Monday, 3 February 2020

FRAND trial necessary to decide damages

In Koninklijke Philips NV v Asustek Computer Inorporation [sic] & Ors [2020] EWHC 29 (Ch) (17 January 2020), Marcus Smith J dismissed the defendant 's application in which it sought to get out of a trial (due later this year, listed for five days) to determine the terms of a FRAND licence. Asus had earlier been held to have infringed the Philips patent, which had been declared essential to a telecommunications standard. Asus had decided to consent to a permanent injunction and did not want a FRAND licence, so one can understand why they would rather like to save the trouble and expense of five days in court.

Asus proposed that the correct measure of damages would be the royalty rate in the FRAND licence (when that was settled) times the number of devices that infringed. Simple!

The judge did not see it that way, though. That could under-compensate Philips, which was probably why it appealed to Asus.

On the other hand, he didn't like Philips's argument either. They said that damages should take into account that the FRAND licence would be worldwide, covering all their relevant patents and all the companies in the Asus group. That, to the judge's mind, risked usurping the jurisdiction of other courts, and over-compensating Philips. Working out the damages was something that could only be done at the FRAND trial, so Asus's application failed.

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