Timothy Syrett and David Katz discuss the Fifth Circuit’s mistaken interpretation of the FRAND commitment in the case of Continental Automotive Systems Inc. v. Avanci LLC in an article published by Law360.
Excerpt: The U.S. Court of Appeals for the Fifth Circuit recently held in Continental Automotive Systems Inc. v. Avanci LLC that Continental lacked Article III standing to pursue antitrust claims.
Continental alleged that the defendants' refusal to offer patent licenses to component manufacturers breached commitments they made to standard-setting organizations, or SSOs, to license their patents on fair, reasonable and nondiscriminatory, or FRAND, terms.[1]
Specifically, the Fifth Circuit concluded that, as a component supplier, Continental was neither an intended third-party beneficiary of the SSO commitments nor had it suffered any injury because the defendant licensors offered licenses to Continental's customers so Continental was not being denied the opportunity to make sales.
The Continental decision presents an overly narrow reading of the FRAND commitment based on fundamentally misapprehending its nature and purpose. The decision purports to divine the limits of FRAND without even considering Continental's allegations about the actual language of the particular commitments at issue.
