U.S. Courts Have Limited Ability To Set FRAND Rates Globally


U.S. courts have correctly recognized that, absent the agreement of the potential licensee to be bound by a portfoliowide determination, they lack authority to resolve global FRAND disputes because they cannot compel a party to license patents it has not been found to infringe, and, moreover, they cannot determine liability for foreign patents. As one U.S. court has observed, "there exists no legal basis upon which [a potential licensee] may be compelled to take a license for [an SEP owner's] patents on a portfolio-wide basis."

The basic structure of the U.S. legal system is incompatible with the notion that a patent owner can unilaterally demand that a U.S. court set and enforce payments for that party's global portfolio. U.S. courts should continue to acknowledge the limits on their authority and leave global rate-setting only to the rare circumstances when the parties agree to such a procedure. U.S. courts should decline to follow the lead of the Unwired Planet case in the U.K.

Originally published in Law360 - January 22, 2021.

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