The Rational Basis for FRANDly Courts Denying Injunctive Relief for SEPs Infringement

Abstract

Increasingly, courts across several jurisdictions are unwilling to grant injunctions in cases involving infringement of Standards-Essential Patents (SEPs), the teleological reason being the unfair/inequitable outcomes due to the patentee gaining an additional market power not conveyed by the patent. The courts by evaluating the equitable factors deny injunctions based on an underlying logic that since a patentee is purely interested in deriving royalty on his patents committed by way of Fair-Reasonable and Non-Discriminatory (FRAND) licensing offers he may be compensated monetarily in lieu of an injunction. However, availability of adequate remedy at law coupled with lack of irreparable harm due to existence of FRAND commitment is not the only way to explain the rational basis for lack of injunctive relief when viewed through a theoretical and conceptual prism. This note chronicles the legal construct of patent injunctions from a comparative law perspective and articulates that the rational basis for denial of an injunction for alleged infringement of SEPs is due to patent law’s inability to construe the ‘right to exclude’ and its relationship with SEPs protected market since it is fraught with conceptual and inherent definitional fallacies of assessment of ‘market power’ that go beyond the pale of patent law and policy.