AAI Opposes Injunctive Relief for Standard-Essential Patents Subject to a FRAND Commitment (Apple v. Motorola)

Dec 05 2012
Amicus Program

The AAI filed an amicus brief in the Federal Circuit yesterday in support of neither party in Apple v. Motorola. Apple involves counterclaims for patent infringement, including infringement of standard-essential patents (SEPs), which patent holders typically commit to license on fair, reasonable, and non-discriminatory terms (FRAND commitment). The AAI brief argues that SEP holders that have given a FRAND commitment should not be permitted to seek injunctive relief for infringement. When a patentee convinces a standard-setting organization (SSO) to incorporate a patent into a standard, the patentee gives a FRAND commitment to the SSO before the fact. If the patentee can evade the FRAND commitment after the fact, the patentee can engage in "holdup." The AAI brief observes that allowing a SEP holder to seek injunctive relief effectively allows it to repudiate its FRAND commitment and could lead a court to blessing and encouraging exclusionary conduct that violates Section 2 of the Sherman Act. SEP holders who have given a FRAND commitment have tacitly acknowledged that they can be adequately compensated by a reasonable royalty, and therefore they should not be eligible for injunctive relief under the second equity factor identified in the Supreme Court's holding in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006). The AAI brief further argues that the court should deny injunctive relief upon an additional broader proposition under the fourth equity factor in eBaby: There should be a presumption against the grant of an injunction in any case involving a SEP that is subject to a FRAND commitment because the strong public interest in robustly competitive standardized markets -- uncorrupted by patent holdup conduct -- would be seriously disserved by such relief.

The brief was drafted collaboratively by individual AAI Board members and staff, with assistance from Bob Cynkar and Joel Davidow of Cuneo Gilbert & LaDuca LLP.