Q9. What is the usual process for negotiating a SEP licence?
Once a SEP owner has approached an implementer for a licence, a first step the implementer should take is to seek legal advice to ensure that it fully understands its situation. It should then engage in negotiations with the SEP owner.
The SEP owner should then present a licence offer, and in turn if the implementer does not agree to the offer it should present a counter-offer. Both parties should provide reasons for their respective offers. This exchange should conclude in a FRAND licence. However, in the case of a dispute, this may be resolved either by arbitration or a court decision.
The process may also involve both parties entering into a non-disclosure agreement (NDA) to enable them to exchange confidential information. The SEP holder may provide a sample set of claim charts, which outline how some of its patent claims read onto the relevant standard. This may lead to the parties discussing the technical value of the SEPs. In some cases, the SEP owner may own hundreds or thousands of SEPs, hence these discussions will focus on just some of the SEPs. There may also be an exchange of commercially sensitive information, such as sales forecasts, to enable the parties to reach a licence that is FRAND for the particular implementer.
Q10. How should the parties conduct themselves?
The process outlined above is a rough guide only. The law on the conduct of a FRAND licence negotiation is evolving and there may be differences between jurisdictions / countries. However, most courts have made clear that both parties should act in good faith during the negotiations and without unreasonable delay towards concluding a FRAND licence. Equally, similarly situated licensees should benefit from similar terms to ensure no discrimination between them.
