Opinion ID: 4461580
Heading Depth: 2
Heading Rank: 1

Heading: ETSI and the FRAND Obligation

Text: Ericsson is a member of the European Telecommunications Standards Institute (ETSI), which is the international standard-setting organization responsible for developing 2G, 3G, and 4G standards. For a patent to become essential to an ETSI standard, ETSI members first submit declarations identifying which of their patents or applications may become essential to the standard. ETSI’s acceptance of a member’s patent as an SEP forms a contract between ETSI and its members. Together, the 2G, 3G, and 4G standards incorporate the technologies claimed by thousands of SEPs, including over one hundred owned by Ericsson. Because interoperability requires the practice of these standards, owners of such SEPs wield significant power over implementers during licensing negotiations. To offset this power imbalance and promote interoperability, the contract imposes an obligation to license, referred to here as the “FRAND obligation,” on ETSI members. J.A. 35. As defined by § 6.1 of the ETSI Intellectual Property Rights Policy, this obligation requires members to be “prepared to grant irrevocable licenses” to implement their SEPs on FRAND terms and conditions to implementers. J.A. 36. Because this obligation is intended to benefit implementers of ETSI standards, the implementers may assert their rights created by the FRAND obligation as third-party beneficiaries. Id. 6 TCL COMMC’N TECH. v. TELEFONAKTIEBOLAGET LM TCL manufactures mobile devices that implement these ETSI standards so that they may interoperate in the mobile communications environment. As a member of ETSI, Ericsson is bound by its contractual FRAND obligation to ETSI to be prepared to offer TCL FRAND-complaint terms to license its SEP portfolio.