This project was completed by Intensity. Intensity joined Secretariat on February 1, 2023.

Background

A holder of patents declared to the European Telecommunications Standards Institute (ETSI) as essential for 3G and LTE cellular standards extended an offer to multiple manufacturers of end-user devices to license the declared patents.  The manufacturers claimed that the patent holder’s licensing offer was not fair, reasonable, and non-discriminatory (FRAND).  In response, the patent holder requested that the U.S. International Trade Commission institute an investigation pursuant to the provisions of Section 337 of the Tariff Act of 1930 regarding the importation of the manufacturer’s accused products.

Our Analysis

Intensity evaluated whether the patent holder’s offers to license patents claimed to be essential for 3G and LTE functionality in end-user devices were FRAND.  Intensity analyzed relevant license agreements, the aggregate royalty burden for the 3G and LTE standards, and the patent holder’s economic contribution to each standard.

Intensity also evaluated multiple economic issues, including the impact on competition, consumers, and public health and welfare, relating to how a limited exclusion order and cease and desist order against the manufacturers may impact the public interest.  In addition, Intensity performed an evaluation concerning a bond amount upon importation of the accused products that would be sufficient to protect the patent holder from any injury during the 60-day Presidential review period pursuant to 19 U.S.C. § 1337(j).