1The Exercise of Essential Patents for Standards (II) (*)

In recent years, a number of large-scale patent disputes over the exercise of rights based on standard-essential
patents have been brought to courts worldwide. In Japan, a court made a noteworthy ruling that it constitutes anabuse of right for a patentee to claim damages without fulfilling the duty to negotiate in good faith despite its
FRAND commitment. Also in the United States, the report released by the Federal Trade Commission (FTC,2011) and the joint statement made by the Department of Justice and the United States Patent and Trademark
Office (DOJ and USPTO, 2013) addressed issues of the exercise of rights based on standard-essential patents and(F)RAND terms for licensing such patents. Amid such trends, there is a growing necessity in Japan as well todevelop debates on the exercise of rights based on patents.
In this research study, with the awareness of the situation mentioned above in mind, we surveyed domestic
legal cases and foreign systems to review the recent trends in terms of the exercise of rights based onstandard-essential patents. We also identified the present challenges while hearing opinions of patent professionals,
and examined in which situation the exercise of rights based on standard-essential patents are found to beinappropriate, by what kind of legal basis such inappropriate exercise of rights can be restricted, and what could be
the limits to such restriction under the existing law. This study report shows the outcome of the discussion on theexercise of rights based on standard-essential patents.

I

Introduction

users for the use of the standard technology.
However, after the standard has become popular,
the company that owns the selected standard
technology will have great market power. This ispossible because a prior commitment given by thecompany that has developed a standard
technology to waive its right to exercise
monopoly afterward (which means licensing thepatent for the technology under RAND terms)
will promote investment by users and diffusion of
the standard technology, and finally benefit thecompany itself.
Hence, in the case of a patent accompanied
by a commitment of licensing under RAND terms,
the patentee can do without a right to seek an
injunction as long as licensees pay royalties as
determined by their licenses. If a right to seek an
injunction is exercised based on such a patent, it
constitutes a unilateral breach of a priorcommitment by the patentee, and when viewed
from society as a whole, it would boost royalties
and deteriorate market competition.
This is not to say that the exercise of rights
based on standard-essential patents should beprohibited in principle. The existence of a right toseek an injunction may become an important
incentive for companies using the standard
technology to enter negotiation to obtain a licenseunder RAND terms beforehand, especially in thesituation where punitive damages are unavailable.
If licensing negotiations are held after the
diffusion of the standard, companies using thestandard technology might become less profitable

In recent years, a number of large-scale
patent disputes over the exercise of rights basedon standard-essential patents have been brought
to courts worldwide, such as Apple v. Microsoft,
Apple v. Motorola, Microsoft v. Motorola, Apple v.
Samsung, and so on. Actions to seek injunctive
relief based on standard-essential patents havealso taken place in Japan. In February 2013, a
court made a noteworthy ruling that it constitutes
an abuse of right for a patentee to claim damages
without fulfilling the duty to negotiate in goodfaith despite its FRAND commitment. Thus,
there is a growing necessity to develop debateson the exercise of rights based onstandard-essential patents.
The introductory chapter of this study report
gives an outline of the discussion of the basic
question of why restriction should be imposed ona claim for an injunction against the use of astandard
technology,
fromaneconomic
perspective. While a right to seek an injunction is
the most fundamental right vested in a patentright, it is a principle that holders of essential
patents for forum standards should make acommitment to license their patents under (fair),reasonable and non-discriminatory ((F)RAND)
terms. Why is it considered reasonable to makesuch a commitment? The economic value of astandard is basically determined not on the basisof the value of the standard technology itself but
by virtue of the value of investment made by(*) This is an English translation of the summary of a FY2012 Institute of Intellectual Property (IIP) research study report.

●

IIP Bulletin 2013 Vol.22

1 ●and incapable of paying royalties under RAND
terms.
To avoid this, courts will have to first
distinguish whether the licensing terms offered
by a patentee and rejected by companies using
the standard technology can be regarded as
RAND terms or whether the patentee
purposefully offers such licensing terms that arelikely to be rejected by user companies in an
attempt to obtain injunctive relief, and thendetermine whether or not to award injunctive
relief. To help courts make determination in thisway, efforts should be made to clarify RAND
terms.
Another challenge at present is the great
uncertainty in terms of the recognition of patents
as standard-essential patents and the validity ofsuch patents. It will also be an important task to
improve the quality of patents to be granted andto be recognized as standard-essential patents.
(Sadao NAGAOKA)

consumers.
For this reason, there may be circumstanceswhere imposing restriction on the exercise of aright to seek an injunction based on astandard-essential patent would rather be
conducive to the development of industry, andsuch restriction should not be precluded only byreason of the nature of a patent, such as that apatent right is a quasi-real right or a patent isgranted as a result of examination by the patentoffice. The research committee discussed thisissue while looking back at the primary purposeof the patent system, i.e. contributing to thedevelopment of industry, and reached a consensus
that it is reasonable to restrict the exercise of aright to seek an injunction based on astandard-essential patent if it goes against said
purpose of the patent system.
However, diverse opinions were stated bycommittee members as to what policy measures
should be taken to this end, and opinions werealso divided as to whether or not it is necessary
to make a new law, and if it is necessary, whatkind of law should be made. It may be possible toimpose restriction on the exercise of a right toseek an injunction to the extent not detrimental
to the development of industry, by way of suchmeans that are available under the existing law,
namely, the fulfillment of a patent declaration
including succession to a FRAND commitment,
restriction on injunctive relief through theinterpretation of Article 100 of the Patent Act or
the application of the abuse-of-right doctrine,
restriction on injunctive relief through theenforcement of the Antimonopoly Act, andgranting of a compulsory license. However,,judicial precedents are not yet adequate and therule-making process for essential patents is stillongoing at standard-setting organizations. At
present, the scope and limits of these means is
not clear enough.
In view of these circumstances, the researchcommittee discussed possible policy options,
including legislative measures in relation to theexercise of rights based on standard-essential
patents. Opinions of committee members can bebasically organized into several proposals,
although the details varied.
Some members proposed to make a law topreclude, to the extent necessary, the exercise of
a right to seek an injunction in a situation wheresuch exercise does not contribute to thedevelopment of industry. Others went in a
direction away from imposing restriction andexpressed an idea of coping with the exercise of

Ⅱ Discussion in This Research
Study, and the Outcome
The role of a patent system is to contributeto the development of industry through thepromotion of inventions, which is aimed at under
the Patent Act. Considering that a patent right is
an exclusive and monopolistic right, restricting
the exercise of a right to seek an injunction,
which could affect the substance of a patent right,
requires a cautious stance. Nevertheless, thesituation of demand for strong protection ofpatent rights resulting in impeding thedevelopment of industry should be avoided.
Standard-essential patents are indispensable
for various commercial reasons, such as enabling
connection between devices, reducing researchand development costs, and diffusing products
overseas. However, it is often the case that as
many as several hundred to several thousand
essential patents are incorporated in one standard,
and it is difficult to search and identify all suchpatents. At the same time, the unavailability of
only one patent from among those several
hundred to several thousand essential patents
involved in a standard technology could hinder
the use of the technology as a whole. Therefore,
the exercise of a right to seek an injunction on
accountoftheinfringementofastandard-essential patent could adversely affectnot only the management of the company alleged
as infringing the patent but also the diffusion of
the standard, and ultimately the interest of●

2 ●IIP Bulletin 2013 Vol.22

rights based on standard-essential patents by
granting a compulsory, non-exclusive license
based on a FRAND commitment. Theinterpretation of Article 100 of the Patent Act wasalso mentioned as a means to avoid the difficultyin legislation. These opinions take the same linein that they all intended to restrict the exercise of
a right to seek an injunction based onstandard-essential patents with the aim ofachieving the purpose of the Patent Act, i.e.
development of industry, and they basically do notconflict with one another.
The committee also reached a consensus
that a right to seek an injunction vested in apatent right is not of absolute nature but it should
inevitably be restricted if the exercise thereofgoes against the purpose of the patent system,
which is to contribute to the development ofindustry. We recommend that the issues arising in
relation to the exercise of a right to seek an
injunction, including the exercise of rights basedon standard-essential patents, should be further
discussed broadly in industrial, academic andgovernmental sectors based on the findings givenby this report, and such discussions should bereflected in formulating effective policy, including
exploring the possibility of legislation.
(Secretariat)

restriction was allowed to be imposed on theexercise of a right to seek an injunction based ona patent by reason that the patent is astandard-essential patent. The interview results
are summarized in the main body of the report.
Although these interviews were conducted withsome member companies of the tradeassociations of the respective industries, thesummary of the interview results does notnecessarily represent the opinions of theassociations, but contains opinions of theindividual respondent companies.
(Secretariat)

Ⅳ Overseas Survey
1

The Supreme Court judgment on eBay in2009 reconfirmed the rule that whether to award
injunctive relief for patent infringement should bedetermined by what is generally called the“four-factor test” ((1) an irreparable injury, (2)inadequacy of monetary remedies, (3) balance ofhardships between the parties, and (4) public
interest). After this judgment, about one-fourth of
district court decisions rejected a claim for
injunctive relief, and in particular, injunctive relief
is rarely awarded when the patentee is a patentassertion entity (PAE). On the other hand, it issaid to be generally easier for injunctive relief tobe awarded if the patentee and the infringer are in
a competitive relationship. However, even in suchsituation, strict proof of causation between theinfringement and the injury may be required in
the course of proof of an irreparable injury, and in
actual cases, some court decisions rejected aclaim for injunctive relief on the grounds that thepatentee fails to give specific proof that a
particular function achieved by the patented
technology would induce demand. Meanwhile, theInternational Trade Commission (ITC) does not
apply the four-factor test and it basically issues an
exclusive order when it finds patent infringement.
In cases where whether to award injunctive
relief based on a standard-essential patent isdisputed, some recent court decisions haverejected this claim, especially when the patentee
has given a FRAND commitment for the patent
beforehand, by applying different approaches. One
approach is to consider that by virtue of the
FRAND commitment, an agreement has been
formed between the patentee and thestandard-setting organization for the benefit of a

Ⅲ Domestic Survey
As the basis for an analysis of the influenceoftheexerciseofrightsbasedonstandard-essential patents on the development ofindustry, we reviewed domestic legal cases
disputing the exercise of rights based onstandard-essential patents in the information andtelecommunications industry. These cases show
some aspects of the existing problems with theexercise of rights based on standard-essential
patents, including: the exercise of rights based on
patents by transferees against highly public, andcapital-intensive communication infrastructuredevelopment projects; submission of relatively
high damage claims; exercise of rights based on
patents by parties who do not use the patented
technology or who have shut down the businessthat used the patented technology; FRAND
commitment; and failure of timely disclosure ofpatents
inthestandardization
process(concealment of patents).
We arranged interviews targeting someindustries, namely, electronics/information andtelecommunications,
pharmaceuticals,
andautomobiles, to ask about what would happen if●

IIP Bulletin 2013 Vol.22

Analysis of the Current Situation in the
United States

3 ●third party, and the infringer is entitled to alicense under FRAND terms as a third-party
beneficiary. The other approach is to consider
that just by giving the FRAND commitment, thepatentee is deemed to have implicitly admitted
that royalties would be adequate compensation.
Based on either approach, the patentee would
sustain no irreparable injury and receive adequate
remedies from monetary compensation. It is also
expected that courts will make determination on
details of royalties that meet FRAND terms.
However, the situation is still fluid because thecourt decisions currently available are mainly
those issued by district courts.
(Ichiro NAKAYAMA)
2

relation to the four-factor test suggested by theSupreme Court in the eBay Case. Concerning (1)irreparable harm and (2) inadequacy of money
damages, courts should not presume irreparable
harm based on the patentee’s use of the patent,
but should take into account whether thepatentee primarily engages in technology transfer
through licensing in a competing technology
market. Concerning (3) balance of hardships
between the parties, courts should consider, as
the patentee’s hardship, whether the invention isa minor component for which acceptable
alternatives are available, and should also
consider, as the infringer’s hardship to bebalanced against the former, whether the
infringer is facing hold-up. However, courts
should reject the infringer’s defense if it “elects”
to infringe by copying a patented invention withknowledge of the patent. Concerning (4) public
interest, courts should take into considerationthat in circumstances involving hold-up based ona patent for a minor component, an injunction
could unduly raise product prices for consumers
and deter innovation.
While the theoretical analysis shown by the
FTC Report is full of implications, we should takenotice of the fact that its recommendations
regarding the calculation of lost profits andlimitation of a reasonable royalty to acompensatory amount are premised on the US
patent system, which allows an award of treble
damages as a means to prevent willful
infringement.
(Yoshiyuki TAMURA)

Patent System Reform Suggested in the2011 FTC Report: Patent Remedies

The report released by the Federal Trade
Commission titled “The Evolving IP Marketplace:
Aligning Patent Notice and Remedies with
Competition” (hereinafter referred to as the“FTC Report”) is worthy of note as it points out
problems that have occurred in some industries
due to the US patent system and recommends
system improvements. In the FTC Report,
transactions “which occur after the user of thetechnology has invested in its independent
invention and development, without input fromthe patentee” are referred to as “ex post patenttransactions” and distinguished from ex ante
patent transactions. The report considers that ex
ante patent transactions encourage innovationand competition, whereas ex post patenttransactions inhibit the same. However, according
to its analysis, in some fields, such as IT, thedecline in the patent system’s “noticefunction”—making public what is covered by apatent and what is still in the publicdomain—results in unduly encouraging ex post
patent transactions. From this standpoint, thereport recommends direct improvements to thepatent notice and alignment of patent remedies
such as injunctions and damages that are to be
granted to prevent the situation from worsening
when the patent notice does not function well.
Specifically, the FTC Report states that for
proper balance between the patent system andcompetition policy, damages should align with theeconomic value of the patented invention, and toachieve this, damages should be designed toreplicate the market reward that the patent holder
would have earned absent infringement. As for an
injunction, it provides recommendations in

3

Outlines of Foreign Systems

We reviewed patent remedies available inforeign countries, namely, South Korea, China,
the Netherlands, and Germany, focusing on theprinciple for the exercise of a right to seek an
injunction, the possibility (requirements) for
restricting injunctive relief, monetary damages tobe awarded when a claim for injunctive relief isrejected, and special rules for the exercise ofrights based on standard-essential patents.
In South Korea, injunctive relief is awarded
based on a finding of patent infringement, as inJapan. However, recent court decisions recognize
the necessity to impose restriction on thepatentee’s rights based on a standard-essential
patent if the patentee has given a FRAND
commitment for the patent, in light of the purpose
and principle of the patent law.
In China, based on the Supreme Court’s●

4 ●IIP Bulletin 2013 Vol.22

guiding opinions, there may be cases where
injunctive relief against infringement may not beawarded or a royalty payment order may be
issued instead of injunctive relief by reason of
public interest or impossibility to stop
infringement. According to the Supreme Court’s
judicial interpretation (2008, Min San Ta Zi No. 4),
the patentee who has participated in the draftingof a standard shall be deemed to have granted alicense to a party who uses the standard
technology, and as a result, such use of thetechnology does not constitute infringement,
while the patentee is entitled to claim a royalty
from the user at a rate that is lower than theordinary royalty rate.
In the Netherlands, injunctive relief isawarded based on a finding of patent infringement.
However, if the patentee has given a FRAND
commitment but shows an unreasonably passive
attitude in bona fide negotiations to decide
FRAND terms, exercises the patent right during
the licensing negotiations, or threatens to takelegal action against the other party in an attempt
to gain an advantage during the licensing
negotiations, such behavior of the patentee can beconsidered to be an abuse of right.
In Germany, injunctive relief is awarded
based on a finding of patent infringement, as inJapan. With regard to standard-essential patents,
the German system has a unique feature in thatthe user of the patented technology may claim alicense to be awarded under the German Act
Against Unfair Competition as defense against
the patentee’s claim for injunctive relief.
However, in order to claim such a license, theuser of the technology is required to apply for alicensing agreement unconditionally and to fulfill
its obligation under the licensing agreement
before the agreement is concluded.
(Secretariat)

In this respect, challenges arising from standard
technologies in such progress and fromstandard-essential patents will have a great
impact on industrial sectors.
Standard-essential patents are peculiar in thefollowing five aspects.
(i) Number of rights: Depending on thetechnical theme, a standard technology could
involve one thousand or more patents.
Dealing with such a large number patents isbeyond the extent originally expected for thepatent system.
(ii) Value of rights: There is concern that
individual patents involved in a standard
technology might be regarded as having anequal economic value because they are all
essential to the standard. This could cause a
gap between the presumed value and thetrue value of the technology or patent.
(iii) Meaning of being “essential”: Some patents
are technically avoidable but commerciallyunavoidable. When a patented technology is
avoided, compatibility cannot be assured andthe commercial value would be lost.
(iv) FRAND commitment: By making it anobligation for a patentee to give thiscommitment, companies using the patented
technology can be relieved of anxiety when
the technology is adopted as a standard. In
this respect, the use of a FRAND
commitment promotes and accelerates
standardization activities. The important
point is that the patentee should grant alicenseunder
fair,reasonableandnon-discriminatory terms and waive its
monopoly and the right to seek an injunction
based on the patent.
(v) Existence of outsiders: Some patents thatare essential to a standard may be owned byoutsiders, who do not use the patents on
business terms and therefore do not join thestandardization process.
In the United States, the same problems andopinions as those existing in Japan came tosurface, and the judiciary committees of theupper and lower houses held public hearings fordiscussion.
Also,
the
International
Telecommunication Union (ITU) has shifted its
stance from regarding the issue of FRAND terms
as a potential problem to regarding it as asurfacing problem and held discussion repeatedly.
Restriction on a right to seek an injunction
andreasonableroyaltyinrelationtostandard-essential patents represent big problems
for industrial sectors. In view of the peculiarities

Ⅴ Practices
at
Home
and
Abroad—Opinions from PatentProfessionals
As Japanese companies carry out businessactivities on a global and borderless scale, they
will change their vertically-integrated businessstructure to a horizontal division of labor, andaccordingly, chained business models will bepromoted and the standardization of interfaces
will be facilitated. In data transmission andcommunicationsindustries
inparticular,
standardization will continue to make progressalong with the development of new technologies.
●

IIP Bulletin 2013 Vol.22

5 ●of standard-essential patents explained above, if
too much emphasis is placed on protection ofpatent rights and the development of a desirable
industrial society is obstructed as a result, this is
not what is originally intended by the patent
system. As problems actually exist in the patent
system, it is now necessary to take somemeasures for system improvement, including
legal reform. Although this may be a toughchallenge, we would expect a forward-looking
response to be taken.
A possible solution may be thoroughenforcement of the obligation to give a FRAND
commitment or licensing through a patent pool,but in reality, there are many challenges toovercome. We would expect courts to fully
understand the peculiarities of patents that are
essential to standard technologies and makeappropriate decisions in infringement cases. At
the same time, there is a call from industrial
sectors for a bold legislative step to deal with aswelling number of standard-essential patents,
such as providing under the Antimonopoly Act
that a standardization entity may determine
licensing terms in advance through a patent pool.
We hope that many people in Japan willrecognize the problems and challenges in relation
to standard-essential patents while taking into
account the original purpose of patents andhearing opinions from legal professionals, so thatJapan will lead other countries in taking
legislative measures including legal reform, suchas promoting the use of the compulsory license
system.
(Hiroshi MIYAUCHI)

use, which is generally referred to as “patenttrolling.” After a technology is set as a standard,
the party who holds a patent that is essential to
the standard files an action to seek an injunction
against others who produce and sell products
using the standard, while refusing to grant alicense or claiming a large amount of royalties.
With regard to the patentee’s refusal oflicensing, while the four-factor test indicated by
the Supreme Court in the eBay case functions as
a test for determining whether to award
injunctive relief in the Untied States, there is nosuch judicial precedent in Japan that shows a clear
test. As for the patentee’s claim for heavy
royalties, a RAND commitment required by thestandard-setting organization has not yet been
fully recognized as legally binding, and what ismore, it cannot be an effective defense against
holders of standard-essential patents who do notjoin the standardization process.
In the existing Civil Code, it is provided that
“No abuse of rights is permitted” (Article 1,
paragraph (3)). In order to apply this provision to
the exercise of a right to seek an injunction basedon a patent right, it is required for such exerciseof the right to be contrary to the purpose of the
Patent Act, which is to contribute to thedevelopment of industrial society, and to beunacceptable in society in light of thecircumstances of the case. In past cases, courts
rarely restricted the patentee from exercising aright to seek an injunction by applying thisprovision on an abuse of rights. Hence, thisprovision is not enough to solve the problem.
Then, how about a cease and desist order issued
by the Fair Trade Commission under the
Antimonopoly Act? In order to issue this order
against the exercise of a right to seek an
injunction based on a patent right, there is still ahigh hurdle to overcome after meeting theconditions of unfair trade practices, such as
trading on restrictive terms and abuse of one’s
dominant bargaining position, which is partly
because Article 21 of said Act provides that theprovisions of this Act shall not apply to “such acts
recognizable as the exercise of rights” under the
Patent Act and other intellectual property laws.
With regard to the system of granting acompulsory non-exclusive license for public
interest (Article 93 of the Patent Act), it ispointed out that even when a standard involving apatented invention is found to be necessary forthe public interest, the product in dispute using
the patented invention is not always found to benecessary for the public interest. Because of this,

Ⅵ Restriction on the Exercise of a
Right to Seek an Injunction Basedon a Patent, and Legislative
Measures
A patent right is a monopolistic andexclusive right, and a patentee may claim
damages against a third party who uses thepatented invention without authorization, andmay also seek an injunction to stop such use by
the third party pursuant to Article 100 of the
Patent Act.
However, it has been raised as an issue
whether it is always permissible for the patentee
to exercise a right to seek an injunction andthereby make it impossible for any third party to
use the patented invention.
A typical example of this issue is theexercise of rights based on patents that are not in●

6 ●IIP Bulletin 2013 Vol.22

and in combination with the influence of theJapan-US Agreement (by means of the letter
dated August 16, 1994), there has not yet been
any case in which a court has granted acompulsory license.
Under such circumstances, revising Article
100, paragraph (1) of the Patent Act may be theonly effective legal measure to be taken to solve
the problem.
A patent right is a private-law right granted
under the Patent Act. Nevertheless, the Patent
Act grants a monopolistic and exclusive right to apatent applicant in order to protect such right andthereby achieve the primary purpose of the Act,
which is to contribute to the development ofindustry (Article 1). Therefore, although a patentright is a private right, it is poorly justified toallow the patentee to exercise a right to seek an
injunction in the pursuit of its own economic
profit even in the situation where such exerciseof the right would have a significant impact on
people’s lives and impede the development ofindustrial society.
As a solution to this problem, we would
propose that a provision on the restriction on theexercise of a right to seek an injunction should be
inserted in the Patent Act, following the existing
provisions of Article 100, paragraph (1). This
provision on restriction should be drafted fromthe perspective of indicating a simple and clear
criterion that allows flexible interpretation tosome degree, while making reference to the eBaydecision under the US law.
(Minoru TAKEDA)

amount to a considerable imbalance in interest
between the parties; (iv) other reasons for which
an injunction should be restricted. Among these,
type (iv) raises a problem in particular. On thispoint, helpful reference can be obtained from the2011 FTC Report, which recommended imposing
restriction on the exercise of a right to seek an
injunction in some cases from the perspective ofpromoting “ex ante patent transactions” anddeterring “ex post patent transactions.”
Specifically, an injunction may be restrictedexceptionally in cases where the patented
invention is used only for a small portion of theaccused product and it is inseparable from said
product, and therefore an injunction is excessivein scale in comparison with the degree ofcontribution of the patented invention to theaccused product, while at the same time thepatentee can be sufficiently compensated for
infringement by monetary damages, provided thatthe infringer has infringed the patent due to acause not attributable thereto.
In Phase 2, if restriction on an injunction issought (i) for the public interest, (ii) on account ofa breach of the principle of good faith or doctrineof estoppel, or (iii) because an injunction could
amount to a considerable imbalance in interest
between the parties, it may be possible to impose
restriction in accordance with the principle ofabuse of rights under the Civil Code, without
making any revision to the existing Patent Act. If
so, in the context of legislative reform, we should
discuss whether or not it is necessary to revise
the existing Patent Act in order to restrict a rightto seek an injunction for the fourth reason, that is,from the perspective of deterring ex post patenttransactions, and if it is necessary to do so, weshould further discuss to what extent such
restriction should be written in detail in law. In
this process, we should also take into
consideration enforcement costs and politicalcosts for codifying the restriction.
(Yoshiyuki TAMURA)

Ⅶ Recommendations on Imposing
Restrictionon
Injunctions
against Patent Infringement,
through Legal Interpretation orLegislative Reform
When trying to impose restriction on theexercise of a right to seek injunction against
patent infringement through legal interpretationor legislative reform, it is necessary to discuss
this issue by dividing it into two phases: the firstis considering in what cases the exercise of aright to seek an injunction should be restricted,
and the second is considering how such
restriction should be written in law.
In Phase 1, at least four different types ofreasons can be thought of for restricting theexercise of a right to seek an injunction: (i) public
interest; (ii) breach of the principle of good faithor doctrine of estoppel; (iii) an injunction could

Ⅷ ResearchandDevelopment
Agreements and Standardization
Agreements under the “Guidelines
on the Applicability of Article
101 of the Treaty on the
Functioning of the European
Union to Horizontal Co-operation
Agreements”
The European Commission adopted a revised
version of the Guidelines on the Applicability of●

IIP Bulletin 2013 Vol.22

7 ●Article 101 of the Treaty on the Functioning of
the European Union to Horizontal Co-operation
Agreements as of December 14, 2010. The majorrevisions to the guidelines included the creationof a new chapter on information exchange andsignificant changes to the chapter onstandardization agreements. In particular, thechapter on standardization agreements introduces
the “safe harbor” thresholds within which theEuropean Commission will not find problems withstandardization agreements, and provides anadditional
detailed
explanation
regardingstandardization agreements that fail to meet thethresholds, so that business entities can assess
whether their agreement meets the thresholds. A
patent for a technology adopted as a standard, orin other words, a patent that is indispensable forusing the standard is referred to as a (standard-)
essential patent. Along with the accumulation oftechnological developments and expansion of
networks, in some cases, several hundred toseveral thousand essential patents are involved in
one standard. In such case, it often happens that apatent holder who has initially engaged in thedrafting of a standard while concealing its
ownership of the patent later exercises the patentright after the standard is set. This practice,which is called “patent hold-up,” has been
recently recognized as a problem. After astandard is set, it is difficult for many companies
that have been working toward making productswith the use of the standard technology to adopt atechnology other than the standard technology inlight of the special investment that they havealready made. In such situation, the patentee
might claim a large amount of royalties against
these companies by leveraging a right to seek an
injunction based on its essential patent, placing
those companies in a competitive disadvantage.
To avoid this, the revised Guidelines provide that
before setting a standard, a standard-settingorganization may require its member companies
to disclose the maximum royalty rate that theywould charge for their intellectual property rights
if these rights are incorporated in a standard. This
framework
will
enablestandard-settingorganizations and industrial sectors to selecttechnologies that they will set as standards, basedon the information disclosed in advance regarding
the quality and price of the technologies, and help
to reduce the number of patent hold-up incidents.
The recent revision to the Guidelines clarifies
that such a framework basically does not conflictwith EU competition law. In this study report, we
examined the provisions of the Guidelines

focusing
onresearchanddevelopment
agreements and standardization agreements, witha view to consider the relationship between theantimonopoly law and intellectual property rights.
(Shuya HAYASHI)(Researcher: Tsuyoshi UCHIDA)●

8 ●IIP Bulletin 2013 Vol.22