🎯 Strategic considerations for defending litigation over standard-essential patents
On October 10, 2024, Yi Yu, Frank DeCosta, and Jeff Berkowitz from Finnegan, Henderson, Farabow, Garrett & Dunner LLP discussed strategies for defending against litigation involving standard-essential patents (SEPs). They emphasized the importance of conducting a thorough investigation and developing a well-structured plan. As the use of multimedia standards expands across various applications in smartphones, computers, and automobiles, litigation over SEPs has been increasing.
A SEP implementer sued for infringement in U.S. courts, often by non-practicing SEP holders, must act swiftly and devise an effective defense strategy. By conducting a thorough investigation and developing a well-thought-out plan, the defendant can often find opportunities to strengthen their position and build a compelling case.
A standard-essential patent (SEP) protects an invention that is essential for implementing a specific technology standard. Standard-setting organizations (SSOs) typically require their members to license their SEPs on fair, reasonable, and non-discriminatory (FRAND) terms to ensure public access to the technology. However, some SEP owners did not participate in the standard-setting process and, therefore, are not bound by FRAND obligations.
Litigation over SEPs often arises when the SEP owner and the SEP implementer fail to agree on a licensing rate for the patents. Typically, the SEP owner initiates the litigation by claiming infringement, though in some cases, the implementer may file suit, accusing the owner of failing to comply with its FRAND obligations.
SEP litigation not only involves claims of infringement and patent invalidity but also encompasses other complex issues. These may include the SEP owner’s compliance with the standard-setting organization's requirement to declare the patent as essential, the obligation to offer a license under FRAND terms, and determining an appropriate FRAND rate for the SEPs.
One of the first issues a defendant must investigate is whether the asserted SEP is truly essential to the relevant standard or if it covers optional features that the accused products may not implement. Some standards, like the 5G cellular standards, include features that are not mandatory for compliance. If the plaintiff's allegations rely solely on the standard, and the asserted SEP pertains to optional features not present in the accused products, the defendant may be able to quickly dismiss the litigation by demonstrating that no patent infringement has occurred.
