On December 21, 2017, the U.S. District Court for the Central District of California released its long awaited Memorandum of Findings of Fact and Conclusions of Law in TCL Communications v. Ericsson. In a lengthy and carefully crafted decision, Judge James Selna sets forth some important new points regarding the calculation of fair, reasonable and non-discriminatory (FRAND) royalties for standardsessential patents (SEPs). Among other things, the decision offers a strong endorsement of “top down” methodologies for the calculation of SEP royalties, and makes significant use of the non-discrimination (ND) prong of the FRAND commitment in arriving at a FRAND royalty rate. Equally importantly, the case establishes that, for non-discrimination purposes, even low end vendors like TCL will be considered “similarly situated” to high end vendors like Apple, giving them the benefit of the rates that high end vendors can negotiate with SEP holders for far more expensive consumer products.
Contreras, Jorge L., TCL v. Ericsson: The First Major U.S. Top-Down FRAND Royalty Decision (December 27, 2017). Patently-O, Dec. 27, 2017.