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5 Criterion J. on Innovation 1 (2020)

handle is hein.journals/critjinov5 and id is 1 raw text is: T H E C R I T E R I 0 N J O U R N A L O N IN N O V A T I O N VOL. 5 + + + 2020 Negotiating FRAND Licenses in Good Faith j Gregory Sidak* Government agencies in Japan, China, the European Union, the United States, and other countries have issued guidelines to facilitate private nego- tiation to license the use of standard-essential patents (SEPs) that a patent holder has voluntarily committed to a standard-setting organization (SSO) to offer to license on fair, reasonable, and nondiscriminatory (FRAND) terms to a third party seeking to implement the standard.' Although those guidelines differ in several respects, a common theme that emerges is the proposal that each counterparty negotiate a FRAND license in good faith. * Chairman, Criterion Economics, Washington, D.C. Email: jgsidak@criterioneconomics.com. I prepared this article for presentation at the conference Patents in Telecoms and the Internet of Things, organized by the Institute of Brand and Innovation Law at University College London and the Research Center for Advanced Science and Technology at the University of Tokyo and held in Tokyo on November 7-8, 2019, and the conference The Way Towards the Internet of Things: Open Standards vs Silos, organized by the European University Institute and held in Florence on November 15, 2019. I thank Henry Brooke, Adrian Howes, Sir Robin Jacob, Douglas Maggs, Pier Luigi Parcu, Urska Petrovei , Thomas A. Smith, Blount Stewart, Andrew Vassallo, Xiuying Yu, and conference attendees in Tokyo and Florence for their helpful comments. I have served as a consulting or testifying economic expert in disputes or negotiations concerning the licensing of SEPs on FRAND or RAND terms. Portions of this article might reiterate themes that I have expressed in nonconfidential passages of expert reports and testimony in those matters; however, I do not rely on any confidential business information (CBI) from any proceeding. No client or third party has commissioned or funded or exercised editorial control over this article. The views expressed here are solely my own. Copyright 2020 by J. Gregory Sidak. All rights reserved. 1 See, e.g., Guanyu Shenli Biaozhun Biyao Zhuanli Jiufen Anjian De Gongzuo Zhiyin (Shixing) (+t$9ttrW Yffha{t5_tI {tt [ (itff)) {Working Guidelines on the Trial of Standard-Essential Patent Dispute Cases (for Trial Implementation) (Apr. 26, 2018); Japan Patent Office, Guide to Licensing Negotiations Involving Standard Essential Patents (June 5, 2018), https://www.jpo.go.jp/e/support/general/sep-portal/document/index/guide-seps-en.pdf; Communication from the Commission to the European Parliament, the Council and the European Economic and Social Committee, COM (2017) 712 final, at 2 (Nov 29, 2017) (The Commission ... considers that there is an urgent need to set out keyprinciples that foster a balanced, smooth and predictable framework for SEPs.); Andrei Iancu, Under Secretary of Commerce for Intellectual Property and Director of the U.S. Patent and Trademark Office, Remarks Delivered at the Standard-Essential Patents Strategy Conference, Solvay Business School, Universitd Libre de Bruxelles (ULB) (Sept. 10, 2019), https://www.uspto.gov/about-us/ news-updates/remarks-director-iancu-standard-essential-patents-strategy-conference (Government policy should make clear that good faith negotiations are expected on both sides, and that the presence or absence of good faith during negotiations can be a factor in the setting of remedies for infringement of FRAND-encumbered SEPs.). I

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