On May 16, 2014, the Intellectual Property High Court rendered a decision regarding “FRAND defense” in the Apple v. Samsung case , numbered Heisei 25 (Ne) No. 10043.
The following gist of the judgment is regarding the part of FRAND defense.
“ It cannot be considered, as follows, that the relevant FRAND declaration is an application for license agreement under French law.
That is, (1) the relevant FRAND declaration only contains the wording, ‘prepared to grant irrevocable licenses,’ … and is not considered to be a decisive approval of licensing in terms of wording.
Also, (2) …The relevant FRAND declaration lacks the conditions that should properly be established in a license agreement and if the declaration is considered to be an application for license agreement, the contents of the license agreement that is concluded cannot be established.
Similarly, (3) …in which there is a holder of an essential patent who has not made a FRAND declaration, a situation may occur where the license agreement is concluded only in regard to a patent subject to the FRAND declaration without the reciprocity condition being met.
In addition, (4) … even in ETSI, it is premised that a FRAND declaration based on the IPR Policy, including the relevant FRAND declaration, does not immediately lead to the conclusion of a license agreement.
Further, (5) although in the process of formulating the present ETSI IPR Policy, there initially existed an attempt to make a stipulation enabling the providing of an ‘automatic license’ to users, this was relinquished due to a strong opposition and the present IPR Policy was adopted consequently … .”
“ …The trust of the party performing the manufacture, sale, etc., of the UMTS-standard compliant product with such expectations will be damaged if the exercise of the right to seek damages beyond the license fee according to the FRAND terms is allowed in regard to the relevant patent for which the relevant FRAND declaration has been made.
… A party that has made a FRAND declaration, such as the relevant FRAND declaration, that is required by the ETSI IPR Policy has declared the readiness to grant, on its own will, an irrevocable license under the FRAND terms and it can thus be said that the necessity of allowing the right to seek damages beyond license fee according to the FRAND terms is not high.
It therefore should be determined when a patentee who has made the FRAND declaration seeks, on the basis of the patent rights, damages beyond the license fee according to the FRAND terms, the seeking of damages beyond the license fee can be rejected if the counterparty, from whom the damages are sought, claims and proves the fact that the patentee has made the FRAND declaration.
On the other hand, if the patentee claims and proves that there exist special circumstances, such as the counterparty not having an intention to receive a license in accordance with the FRAND terms, it should be determined that the portion of the damages sought beyond the license fee according to the FRAND terms should also be allowed. … The special circumstances, such that the counterparty does not have the intention to receive a license in accordance with the FRAND terms, should be subject to rigorous scrutiny.”
“ … First, of the total sales amount of the relevant products 2 and 4, the proportion of the portion contributed by the compliance to the UMTS standards is calculated … and then the proportion of the portion, among the portion contributed by the compliance to the UMTS standards, that is contributed by the relevant patent is calculated … .
In calculating the proportion of the portion, among the portion contributed by the compliance to the UMTS standards, that is contributed by the relevant patent, a calculation method by which the total of the license fee for all essential patents does not exceed a fixed proportion is adopted from the standpoint of suppressing the cumulative royalty from becoming excessive …, and in the present case, it is appropriate to perform division by the number of patents essential to the UMTS standards because the specific contents of the other essential patents are not clear.”