FRAND: From the courts to arbitration?

The HSF Kramer IP team has published an article on the increasing prevalence of arbitration in FRAND disputes in facilitating multi-jurisdictional awards - see From the courts to arbitration: The changing shape of FRAND disputes,  in the 22^nd edition of HSF Kramer’s publication, Inside Arbitration.

In our article we discuss how arbitration is relevant to FRAND disputes and the primary ways in which arbitration can arise in these disputes, as well as reviewing examples of its use, in particular the recent decision of the Court of Appeal in Acer v Nokia, which demonstrated the UK court’s interest in the use of arbitration to resolve multi-jurisdictional FRAND disputes (see our blog post here on this decision). 

In this decision, Lord Justice Arnold set out some of the benefits as the court perceived them of resolving FRAND disputes via arbitration (rather than litigation), including:

• Resolution through a single tribunal, rather than via multi-jurisdictional litigation. 
• Availability of global enforcement under the New York Convention, while national courts are territorially limited.
• As a result of the above factors, reduced risk of jurisdictional conflict. 
• Determination by an independent and impartial tribunal under established rules (in this case the ICC). 

These factors weighed in favour of Arnold LJ's finding that a licence offer subject to arbitration was FRAND. The Court of Appeal thus stayed the proceedings on the basis that there was no FRAND defence as it deemed the use of arbitration as part of offer by the SEP owner, Nokia, meant that Nokia had fulfilled its FRAND obligations (arbitration being consensual), leaving no FRAND defence available for Acer which could not therefore pursue UK court litigation to set interim (FRAND) licence rates.