standards to grant to anyone a fair, reasonable and non-discriminatory (FRAND) license, and the importance of Paris as a future venue for so-called FRAND disputes.

Article 6 of the IPR Policy of European Telecommunications Standards Institute (ETSI), the European standards organization for the telecommunications sector, stipulates: "When an ESSENTIAL IPR relating to a particular STANDARD or TECHNICAL SPECIFICATION is brought to the attention of ETSI, the Director-General of ETSI shall immediately request the owner to give within three months an irrevocable undertaking in writing that it is prepared to grant irrevocable licences on fair, reasonable and non-discriminatory ("FRAND") terms and conditions under such IPR."

The legal definition of "FRAND undertaking" has been disputed for many years. The ETSI rules are governed by French law, but this question has never been referred to the French courts, while legal analysis of the meaning in the UK and Germany has reached divergent conclusions.

This case gives the Paris High Court the opportunity to qualify the meaning of the "FRAND undertaking." And at this stage, the case management judge considers that this would amount to a stipulation pour autrui (third-party beneficiary clause) within the meaning of Article 1205 of the French Civil Code.

Background

The dispute concerns standard essential...