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"In accordance with general contractual principles, the obligation to 'prepare to grant an irrevocable licence' should be interpreted as such that the obligation may be performed/discharged with or without the cooperation of the implementer. ”
来源:IPRdaily中文网(iprdaily.cn)
作者:Curtis Dodd、Chris Dubuc, Harfang IP Investment Corp
Translation: Beijing Sitao Intellectual Property Agency Co., Ltd
In the U.S., the question of whether licensing commitments to standards-setting organizations should be complied with is often seen as a contractual issue. As we have discussed before (here [1] and here [2]), some implementers, although not negotiating in good faith, want to interpret such commitments in order to avoid losing their right to a fair, reasonable, and non-discriminatory (FRAND) license, or to have it both ways, to preserve their FRAND rights. In a recent article[3], we explored whether this interpretation follows basic principles of contract law, with specific reference to the language of the European Telecommunications Standards Institute (ETSI) Intellectual Property Information Statement and License Statement ["ETSI License Notice"].
Specifically, looking at French and US/California law, we focus on the language of the obligation to "prepare to grant an irrevocable license ......" as set out in the ETSI License Statement. Taking into account the choice of law clause in the ETSI License Notice, which states that "the construction, validity and performance of this Intellectual Property Information Statement and the License Statement shall be governed by French law" (emphasis added), we have considered the former. However, U.S./California law is also taken into account because if a contract lawsuit is brought in the state, California law will still apply if the French law conflicts with the basic public policy of the state and the state retains a greater interest in the matter. But as long as the laws don't conflict, there's no problem. For example, both California and French law appear to follow the black letter law rule of contract, which states that an obligation is discharged upon full performance. So, what does it mean to be "ready to grant irrevocable permission" and what does it mean to show such a willingness or willingness to be prepared?
In accordance with the rules of contract interpretation set forth in the Corbin on Contracts[4], Restatement of Contracts (II)[5], the California Civil Code, and the French Civil Code, the court will consider, among other things, the plain language about the obligation, the intent of the parties, what is reasonable in the circumstances, what makes the obligation clear and capable of being performed, and what makes the obligation lawful. An analysis of all considerations suggests that the patent holder's obligations to ETSI should be able to be fulfilled and discharged even without the cooperation of implementers.
Literally
From the literal analysis of the above obligations, it is important to note that agreeing to be "ready" to do something is not the same as agreeing that something will actually happen. For example, agreeing to clear land to prepare it for planting is not a requirement to grow crops. The simple linguistic meaning of the word "ready" also does not require any constant state of readiness.
Intent of the Parties
Although the literal meaning of the obligation is simple, the intent of the parties to the contract must also be taken into account, as intent can take precedence. ETSI's intent is set out in the three policy objectives of the ETSI Intellectual Property Policy ["ETSI IPR Policy"]. These objectives essentially boil down to balancing two competing interests: (i) ensuring that standards are accessible to implementers; and (ii) ensure that the contributions of standard-essential IP owners are fully and fairly rewarded. Comparing two possible interpretations of the obligation to "prepare to grant an irrevocable license", one is that the obligation can be fulfilled/discharged with or without the cooperation of the implementer, and the other is that the obligation cannot be performed/discharged, and ETSI's policy objectives seem to favor the former. This is because the accessibility of the standard can be achieved by requiring the patent holder to commit to a FRAND license and/or by promising to negotiate in good faith; Conversely, not allowing the fulfillment/discharge of obligations until the implementer cooperates would deprive the patent holder of a fair and reasonable reward for his or her contribution and give the implementer an undue advantage in licensing negotiations for the reasons described below.
What is reasonable?
As to what constitutes a reasonable interpretation of this obligation, first consider that, as we have discussed earlier [6], the obligation of the patent holder is to be prepared to grant an irrevocable license, not to prove the necessity of the license. In addition, this interpretation does not take into account the fact that a patentee cannot legally require implementers to enter into a FRAND license (possibly except in China), but can only file a separate patent infringement lawsuit in each country on the basis of each patent. Conversely, as with other contracts, licensing requires consensual agreement and a certain amount of risk on both sides. Allowing implementers to exercise their rights under FRAND licensing after the patentee is forced to sue for infringement ignores the costs associated with exercising the rights and places all the risk of uncertainty on the patentee (rather than requiring implementers to choose between their or unwanted licenses and risky infringement, and thus potentially increasing the damages associated with them, which is how most licensing programs (e.g., fishing licenses)). If there is no negative impact from timely and bona fide negotiations, implementers can benefit from denial of licensing by accumulating funds obtained through the commercialization of the infringing technology and using those funds to defend against infringement lawsuits and challenge validity.
Nothing in the ETSI contract suggests any intention on the part of ETSI or the patent holder to allow the implementer to act in the manner described above while still retaining the right to obtain a FRAND license. In addition, it is not possible to obtain an injunction for patent infringement in a U.S. district court for any intent and purpose. Thus, allowing performance/discharge of obligations simply means that implementers may suffer over-FRAND damages for infringement and may face future over-FRAND licensing rates, neither of which will have an impact on the accessibility of standardized technology. In contrast, not allowing performance/rescission of obligations without the implementer's cooperation will significantly reduce the patent owner's return on investment, and may even make the cost of exercising the right more likely to exceed the benefits of licensing.
Clarity and ability to perform
With regard to clarity and enforceability, it is important to note that interpreting the obligation to prepare to grant irrevocable consent as requiring the cooperation of the implementer means that it is impossible to enforce/perform the obligation if the implementer insists on holding out. At the very least, such an obligation is unclear and uncertain. In contrast, it is preferable to allow the obligation to be performed/discharged without the cooperation of the implementer, for example, by requiring the patent holder to make a FRAND offer, an interpretation that makes the obligation clear and fulfillable. It is worth noting that the French Civil Code expressly prohibits "perpetual undertakings" and further states that indefinite contracts can be terminated at any time. Similarly, J. In his paper entitled "A FRAND Contract's Intended Third-Party Beneficiary," Gregory Sidak argues that a 1948 decision of the U.S. District Court for the District of Massachusetts disapproved the interpretation that the obligation to license on reasonable terms creates a permanent obligation (cf. Rudenberg v. Clark[7] , 81 F. Supp. 42 (D. Mass. 1948)） 。
lawfulness
Interpreting the obligation to prepare to grant an irrevocable license as requiring the cooperation of an implementer who may or may never cooperate also means that the obligation may persist long after the expiration of the patent. Given that post-patent licensing may violate antitrust laws and constitute patent abuse, an interpretation that avoids this potential consequence by allowing the fulfillment/discharge of obligations without the cooperation of implementers is preferable.
Implied conditions
In addition to the rules of interpretation, both California and French law allow courts to interpret the rules and conditions necessary to make a contract reasonable in a particular situation. This includes the interpretation of conditions related to the timing of the performance obligation. The interesting thing about the rules on the conditions for the interpretation of the time to perform is that they are usually formulated to allow the debtor to perform within a reasonable time, rather than how long the debtor must wait to perform. Because, who would complain about the fast fulfillment of online orders or the early completion of construction projects?
Legal Judgments
Consistent with the foregoing, Judge Rodney Gilstrap ruled (emphatically) as follows in fulfilling the obligations set forth in the ETSI Licensing Statement:
Finally, the Court held that, under French law, ETSI members who have filed a license declaration pursuant to Article 6.1 of the ETSI Intellectual Property Rights ("IPR") Policy may fulfill their FRAND obligations by: (1) committing to a license under FRAND terms and conditions, or (2) negotiating a FRAND license in good faith.
See HTC Corporation, HTC America Inc v. Telefonaktiebolaget LM Ericsson, Ericsson Inc,[8] Case No. 6:18-CV-00243-JRG (Federal Court of Texas, 2019), Memorandum Opinion and Final Judgment. It is important to note that Judge Rodney Gilstrap did not require any implementers to participate, at least not in fulfilling the obligation by committing FRAND licensing. It can be argued that even if there is a lack of cooperation on the part of the implementer, good faith negotiations may be satisfied, for example, by initiating arbitration on reasonable terms and conditions, although this is not clear in the award. To some extent, good faith negotiations do require the involvement of implementers, however, Judge Rodney Gilstrap's ruling results in the inability to determine whether a party has fulfilled its obligations, as it is impossible for the court to know whether the terms promised comply with FRAND requirements (or more precisely, not to contravene FRAND requirements) if the court does not consider these terms and conditions. On the other hand, it is easy to assess from the outset whether a reasonable request for arbitration has been made.
What if the implementer is required?
But what if we are wrong and need the implementer's cooperation to fulfill/discharge the patent owner's obligation to be prepared to grant an irrevocable license?
Rescinded due to performance
According to Corbyn's theory of contract, if the performance of one party's obligations depends on the cooperation of the other party, the obligation to perform can be discharged if such cooperation is not carried out. Both California and French law reflect similar principles, with a promise of good faith and fair dealing implicit in each contract, with the former explicitly stating that the undertaking includes the right not to interfere with the other party's right to obtain contractual benefits. Consistent with this, Judge Rodney Gilstrap allowed Ericsson's unilateral claim that HTC "rejected, denied and/or waived any rights relating to Ericsson's FRAND claims and was a non-bona fide negotiator" at the trial stage and ultimately found that HTC "breached its obligation to negotiate in good faith with Ericsson to obtain a license......
Discharge due to non-performance conditions
However, HTC has made a point that is inconsistent with the reciprocal obligation of the parties in the good faith negotiation to interpret the ETSI license statement, namely that the implementer is not a party to the contract. If the obligation to grant an irrevocable licence is interpreted as requiring the cooperation of the implementer, then in view of the lack of a contractual relationship, there may not be an implied obligation to negotiate in good faith, but rather the implicit precondition for the performance of the obligation by the patent holder. Support for this view can also be found in Corbin on Contracts and Restatement (Second) of Contracts. With regard to the time limit for the provision of such accommodation, Corbyn's contract theory further states that, although the time limit is not specified, the obligation will one day be discharged even if the debtor fails to perform. A similar view is expressed in the Restatement (Second) of Contracts. More importantly, the Judge of the U.S. District Court for the District of Massachusetts, Charles Wyzanski, Jr., in Rudenberg v. Clark [9] clarified the requirement that a licensee must act within 120 days of obtaining the licence or state the reasons why its rights should not be terminated.
An important effect of taking the occurrence of an event as a condition for performance is that if the event does not occur within a reasonable time, the obligee is at risk of default, however, imposing an implied obligation on the obligee to ensure that the event triggering performance occurs, if the breach of the implied obligation is insignificant, will not result in the discharge of the primary obligation. In view of the risk of default, the Restatement (Second) of Contracts provides for the avoidance of such potentially serious consequences. However, given the importance of the implementer's cooperation to the patentee's performance and the fact that such cooperation is within the implementer's control and only the patentee is obligated under the contract, these rules do not appear to apply to the ETSI situation. It is further noteworthy that implementers have been granted contractual access to standardized technologies.
Obstruction/Impossible
For obligations that require cooperation, the obligee's refusal to cooperate may also be regarded as "hindering" the implementer's performance or making it "impossible" for the implementer to perform the contract, thus proving that the termination of the obligation is justified. Corbin on Contracts is quoted as saying that even a situation that is "far from practically impossible" could result in the discharge of obligations under California and French law. We note that such issues are common in the field of construction contracts, and the obligations of the contractor often depend on whether the owner provides access to the site or has obtained the necessary permits. See, for example, Bomberger v. McKelvey, Case No. 35 Cal. 2d 607 (Cal. Sup. Ct. 1950), NYU Hospitals Center v. HRH Construction LLC (In re HRH Construction LLC), Case No. 12-CV-1384 DAB (SDNY 2015) and United States v. Bedford Assocs. [10]. ], Case No. 79 Civ. 1522 (HFW); No. 79 Civ. 1482 (HFW) (S.D.N.Y. 1982)。 See also California Civil Jury Order No. 4502, "Breach of an Implied Deed of Necessity for the Supply of Necessary Items within the Owner's Control" in the California Civil Jury Directives Construction Law Series.
Conclusion: Implementers must cooperate
According to general contractual principles, the obligation to "prepare to grant an irrevocable license" in the ETSI license statement would seem to be interpreted to mean that the obligation can be fulfilled/discharged regardless of the implementer's cooperation. This is especially true in U.S. district courts where injunctive relief is not actually available, so there will be no problem of a lack of standard accessibility. Even if the obligation is interpreted as requiring the implementer to cooperate, even if the patentee does not perform the contract, the implementer's failure to provide such cooperation in a timely manner can justify the discharge of the obligation.
Exegesis:
[1]https://ipwatchdog.com/2020/12/02/sep-owner-obligations-analyzing-frand-statements-cellular-wireless-seps-part-iv/
[2]https://ipwatchdog.com/2022/06/02/shall-released-favorite-song-among-sep-implementers/id=149384/
[3]https://deliverypdf.ssrn.com/delivery.php?ID=261087081122069117126069099093099071052087053042027060078069088126090088081024015022019114028045009056121078007122006100002020098080071048000110067088113020102018109028073060091096101074117107121029113082106076023123069122067097003024090019113004068020&EXT=pdf&INDEX=TRUE
[4]https://store.lexisnexis.com/products/corbin-on-contracts-skuusSku6674
[5]https://library.law.yale.edu/restatement-law-second-contracts
[6]https://ipwatchdog.com/2021/07/19/burden-proof-regarding-cellular-wireless-standard-related-patents-final-thoughts-critics/id=135692/
[7]https://www.leagle.com/decision/194812381fsupp421115
[8]https://www.leagle.com/decision/407201911fsupp3d63143
[9]https://www.leagle.com/decision/194812381fsupp421115
[10] https://www.leagle.com/decision/19821296548fsupp74811168
(Original title: How French Law and California Law Interpret SEP Holder Obligations Under ETSI License Statement)
来源:IPRdaily中文网(iprdaily.cn)
作者:Curtis Dodd、Chris Dubuc, Harfang IP Investment Corp
Translation: Beijing Sitao Intellectual Property Agency Co., Ltd
编辑:IPRdaily辛夷 校对:IPRdaily纵横君
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