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Judges reveal FRAND thinking

How would courts in Germany, South Korea, China, Japan and the US rule in FRAND cases? Leading judges from each jurisdiction explained what they would do in a mock trial at the AIPPI Congress

Presided over by an international panel of judges, the case involved a dispute between Angel, a non-practising entity holding a standards-essential patent, and Beast, a manufacturer of motor oil barrels that use the standard technology.

Patent ‘545 covers a barrel design that allows the contents to be poured out without leaving any residue through use of a sloping surface near the opening and using a screw cap. Beast’s product has a sloping surface but uses a breakable seal. The patent was granted to an inventor called Lou Zephyr, who submitted the design to the International Organization for Standardization (ISO) straight after filing for the patent, though did not disclose the filing until after its design was picked. Zephyr signed a declaration agreeing to license the patent under FRAND terms. Soon after, Angel bought the patent from Zephyr.

Angel brought the case before the AIPPI court, seeking monetary damages and injunctive relief.

National differences

The case highlighted a number of differences between jurisdictions. Chief judge Ki Young Kim quickly established that there was no literal infringement, but oral arguments concerned whether the doctrine of equivalence applied. Angel argued that though Beast’s product did not use a screw cap, the essential elements were the same and therefore infringing under the doctrine. Beast, on the other hand, asserted that the breakaway seal changes the essential function so there was no equivalence.

Another major issue concerned whether Angel violated its fair, reasonable and non-discriminatory obligations under the ISO and whether it acted in bad faith by not disclosing its patent filing until after the ISO adopted its standard. The court also wrestled with the question whether Zephyr’s declaration agreeing to grant licences on FRAND terms constituted an offer to enter into a contract for Beast to accept.

After nearly two hours of spirited questioning and bantering from the panel, as well as an impromptu happy birthday cheer for expert witness Hwang Lee, the court rendered its decision: Beast infringed Angel’s patent. It also found that while Angel had agreed to license the patent under FRAND terms, no agreement existed between the parties. The court granted Angel’s request for monetary damages and injunctive relief.

After the court handed down the decision, the judges revealed their individual thoughts on the case and highlighted differences in their own jurisdiction’s laws. Chief Judge Randall Rader of the US Court of Appeals for the Federal Circuit pointed out that the doctrine of equivalence is much more limited under US law, and the issue of infringement would probably have been decided differently. Judge Xia Luo of the the People’s Supreme Court of China noted that while she agreed on the infringement finding, she differed on the issue of granting an injunction, given the social cost in preventing goods from entering the market.

The panel consisted of judges Ki Young Kim (Seoul District Court), Peter Meier-Beck (German Federal Court), Makiko Takabe (IP High Court of Japan), Xia Luo (Supreme People’s Court of China), and Randall Rader (Federal Circuit Court of the United States).

Min Ho Lee of Lee & Ko and Seong Tahk Ahn of Central International Law Firm acted as counsel for the plaintiff, while Jehyun Kim of Y P Lee, Mock & Partners and David Chun of Ropes & Gray represented the defendant. Hwang Lee of Korean University Law School was the expert witness, and Ralph Nack of Noerr LLP moderated the session.

Download the AIPPI Congress News, published by Managing IP from Seoul, Korea, from our conference newspapers page.

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