The patent injunctions panel at the Brussels conference I organized last week and the SEP licensing workshop hosted by ACT | The App Association in Berlin on September 30 had hardly any overlap, despite both having much to do with the ongoing German patent reform process. Some of the relevant SEP injunctions case law had to be summarized on either occasion for context, but apart from that, the focus in Brussels was very much on (i) the proportionality principle under the EU's IPR Enforcement Directive (IPRED) and (ii) the state of affairs in the German process (with the ministry's draft bill still being on the drawing board), while the Berlin event covered the subject from a multiplicity of angles. Another difference is that ACT's event--under the ALlThingsFRAND label--was subject to the Chatham House Rule (no attribution of quotes to speakers), enabling some people to participate and share their views who otherwise couldn't have done so.
Yesterday, ACT uploaded its official "Report from Berlin" in English (the language in which the event was held) and in German.
The underlying idea of ACT's event was multi-stakeholder collaboration, and the following roadmap is laid out in the report:
- Communicate cross-sectoral multi-stakeholder consensus views on the interplay of patents, standards, and innovation in a public letter to EC leadership
Seek broad cross-sector multi-stakeholder collaboration in developing specific recommendations for German policy-makers on needed patent reforms to prevent SEP abuse
Continue support for CEN-CENELEC CWA 95000, Core Principles and Approaches for Licensing of Standard Essential Patents, through advancing its recommendations to EC policymakers and EU member states and seeking reedback on new venues and opportunities for this purpose
Replicate the goals of the Berlin workshop to be the beginning of further standards, patent, and SEP-related dialogue, scholarship, and ingenuity
With respect to SEP abuse, one of the speakers (whom I can't name due to Chatham though I'd like to give him credit for a first-rate presentation) gave a variety of examples of unfair conduct by SEP holders in connection with FRAND determinations and royalty negotiations. Those schemes were all known to me in principle because they surface all the time. But what I found really shocking is that even with the means of U.S. discovery at attorneys' disposal, some of those side agreements that effectively reduce royalty rates way below the nominal one (but the nominal one is then demanded from everybody else) don't show up easily. The panelist talked about one case (without naming the parties) in which even after extensive discovery they still hadn't seen the whole picture, but because of some oddities and irreconcilable numbers it dawned on them that some important element was missing. And then it turned out there was indeed yet another (not originally produced) agreement that changed the whole picture.
What others had previously told me is that SEP holders--with a view to future FRAND determinations in negotiations, arbitration or litigation with other parties--initially seek out small, financially weak and unsophisticated companies so they can easily impose high royalty rates on them and use those later in discussions or disputes with larger, deeper-pocketed and more experienced players as points of reference.
Another very well-known issue is that the confidentiality obligations imposed on potential licensees are often designed to just prevent--rather than enable--an actual analysis of the infringement allegations.
The mix of practicioners, policy experts, and academics at ACT's Berlin event was very good. Also, a European Commission speaker outlined the EC's perspective, and the audience agreed with most if not all of what he said.
What both ACT's Berlin event and my Brussels conference had in common is that, while "SEP" was in both titles, the injunction reform discussion inevitably includes non-SEPs. One can't help in the injunction context but touch on the problem of Germany's automatic patent injunctions over non-SEPs. Even for SEPs, despite the CJEU's Huawei v. ZTE ruling, more balance is needed in Germany. Those opposed to meaningful patent injunction reform in Germany try to argue that injunctions were only (or largely) a SEP-related issue that the CJEU allegedly solved years ago. But that's not true. The situation with respect to SEPs is still troubling, and non-SEP injunctions can wreak logistical havoc, too--not always, but sometimes.
ACT's Berlin event was designed to start and inspire discussion--not to solve the issues, but to contribute to the quest for solutions. The Federal Ministry of Justice and Consumer Protection will soon put a first draft bill on the table for stakeholders to comment on; thereafter, a second proposal will be sent to the Federal Parliament (Bundestag). There'll be more patent policy events in Berlin next year in all likelihood, and some of the information exchanged at ACT's event will be referenced on such future occasions, I guess.
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