FRAND commitments : a way to manage standardisation in European competition law?

Details

Supervisors

Nihoul, Paul

Faculty

Faculté de droit et de criminologie

Degree label

Master [120] en droit

Abstract

Today intellectual property is more and more present and it can give rise to anti-competitive impacts whereas the European Union advocates free competition through Articles 101 and 102 of the TFEU. As consumers of technologies, we demand more compatibility between the technologies we use in our daily lives (e.g.: electronic chip makers have to make the chips compatible with the product they are inserted in). This standardisation with intellectual property rights, specifically patents, can have negative effects on competition: decrease of competition by prices or by the refusal to grant access to useful/essential technologies etc. The starting point of the analysis is the process of standardisation within a standard-setting body. Once the standard is adopted by this body, several owners of inventions provide themselves with a standard essential patent (“SEP”), i.e. patent protecting a new essential technology for a standard. A conflict between Article 101 TFEU and standardisation agreements can occur because this Article prohibits cartels and other agreements that could disrupt free competition. However the European Commission, in its Horizontal Guidelines of 2011, recognises the general benefits that standardisation brings, and so such agreements are acceptable under antitrust rules, provided this takes place under strict conditions of openness and transparency. Another conflitc may occurs between Article 102 TFEU (abuse of dominant position) and the behaviour of the owner of a SEP. SEP holders tend to keep this technology to themselves or to license it at high royalties with the aim of granting a license to few third parties. Such behaviour has competition issues and to counter this limitation, there are different remedies. One of those is to grant licences on FRAND terms (Fair, Reasonable and Non-discriminatory) via the commitment of the SEP holder to a standardisation body. Once the SEP is declared, its holder is invited to undertake irrevocably to provide third parties, who want to use the standard, licenses on FRAND terms. Those commitments are made compulsory due to two types of problem: patent hold-up and patent ambush. However the meaning of FRAND is vague. Nevertheless, FRAND commitments themselves lead to another issue concerning Article 102 of the TFEU, which is the question to know whether the refusal to license at FRAND terms, even though the SEP holder commits himself to do so with an SSO, constitues an abuse of dominance. For the European Court of Justice and the Commission, such refusal can constitute an abuse of dominance since the action for an injunction brought by the proprietor of a SEP is such as to preclude the appearance or maintenance on the market of products complying with the relevant standard and manufactured by the competitors. In its Huawei judgement, the ECJ held that the owner of SEP can bring actions against an alleged infringer if he complies with some requirements. However this judgement leads to new issues that need to be solved. The Commission wants to answer some of them with its 2017 roadmap on SEP for an European digitalised economy, and further related work.