The Availability of Injunctions in Standard-Essential Patent Licensing

Abstract

This paper examines the effects of recent deviations by German courts from the litigation framework established in the Huawei v. ZTE judgment by the European Court of Justice. The Huawei-ZTE judgment stipulates that injunctions are granted only if a patent holder's offer is FRAND and a potential implementer's counteroffer is not. In recent departures from this decision, courts have made injunctions more accessible by granting them if the implementer's offer is non-FRAND, regardless of the patent holder's initial offer. We find that this loosening of injunctions leads to higher equilibrium royalties and an increased risk of patent hold-up if there is sufficient uncertainty about the court's assessment of FRAND rates.