Edited by Nari Lee, Niklas Bruun and Mingde Li
Chapter 14: European standards in Chinese courts – a case of SEP and FRAND disputes in China
AbstractFollowing the initial grant of a patent, the subsequent conclusion of contracts and acceptance of industry-specific customs and standards are adopted voluntarily by the relevant market participants. These agreements and practices are often a result of self-regulation by market participants. The activities of standard-setting organizations (SSOs), organisations that set standards for the use of standard essential patents (SEPs), are one such example of self-regulation. While patent rights are local, SSOs are often organizations consisting of multiple and heterogeneous participants. The guidelines, and other soft law policies, that SSOs voluntarily adopt are often likely to reflect the multi-territorial nature of the SSOs’ participants. When a dispute arises on the conditions set by SSOs over the assertion of SEPs, the problem is likely to include factual considerations that arise across various territories. As such, disputes surrounding SEPs force local courts to consider, not only local judicial standards and doctrines, but also those used elsewhere that may be relevant to understanding the complex facts of disputes. This chapter discusses how the Chinese courts interpret ‘fair, reasonable and non-discriminatory’ (FRAND) terms adopted by a European SSO; namely, the European Telecommunications Standards Institute (ETSI) The chapter explores in detail the dispute surrounding SEPs between Huawei and InterDigital in China, and analyses it in the context of similar cases surrounding SEPs and FRAND elsewhere. We argue that there seems to be a judicial globalization, whereby courts use foreign-developed principles in judging local disputes that have global commercial impacts. This is a result of the self-regulation of SSOs, and the Chinese court cases must be understood in the same vein. We conclude by arguing that this may be a next phase in the development of Chinese IP law, where local practices of governance have to be built after the initial norms have been transplant.
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