Richard Epstein, David J. Kappos, Dec 20, 2013
At present, the traditional informal mechanisms for setting FRAND rates for SEPs have come under extensive attack by the Federal Trade Commission and elsewhere, from those who believe more limited damages and less frequent injunctions offer the best path to resolving disputes over Standard Essential Patents. In this article we take issue with those conclusions. We begin with an explanation of how a damage system for ordinary contract disputes does not typically rely on the three standard measures—expectation, reliance, restitution—for resolution, but uses liquidated damage to deal with the scenario where a defendant seeks to “out its own agreements. We argue that the techniques that work generally in contract law offer strong confirmation of the traditional rules of damages and injunctions now under wide assault…
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