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USPTO and DOJ Issue F/RAND Remedy Guidance
Practical Law Legal Update 4-523-4935 (Approx. 3 pages)
USPTO and DOJ Issue F/RAND Remedy Guidance
by PLC Intellectual Property & Technology
| Published on 10 Jan 2013 • USA (National/Federal) |
The USPTO and the Department of Justice issued a policy statement on appropriate remedies for infringement of standards-essential patents that are encumbered by a RAND or FRAND licensing commitment.
On January 8, 2013, the USPTO and Department of Justice (DOJ) issued a policy statement offering guidance on when it is appropriate to issue injunctive relief or exclusion orders in Section 337 investigations concerning standards-essential patents subject to a F/RAND licensing commitment. A patent is RAND- or FRAND-encumbered (F/RAND) when, as a participant in standards-setting activities at a standards-developing organization (SDOs), a patent holder has voluntarily agreed to license the patent on either:
- Reasonable and non-discriminatory (RAND) terms.
- Fair, reasonable and non-discriminatory (FRAND) terms.
The USPTO and DOJ note in their order that exclusion is typically an appropriate remedy where an imported good infringes a US patent. However, they explain that a patent owner's F/RAND commitments may affect the choice of remedy for a standards-essential patent in circumstances where an injunction or exclusion order is inconsistent with the public interest. This is a particular concern where an exclusion order seems incompatible with the terms of the patent owner's F/RAND licensing commitment to an SDO. In those cases:
- The patent holder may be seeking to use the exclusion order to obtain more onerous licensing terms than it is entitled to receive under the F/RAND commitment.
- An exclusion order may harm competition and consumers.
However, the USPTO and DOJ acknowledge that an exclusion order may still be appropriate when a putative licensee:
- Is unable or refuses to take a F/RAND license and is acting outside the scope of the patent holder's commitment to license on F/RAND terms, for example, by:
- refusing to pay what has been determined to be a F/RAND royalty or to negotiate F/RAND terms; or
- insisting on terms clearly outside what could reasonably be considered F/RAND terms.
- Is not subject to the jurisdiction of a court that could award damages.
The USPTO and DOJ clarify that the examples they cite are not exhaustive, but identify factors relevant to determining whether public interest considerations should prevent issuance of an exclusion order. Depending on the facts of the individual cases, the public interest may preclude the issuance of an exclusion order when the infringer is both:
- Acting within the scope of the patent holder's F/RAND commitment.
- Able to license on F/RAND terms and has not refused to do so.
Further, the USPTO and DOJ urge the US International Trade Commission to consider whether a patent holder has acknowledged that money damages is the appropriate remedy through its commitment to license its patents on F/RAND terms.