Monday, November 30, 2020
Eli Greenbaum | Yigal Arnon & Co.
Rarely must patent infringers demand their right to pay royalties. But several multinational manufacturers have gone to court to insist that they – and not other participants in the supply chain – make payment of any patent royalties. From a contractual perspective, judicial analysis of such claims has focused on the non-discrimination prong of the fair, reasonable, and non-discriminatory (“FRAND”) patent licensing commitment. In other words, some manufacturers have argued, and some courts and administrative agencies have agreed, that a patentee’s refusal to provide FRAND licenses at all levels of the supply chain constitutes discrimination and, as such, violates the patentee’s contractual obligation to license their patents in a nondiscriminatory manner. This Essay argues that such claims are misplaced – the principle of nondiscrimination provides no easy framework for analyzing such selective licensing of the supply chain. Rather, such questions must be examined through the more complex empirical, legal, and economic factors in specific circumstances.