Standard Essential Patents

What happens when a standard-setting organization establishes a technical standard that can be complied with only through the use of a patented technology? This module focuses on that problem, building on a case study of the Microsoft v. Motorola litigation.  Key issues involved in the case study include the problem of setting fair, reasonable, and non-discriminatory (“FRAND”) terms and deciding whether an injunction should apply. The materials in this module were created by Cynthia Laury Dahl, Practice Professor of Law and Director of the Detkin Intellectual Property and Technology Legal Clinic.

Applicable Courses: Intellectual Property, Patents, Contracts, Regulatory Law, Technology Policy

Materials:

• Case study: Cynthia Laury Dahl, When Standards Collide with Intellectual Property: Standard Setting Organizations, Technology, and Microsoft v. Motorola
• Teaching guide: Cynthia Laury Dahl, When Standards Collide with Intellectual Property: A Teaching Guide to Standard Setting Organizations, Technology, and Microsoft v. Motorola
• PowerPoint presentation: Cynthia Laury Dahl, When Standards Collide with Intellectual Property: Standard Setting Organizations, Technology, and Microsoft v. Motorola
•  Videos (YouTube):
  Andrew Culbert (former Associate General Counsel of Microsoft in charge of intellectual property litigation; currently Partner at Perkins Coie LLP and Lecturer at the University of Washington School of Law)

  • What role do standards play in the technology industry?

  • What does it mean to set a FRAND licensing rate?

  • Why did the dispute between Microsoft and Motorola go to court?

  • How can a licensor make a FRAND offer without risking a legal challenge?

  • Does the standard-setting process give rights holders what they are due?  

  Kirk Dailey (former Corporate Vice President of Intellectual Property at Motorola; currently Senior Vice President of Business Development at the Marconi Group)
  • Why is it important to value standard essential patents accurately? 
  • Why can’t standard-setting organizations decide a FRAND licensing rate?
  • How did the dispute arise between Microsoft and Motorola?  
  • Do different industries think about FRAND licensing differently?
  • Will companies continue to dispute licensing rates for standard essential patents?
  • Is injunctive relief proper if a licensor proposes a licensing fee?  
  Steven Fortney (former judicial clerk to Judge James L. Robart of the Western District of Washington; currently Partner at the Summit Law Group)
  • Was it helpful to bifurcate the contract claims from the patent claims?
  • Why did the judge decide the FRAND rate but leave the contract issue to the jury?
  • What precedent guided the court?
  • How does royalty analysis differ when patents are essential to a standard?
  • How did the court arrive at a FRAND rate?
  • Has the court’s decision affected subsequent FRAND negotiations?
  • Why should law students learn about voluntary standards?
  The Hon. James L. Robart (U.S. District Court for the Western District of Washington)
  • What was your reaction to learning you would preside over Microsoft v. Motorola? 
  • How was Microsoft v. Motorola a unique case?  
  • How did you come up with the approach you followed in deciding a FRAND rate in Microsoft v. Motorola? 
  • What makes for an appropriate comparable license when making a FRAND determination?  
  • Should a proper FRAND rate be based on the end product’s wholesale price?  
  • Why did you, as a U.S. judge, block an injunction that a German court imposed on Microsoft at the request of Motorola?  
  • When are injunctions a proper remedy in the context of standard essential patents?
  • Now that Microsoft v. Motorola analyzed the “fair and reasonable” aspect of FRAND, will the next cases focus on analyzing the definition of “non-discriminatory”?   
  • What is the legacy of Microsoft v. Motorola?  
• Workshop Videos: The Future of Standard Essential Patents: Learning from Microsoft v. Motorola’s Legacy (Penn Law, March 16, 2018) 
  • Welcoming Remarks: Cary Coglianese, Edward B. Shils Professor of Law, University of Pennsylvania Law School, and Director, Penn Program on Regulation
  • Opening Keynote Address: The Hon. James L. Robart of the U.S. District Court for the Western District of Washington, Evolution, Not Revolution: The Future of Standard Essential Patents 
  • Panel I: Microsoft v. Motorola’s Legacy in Today’s High-Tech Business World
  • Panel 2: Emerging Legal and Business Issues in Standard Essential Patents
  • Closing Remarks: Christopher Yoo, John H. Chestnut Professor of Law, Communication, and Computer & Information Science, University of Pennsylvania Law School, and Director, Center for Technology, Innovation & Competition
  • Closing Keynote Address: The Hon. Makan Delrahim, Assistant Attorney General, Antitrust Division, U.S. Department of Justice,  The “New Madison” Approach to Antitrust and Intellectual Property Law