FRAND licensing commitments: Back to first principles

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The UK Supreme Court’s judgment in Unwired Planet v Huawei addressed several issues relating to promises to license SEPs on FRAND terms under the ETSI IPR Policy – an English court’s jurisdiction to set worldwide terms for a FRAND license; English courts as a convenient forum; the scope of the non-discrimination obligation; the negotiation process to be followed to be seen as a “willing” licensee or licensor; and the proportionality of a FRAND injunction. The UKSC prefaces its findings on the five issues in dispute with an overview of the goals of the ETSI’s IPR Policy and the realities and commercial practice of SEP licensing. This paper critically reviews that overview and the conclusions drawn from that, in the light of first principles derived from competition law (especially essential facility principles) that underpin the ETSI IPR Policy and should govern interpretation under contract law, and which the UKSC should have analysed. In this light, it discusses the issuance of injunctions, the definition of willing licensor and licensee (including licensing level), the need for an effective proportionality assessment as a fallback, damage awards or rate setting as an alternative to injunctions, the setting of worldwide rates by national courts, and the FR and ND components of FRAND.