The domain of SEP (Standard Essential Patents) negotiations has recently come under the spotlight due to increasing emphasis on the “willingness” concept. License negotiations for these patents need to adhere to fair, reasonable, and non-discriminatory (FRAND) terms. Interestingly, not showing willingness now can have practical consequences.
An SEP is a patent that claims an invention, without which it would be impossible to make, sell, or use a certain standard product. Licensors of these patents are expected to extend licensing terms that are fair, reasonable, and non-discriminatory to all potential licensees. The licensee, on the other hand, is expected to negotiate in good faith. The concept of “willingness” is increasingly being used to evaluate the good faith effort of both the licensor and licensee.
More and more, the courts have started considering the willingness or unwillingness of the parties involved in the license negotiations. The emphasis is no longer solely on the FRAND terms of the agreement, but also on the behavior of the parties during the negotiation process. A party being perceived as unwilling might face legal consequences.
For instance, courts might make unfavorable rulings against an unwilling party, or the lack of willingness might be used in calculating the damages, especially in cases pertaining to patent infringement. Courts might also consider injunctions against parties unwilling to negotiate in good faith in SEP licensing disputes.
It is, therefore, becoming more critical for corporations and law firms to consider the willingness aspect when entering into negotiations involving SEPs. It is not just about reaching an agreement, but also maintaining a conducive environment for negotiations. Corporations should take note of this changing legal landscape and revise their negotiation strategies if needed.
For a closer look at the subject, visit Axinn, Veltrop & Harkrider LLP which provides insightful legal news on this and related topics.