SEPs and FRAND Mike Lee, Google Lisa Nguyen, Latham & Watkins Advanced patent law institute December 14, 2017 SEPs and FRAND Mike Lee, Google Lisa Nguyen, Latham & Watkins

The Rules SEPs and FRAND in the United States What is a FRAND rate? Microsoft Corp. v. Motorola, Inc., 2013 WL WL 2111217 (W.D. Wa. Apr. 25, 2013) (Robart, J.) (calculating range based on a modified set of Georgia-Pacific factors) In re Innovatio IP Ventures, LLC Patent Litig., 2013 WL 5593609 (N.D. Ill. Oct. 3, 2013) (Holderman, J.) (adjusted Robart approach) Ericsson, Inc. v. D-Link Sys., Inc., 773 F.3d 1201 (Fed. Cir. 2014) (no bright line rule) Is injunction consistent with FRAND? Certain Electronic Devices, 337-TA-794 (Samsung v. Apple) (2013) (exclusion of undisputed SEPs overturned by the President) Realtek Semiconductor Corp. v. LSI Corp., 946 F. Supp. 2d 998 (N.D. Cal. 2013) (Whyte, J.) (seeking injunction before offer breaches FRAND) Latham & Watkins operates worldwide as a limited liability partnership organized under the laws of the State of Delaware (USA) with affiliated limited liability partnerships conducting the practice in the United Kingdom, France, Italy and Singapore and as affiliated partnerships conducting the practice in Hong Kong and Japan. Latham & Watkins operates in Seoul as a Foreign Legal Consultant Office. The Law Office of Salman M. Al-Sudairi is Latham & Watkins’ associated office in the Kingdom of Saudi Arabia. © Copyright 2017 Latham & Watkins. All Rights Reserved. In connection with this document, you agree not to share with Latham & Watkins any confidential information regarding this potential engagement unless and until an attorney/client relationship is established and agreed-upon in writing.

The Rules SEPs and FRAND in Europe What is a FRAND rate? EU Guidelines Removes use-based licensing present in prior versions of guidelines Highlights the avoidance of royalty stacking Emphasizes value of the patented technology not the standard Unwired Planet v. Huawei ([2017] EWHC 711 and [2017] EWHC 1304) (England) (single FRAND rate) Is injunction consistent with FRAND? Huawei v. ZTE, 4a O 73/14 (March 2016) (Germany)(injunction available against unwilling licensees)

The Rules SEPs and FRAND in Asia What is a FRAND rate? Still developing Ericsson v. Micromax Informatics Ltd., CS (OS) 442/2013 (Delhi High Court) (royalty based on price of entire product) Is injunction consistent with FRAND? IWNComm v. Sony (Beijing IP Court) (2017) (first SEP-based injunction issued in China)

The Play Scenario 1 You are a widget manufacturer. You sell your widget for $100 per unit. The cost to manufacture your widget is $50 per unit, including a $10 chip within the widget. The chip implements the CHIP standard. There have been 1,000 patents declared essential to the CHIP standard, with 10 U.S. patents owned by SEP Holder. SEP Holder is demanding a 1% royalty on the price of your widget.

The Play Scenario 2 A patent pool for the CHIP standard has now formed, representing 500 patents declared essential to CHIP. You agree to join the pool as a licensee, paying a $0.25 per widget royalty to the CHIP patent pool. European Widget Company is not part of the CHIP patent pool, and is demanding a $0.25 per widget royalty for its 50 UK/DE patents. But you disagree that European Widget Company's patents are standards essential and/or valid.

The WRap Up Questions?

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