Legal Issues Concerning Enforcement of FRAND-encumbered Standard Essential Patents

In exercising patent rights related to inventions essential for setting technical standards (standard essential patents), particular consideration is required to ensure that problems such as holdups and royalty stacking do not arise while ensuring appropriate protection of patent rights. Standard setting organizations have taken certain steps to address patent-related issues, including making fair, reasonable, and non-discriminatory (FRAND) declarations obligatory, but many legal issues remain entrusted to the legal interpretation and operation by the courts and administrative agencies (competition authorities, etc.). Concrete examples of this include the legal nature of the FRAND declaration, the standards for granting civil remedies such as injunctions, and the amount of license fees under FRAND conditions. In this article, based on trends in the United States, Europe, China, Korea, and some other countries, I will review the characteristics of Japan's precedents and the issues that need to be resolved. In conclusion, Japan's precedents (decisions of the Intellectual Property High Court) can be evaluated as reasonable judgments passed in line with international trends, as they generally deny the claim for injunctions based on FRAND-encumbered standard essential patents and for damages exceeding the FRAND license fees. However, the following issues are considered to be outstanding and need to be resolved in the future: (1) concretization of the recognition standards for willing licensees; (2) treatment in the case of transfer of standard essential patents; and (3) the establishment of appropriate dispute resolution means, including the calculation of FRAND license fees.