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The ETSI policy call for the IPR holder to 'undertake' to offer on a FRAND basis.
You may not be aware, but the term "undertaking" is a kind of very strong legal promise.
So the way to parse your assertion is that Qualcomm has "promised" to ETSI to "offer" on a FRAND basis. Which is the starting premise for the analysis I offer. So we start from the same place.
Nothing in the policy suggests that the user of the IPR is given the right to use the IPR without a pre-existing license.
Nokia (don't shoot the messenger) is arguing that the ETSI IPR Policy recognizes that the standard can't be implemented without a license. Just as the standard forces implementors to infringe upon patents, it also forces patent holders to grant licenses. It maintains a balance. This should be obvious.
If a standard forces implementors to infringe, without incorporating any counterbalance, then presto, the rights of all patent holders are magnified, and the remedies of the implementors are diminished to zero. Either infringe or be excluded from the market? In order for an implementor to consider entering the market, they require certainty of acquiring 100% of the necessary licenses. Having 99.99% of licensed patents and one injunction just won't do. I wouldn't find it surprising if an IPR policy of a standards body worked that way. Implicitly or explicitly.
It is so important that I think it is impossible that it would have been left unsaid.
Maybe it is so important that it goes without saying? I wouldn't show up for a dinner party just dressed in a thong but you can rest assured I don't get many invitations that say "no thongs please". Sometimes things are contextual.
If the Nokia interpretation of French law approach were to be correct, I daresay that the Nokia interpretation means that ETSI hoodwinked everyone involved with this surreptitiously inserted aspect of French law. I am certain that was not ETSI's intent.
Maybe the folks who founded ETSI thought it just was so obvious that it didn't need to be stated and were conversant enough with French Law (and probably being French Lawyers used to writing simple things so that they are obscure, implicit and hard to understand) that the way it's crafted makes it obvious to them? Maybe the only folks caught by surprise here were Qualcomm's legal beagles. It wouldn't be the first time they found themselves well out in left field.
Nokia is cooked. It's arguments reek of sophistry.
I don't know. In my experience, logic, law and sophistry are often difficult to separate.
The logic goes like this:
1. An offer to others is promised (ETSI contract).
2. By operation of French law (stipulation pur autrui), the promised offer thus is made
3. The offer made, having been accepted (implicit, by use), thus forms a contract.
4. The contract results in a license, that being the subject of the offer.
The flow of this logic is inescapable, no matter how undesirable the conclusions. So if we don't like the conclusion, we must break the logic, which in turn rests on the operation of the "stipulation pour autrui", or, in English, "promise in favor of a third party".
Here is a wikipedia reference: fr.wikipedia.org
En droit des obligations, une stipulation pour autrui est un contrat par lequel une partie appelée le stipulant, obtient d'une autre appelée le promettant l'engagement qu'elle donnera ou fera quelque chose au profit d'un tiers appelé le bénéficiaire. Ce dernier n'a pas besoin d'exprimer son consentement pour devenir créancier du promettant.
Nokia's brief claims: ...is an operation involving three parties in which the promisor commits to the stipulator to grant a right to one or more beneficiaries.... the promisor becomes contractually bound to the third party beneficiary when the third party beneficiary accepts the promise. Upon acceptance by the third party, a bilateral contract is formed between the promisor and the third party, with rights and obligations attaching to each.
This is a rather longish, but interesting read, to those who want to know the history and origin: search.sabinet.co.za
Here is a text from north of the border where they speak English and French (http://lsa.mcgill.ca/pubdocs/files/AdvancedCivilLawObligations/9-Khoury_AdvancedCivilLawObligations_-2004.doc
see page 25
I am not making this up, and it appears that Nokia is not making much of a stretch.
The weakest part of the argument to me is not the third party promise part, but the acceptance of the offer, and whether or not the offer is specific enough.
In order to have a contract, in the French, Delaware or any other legal system, we must find several things. A contract requires an offer by a willing and able party, made, for consideration, to the other party who accepts the offer. The result will be a contract. In order to be enforceable, a contract must also be specific enough with respect to the subject matter.
We have consideration (patents used, patents paid for). We have willing (voluntary undertaking). We have ability (Qualcomm's directors are not going to declare themselves unfit). What we need to find is "offer" and "acceptance".
Nokia's theory is that "offer" arises from the stipulation pour autrui. Or maybe it doesn't. Let's let the court rule on that, but from what I've clipped out, it seems pretty strong.
If Qualcomm hasn't made an offer, then at least it is contractually obliged to do so, and the offer must be for an irrevocable license on FRAND terms. A revocable license (e.g. one that evaporates when a SULA expires), or a license that is not on FRAND terms would not satisfy the stipulation pour autrui. Nokia would be entitled to seek specific performance in remedy (in other words, compel Qualcomm to make such an offer).
"acceptance", according to Nokia arises implicitly. This is so remarkably similar to Qualcomm's claim of implicit extension of the contract that it's hard to argue against, especially since Qualcomm does not have the counter argument of an agreement that requires acceptance to be in writing.
Finally, is it specific enough. Is "FRAND" good enough? We can have contracts which specify "market rates", thereby being bounded.
Do we have a contract or not? That's the issue. |
