Jorge L. Contreras S.J. Quinney College of Law University of Utah November 21, 2014

 Reassure the market  No hostile intentions  No hold-up  Induce the market  To adopt a standardized technology  To utilize an open platform 2

 Broad market adoption of common technology platforms  Interoperability  Network effects 3

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We should want to enforce patent pledges because:  Market benefits (instrumentalist)  Reliance (fairness)  Promise (morality) 5

A. Contract (common law) B. Promissory Estoppel C. Antitrust D. Equitable Servitude 6

 Patentee and SDO “agree” on FRAND  Other SDO members (and vendors?) are beneficiaries 7

1. Multilateral Agreement 2. Membership Agreement 3. Bylaws/Policy 4. Letter of Assurance 5. Voluntary Declaration, SDO 6. Voluntary Declaration, Non-SDO  Regulatory Proceedings  Press Release 8

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 Unilateral promise can be enforced if reasonably and detrimentally relied upon  BUT actual reliance must be shown 10

 Monopolization  Market power  Exclusionary conduct (deception)  Exclusion/Essential Facility  Section 5 (unfair methods of competition) 11

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Market Reliance = Promissory Estoppel + Presumption of Reliance 13 Contreras, A Market Reliance Theory for FRAND Commitments and other Patent Pledges, __ Utah L. Rev. __ (2015 forthcoming)

 Promissory Estoppel  Unilateral promise will be enforced if intended to be relied upon and made to the marketplace at large  Without a requirement of actual reliance  Presumption of reliance if promise is made to the “marketplace”  Similar to “fraud on the market” theory under Federal Securities Law 14

Efficient Markets Hypothesis: In an efficient capital market, all material information is reflected immediately in price. Reliance on false statements by market participants is presumed Basic v. Levinson (US 1988) 15

 Eliminate legal fiction of contract framework  Enhance enforceability of “non-contractual” statements  Remove distinction between FRAND and other Pledges  Reduce risk from patent transfer 16

 “Fraud on the Market” theory challenged, but survived (Halliburton v. Erica P. John Fund (US 2014))  Entrenchment of Contract theory in judicial decisions 17

Jorge L. Contreras University of Utah S.J. Quinney College of Law Salt Lake City, UT SSRN page: