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<\/figure><\/div>\t\t\t\t\t1. What is FRAND? Understanding the Three Pillars<\/h2>\n\n\n\n
FRAND is a voluntary commitment made by a patent holder to a standard-setting organisation (such as ETSI or IEEE), declaring: “If my patent is adopted into the standard, I will license it to anyone under the following conditions.”<\/p>\n\n\n\n Once a technology becomes the industry “standard,” manufacturers have no choice but to adopt it to build competitive products. This is known as technological “lock-in.”<\/p>\n\n\n\n If a patent holder exploits this lock-in by demanding exorbitant licensing fees under threat of an injunction, it is called hold-up<\/strong>. Conversely, if a licensee uses FRAND as a shield to unreasonably delay negotiations or evade paying fair royalties altogether, it is known as hold-out<\/strong>.<\/p>\n\n\n\n FRAND serves as the cornerstone of good faith in the intellectual property ecosystem, balancing these competing behaviours to maintain market equilibrium.<\/p>\n\n\n\n What concrete steps define a “good faith” (FRAND) negotiation?<\/p>\n\n\n\n The Court of Justice of the European Union (CJEU) answered this in its landmark 2015 Huawei v. ZTE<\/strong> ruling, which remains the global benchmark for courts worldwide. Similarly, Japan’s Ministry of Economy, Trade and Industry (METI) introduced its “Guidelines for Licensing Negotiations Involving Standard Essential Patents” in 2022. These frameworks establish four standard negotiation steps:<\/p>\n\n\n\n If an agreement cannot be reached, the implementer must continue to demonstrate willingness by providing security (such as putting royalties in escrow) or suggesting third-party arbitration. Deviating from this framework significantly raises the risk of being labelled an “unwilling licensee” by a court of law.<\/p>\n\n\n\n For years, Japanese intellectual property practice relied on the Intellectual Property High Court’s 2014 Grand Panel decision (Apple v. Samsung<\/em>). The consensus was that as long as an implementer remained willing to negotiate, a patentee’s request for an injunction would be rejected as an abuse of rights.<\/p>\n\n\n\n That long-standing assumption has now been completely overturned.<\/p>\n\n\n\n On June 23, 2025, the Tokyo District Court issued Japan’s first-ever product injunction based on SEP infringement in Pantech v. Google<\/em> (targeting the Pixel 7 smartphone).<\/p>\n\n\n\n The court found Google to be an unwilling licensee based primarily on its conduct after the court intervened<\/strong>, rather than during initial discussions. Even after the court issued a settlement recommendation, Google failed to disclose critical information necessary for calculating royalty rates without providing a justifiable reason. This failure served as the primary basis for granting the injunction.<\/p>\n\n\n\n As a result, Japan’s judiciary has officially aligned with the rigorous standards of Germany and the Unified Patent Court (UPC), where the sincerity of a party’s negotiation conduct is strictly scrutinised.<\/p>\n\n\n\n In response to this judicial shift, the Intellectual Property Division of the Tokyo District Court (TDC) released its “Procedural Protocol for Patent Infringement Lawsuits Involving Standard-Essential Patents” in January 2026. Designed to streamline global patent disputes, the framework highlights several progressive expectations:<\/p>\n\n\n\n Key Lesson for Corporate Strategy:<\/strong> If a dispute escalates to litigation, ignoring or obstructing court-ordered disclosures will maximise your injunction risk. The tactical play of “delay via blanket rejection” is now a liability that can lead directly to a product sales ban, threatening core business operations.<\/p>\n\n\n\n The most contentious element of FRAND remains the “R” (Reasonable)\u2014the valuation of the licence fee. The tech sector remains sharply divided on the proper economic base for calculations:<\/p>\n\n\n\n While global jurisprudence increasingly considers EMV frameworks, cross-industry sectors like automotive and IoT\u2014where the cost of the communication module represents only a small fraction of the final product value\u2014continue to debate this fiercely.<\/p>\n\n\nElement<\/strong><\/td> Meaning<\/strong><\/td> Practical Insight in Licensing Negotiations<\/strong><\/td><\/tr><\/thead> F: Fair<\/strong><\/td> Procedural Fairness<\/td> Parties must negotiate in good faith without undue delay, coercion, or tactical gamesmanship.<\/td><\/tr> R: Reasonable<\/strong><\/td> Appropriate Compensation<\/td> The royalty rate must reflect the value of the technology, ensuring aggregate royalties do not become economically prohibitive.<\/td><\/tr> N-D: Non-Discriminatory<\/strong><\/td> Equal Treatment<\/td> Similarly situated competitors must be treated equally, preventing the arbitrary exclusion of specific market players.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n 2. The Necessity of FRAND: Preventing Patent Hold-Up and Hold-Out<\/h2>\n\n\n\n
3. The Golden Rules of FRAND Negotiation: Huawei v. ZTE and Global Guidelines<\/h2>\n\n\n\n
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4. The End of Absolute Immunity: The Pixel 7 Injunction and the Tokyo District Court’s New Protocol<\/h2>\n\n\n\n
Japan’s First SEP-Based Injunction: The Pixel 7 Case<\/h3>\n\n\n\n
Public Disclosure of the “Tokyo District Court New Protocol” (January 2026)<\/h3>\n\n\n\n
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5. Modern Controversies: Valuing FRAND and the Collapse of EU Regulations<\/h2>\n\n\n\n
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