The willingness of national courts to set global FRAND royalty rates for patents that are essential to key industry standards has led to international jurisdictional conflicts, competing anti-suit injunctions and a global race to the courthouse. This essay supports the adoption of legislation that repudiates global FRAND rates set unilaterally by courts in other countries and instead mandates the adjudication of FRAND royalty rates for national patents through a multi-party proceeding. It is hoped that such a system will eventually lead to a consolidated, international mechanism for global FRAND rate determination.

By Jorge L. Contreras[1]

 

Courts have increasingly been asked to adjudicate disputes over the level of fair, reasonable and nondiscriminatory (“FRAND”) royalty rates that holders of standards-essential patents (“SEPs”) are permitted to charge manufacturers of standardized products. Courts making these determinations may assess FRAND rates only as to SEPs issued in their own countries (the “national FRAND approach”) or as to all SEPs worldwide that would be included in a license had it been negotiated by the parties (the “global FRAND approach”). These competing approaches are discussed below, along with some of the international jurisdictional issues that they have raised and potential legislative solutions that could address these issues.

 

I. NATIONAL FRAND APPROACH

Patents are instruments of national law and, as such, have legal

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