Reasons to Reject a No Injunctions Rule for SEPs and FRAND-Obligated Patents

Hill Wellford, Apr 30, 2012

Government officials, academics, and some industry participants recently have suggested that holders of so-called “standards-essential patents” (“SEPs”), meaning patents that are technically essential to the practice of technology standards, should be prohibited from seeking injunctive relief against products that infringe by implementing such standards. This prohibition would apply particularly with respect to patents that are subject to FRAND (fair, reasonable and non-discriminatory) licensing commitments and would apply in all situations, including defensive use and use during cross-licensing negotiations.

In my view, such a rule would be misguided. This no-injunction idea appears to spring from a serious misunderstanding of the nature of FRAND obligations, the likely long-term consequences of imposing additional burdens on innovators who participate in the standard-setting process, and the current state of technology markets. The misunderstanding appears to derive from five basic errors, which I hope to help correct by discussing each below.

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