jorge l. contreras s.j. quinney college of law university of utah november 21, 2014
TRANSCRIPT
UNIVERSITY OF TORONTO 3RD ANNUAL PATENT COLLOQUIUM
MARKET RELIANCE and FRAND Commitments
Jorge L. ContrerasS.J. Quinney College of LawUniversity of Utah
November 21, 2014
2
Patentees make FRAND Commitments to:
Reassure the market No hostile intentions No hold-up
Induce the market To adopt a standardized technology To utilize an open platform
3
Desired Result(s)
Broad market adoption of common technology platforms
Interoperability Network effects
5
Enforcement?
We should want to enforce patent pledges because:
Market benefits (instrumentalist)
Reliance (fairness)
Promise (morality)
6
Current Enforcement Theories
A. Contract (common law)
B. Promissory Estoppel
C. Antitrust
D. Equitable Servitude
8
Problem: Non-contractual Commitment Structures
1. Multilateral Agreement
2. Membership Agreement
3. Bylaws/Policy4. Letter of Assurance5. Voluntary Declaration,
SDO6. Voluntary Declaration,
Non-SDO Regulatory Proceedings Press Release
10
B. Equity and Promissory Estoppel?
Unilateral promise can be enforced if reasonably and detrimentally relied upon
BUT actual reliance must be shown
11
C. Antitrust
Monopolization Market power Exclusionary conduct
(deception)
Exclusion/Essential Facility
Section 5 (unfair methods of competition)
13
A New Enforcement Theory: Market Reliance
Market Reliance =
Promissory Estoppel +
Presumption of Reliance
Contreras, A Market Reliance Theory for FRAND Commitments and other Patent Pledges, __ Utah L. Rev. __ (2015 forthcoming)
14
Market Reliance defined
Promissory Estoppel Unilateral promise will be enforced if intended
to be relied upon and made to the marketplace at large
Without a requirement of actual reliance Presumption of reliance if promise is made to
the “marketplace” Similar to “fraud on the market” theory under
Federal Securities Law
15
Inspired by “Fraud on the Market”
Efficient Markets Hypothesis:In an efficient capital market, all material information is reflected immediately in price.
Reliance on false statements by market participants is presumed
Basic v. Levinson (US 1988)
16
Market Reliance: Benefits
Eliminate legal fiction of contract framework
Enhance enforceability of “non-contractual” statements
Remove distinction between FRAND and other Pledges
Reduce risk from patent transfer
17
Challenges
“Fraud on the Market” theory challenged, but survived (Halliburton v. Erica P. John Fund (US 2014))
Entrenchment of Contract theory in judicial decisions
Thank you!
Jorge L. ContrerasUniversity of UtahS.J. Quinney College of LawSalt Lake City, [email protected] page: http://ssrn.com/author=1335192