What is a RAND Licensing Rate? The Ninth Circuit Weighs in.

Morrison & Foerster LLP

July has just ended, and SEP and FRAND issues are in the air. On July 8, the Japan Fair Trade Commission (JFTC) sought public comments on its proposed amendments to its Guidelines for the Use of Intellectual Property under the Antimonopoly Act, which include guidance on the enforcement of SEPs. On July 16, the European Court of Justice issued its ruling in Huawei v. ZTE, which sets forth the factors to determine when enforcement of SEPs subject to commitments to license on FRAND terms may violate European competition law. And on July 30, the Ninth Circuit issued its highly anticipated decision in Microsoft v. Motorola.

The Ninth Circuit’s decision is the first appellate review of a full-blown district court determination of RAND rates. Only a few other district courts have dealt with the issue of how to determine RAND rates, and the Federal Circuit has provided only limited guidance. The district court’s decision in Microsoft v. Motorola, which set forth a comprehensive framework for determining RAND rates, therefore attracted considerable attention. Not surprisingly, the appeal prompted numerous amici to offer various points of view on the appropriate framework.

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