Could (China-Based) Arbitration Save the FRAND Rate Setting Game?

This article aims to contribute to the debate on the practical solution to the stalemate repeatedly encountered in intellectual property disputes concerning FRAND rate-setting of standard essential patents (“SEP”). Digital transformation is underlining the importance of a well-functioning SEP/FRAND licensing system, which heavily relies on a sound conflict resolution mechanism. However, recent anti-suit injunction “wars” in cross-border SEP disputes have only led to judicial deadlocks and uncertainties that the regular court systems are not able to tackle. This is where arbitration can come into play thanks to its expertise, flexibility, and efficiency. This article’s key inquiry is whether the China arbitration regime is geared up to lead the charge in handling FRAND rate-setting disputes and even developing a trusted arbitration system endorsed by all stakeholders at home and abroad. To answer this question, this article examines five critical aspects of arbitration procedure in China: arbitration panels, confidentiality, interim measures, procedural orders (including discovery), and awards enforceability.

By Jing He, Annie Xue & Melissa Feng¹

I. INTRODUCTION

The recent fights among different courts around Anti-suit injunctions (“ASIs”) and anti-anti-suit injunctions (“AASIs”) and similar demonstrate how FRAND rate setting litigations could escalate.² ASIs and AASIs are so troubling as it directly touches on the issue of a state’s sovereig