Case 3:20-cv-00494-JLS-NLS Document 1 Filed 03/16/20 PageID.1 Page 1 of 46
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`SHEPPARD, MULLIN, RICHTER & HAMPTON LLP
`A Limited Liability Partnership
`Including Professional Corporations
`STEPHEN S. KORNICZKY, Cal. Bar No. 135532
`skorniczky@sheppardmullin.com
`MARTIN R. BADER, Cal. Bar No. 222865
`mbader@sheppardmullin.com
`ERICKA J. SCHULZ, Cal Bar No. 246667
`eschulz@sheppardmullin.com
`12275 El Camino Real, Suite 200
`San Diego, California 92130-2006
`Telephone:858.720.8900
`Facsimile:858.509.3691
`
`DANIEL L. BROWN
`dbrown@sheppardmullin.com
`30 Rockefeller Plaza, 39th Fl.
`New York, New York 10112
`Telephone: 212.634.3095
`Facsimile: 212.653.8701
`
`
`Attorneys for Plaintiffs
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`
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`U-BLOX AG, U-BLOX SAN DIEGO,
`INC., AND U-BLOX AMERICA,
`INC.,
`
`
`Plaintiffs,
`
`v.
`
`SISVEL INTERNATIONAL S.A.,
`SISVEL US, INC., and 3G Licensing
`S.A.
`
`
`Defendants.
`
`
`UNITED STATES DISTRICT COURT
`FOR THE SOUTHERN DISTRICT OF CALIFORNIA
`
` Case No._____________________
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`COMPLAINT FOR:
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`(1) Breach Of Contract;
`(2) Declaratory Judgment;
`(3) Antitrust Monopolization In
`Violation Of Section 2 Of The
`Sherman Act and Unlawful Asset
`Acquisition in violation of
`Section 7 of the Clayton Act;
`(4) Declaratory Judgment of
`Unenforceability of U.S. Patent
`No. 7,433,698; and
`(5) Declaratory Judgment of
`Unenforceability of U.S. Patent
`No. 8,364,196.
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`COMPLAINT
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`'20
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`CV0494
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`NLS
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`AJB
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`Plaintiffs u-blox AG, u-blox San Diego, Inc., and u-blox America, Inc.
`(collectively, “u-blox” or “Plaintiffs”), by and through the undersigned counsel, file
`this Complaint against Sisvel International S.A., Sisvel US, Inc., and 3G Licensing
`S.A. (“3G Licensing”) (collectively, “Sisvel” or “Defendants”) as follows.
`INTRODUCTION
`1.
`u-blox, a leading fabless semiconductor provider of embedded
`positioning and wireless communication products, brings this lawsuit against Sisvel
`because of Sisvel’s refusal and failure to license its alleged standard essential
`patents (“SEPs”) on fair, reasonable, and non-discriminatory (also known as
`“FRAND”) terms and conditions, and to prevent and restrain Sisvel’s
`anticompetitive conduct and other violations of the law.
`2.
`Sisvel acquired ownership and/or the right to grant non-exclusive
`licenses to a number of patents it asserts are essential to the second generation
`(“2G”), third generation (“3G”), and/or fourth generation (“4G”) cellular technology
`standards established by the European Telecommunications Standards Institute
`(“ETSI”), a standard setting organization (“SSO”). However, Sisvel did not
`develop, create and/or promote the cellular technology it asserts is covered by its
`alleged standard essential patents (“SEPs”). Sisvel’s SEPs were previously owned
`by other entities including, for example, Nokia, Research in Motion, Mitsubishi,
`Orange, and KPN (the “transferors” or “prior owners”). In acquiring these alleged
`SEPs, Sisvel intentionally sought to accumulate and aggregate them into a portfolio
`with a dominant position in the market for licensing them, and improperly seek
`unreasonable royalty rates.
`3.
`As explained herein, Sisvel and the prior owners of Sisvel’s alleged
`SEPs are and/or were members of ETSI and, thus, the SEPs related to 2G, 3G, and
`4G that Sisvel has the right to license are subject to ETSI’s Intellectual Property
`Rights (“IPRs”) Policy. The ETSI IPR Policy requires its members to disclose any
`intellectual property rights (“IPR”) that entity has in technology related to a standard
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`under consideration, and requires the entity to agree to an irrevocable obligation to
`be prepared to offer licenses on a FRAND basis.
`4.
`Sisvel and/or the prior owners have submitted a number of declarations
`to ETSI identifying hundreds of patents as potentially essential to the 2G, 3G, and/or
`4G cellular standards, and agreeing to the FRAND commitment. As ETSI members
`proposing technology in the standardization process, ETSI relied on such FRAND
`commitments to lock-in the technology into the standard.
`5.
`Consistent with the intent of ETSI’s IPR Policy, and relying on the
`assurances of FRAND commitments by SEP holders, such as Sisvel and/or prior
`owners, u-blox has invested substantial resources in developing and marketing
`cellular modules that are compatible with the 2G, 3G, and/or 4G standards
`worldwide, including in the United States and California.
`6.
`However, now that this lock-in has occurred and alternative
`technologies have been excluded from the standards, it has become clear that Sisvel
`never intended to license its alleged SEPs on FRAND terms and conditions.
`7.
`u-blox is a ready and willing licensee to Sisvel’s alleged SEPs, but
`Sisvel’s license related conduct plainly violates its FRAND commitments, including
`but not limited to:
`
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`Demanding royalty rates that are far in excess of the fair and
`reasonable value of Sisvel’s SEPs;
`Upon information and belief discriminating against u-blox and
`violating ETSI guidelines by demanding u-blox pay higher
`royalty rates than other implementers;
`Demanding u-blox pay royalties for alleged SEPs covering
`portions of the standard not implemented by certain u-blox
`products;
`Demanding u-blox pay royalties for alleged SEPs that the prior
`owners failed to timely disclose prior to the standard being
`adopted; and
`Demanding royalty rates that do not account for the expiration of
`Sisvel’s alleged SEPs over the course of the license.
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`
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`
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`
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`8.
`In addition, in a blatant attempt to coerce u-blox to enter into a license
`that is not on FRAND terms, Sisvel has engaged in a course of conduct to damage
`u-blox’s relationships with its customers and, ultimately, to damage u-blox.
`Specifically, in 2017, ignoring u-blox’s request for a FRAND license, Sisvel
`targeted u-blox’s customers and downstream manufacturers, including Xirgo
`Technologies, LLC (“Xirgo”), by sending demand letters and suing Xirgo in district
`court.
`9.
`Upon information and belief, Sisvel was well aware of the fact that: (i)
`u-blox entered into relationships with its customers in reliance on Sisvel’s and the
`prior owners’ commitment to offer a license to the alleged SEPs on FRAND terms,
`and (ii) u-blox’s customers and their downstream manufacturers relied on u-blox to
`obtain a license from SEP holders such that they may design their products and
`incorporate u-blox’s technology into their products.
`10. Sisvel has demanded greatly inflated patent royalties that are based off
`the final end product, rather than the smallest saleable unit that practices the alleged
`SEPs—the u-blox components. These inflated royalties Sisvel seeks, going back
`years, far exceed the profit margin of the u-blox components, even though pricing
`decisions had been made years ago, and the prior owners could have sought a
`license from u-blox years ago.
`11.
`In response to Sisvel’s unreasonable royalty rate demands, u-blox
`provided Sisvel with a counter-offer, along with a detailed explanation of how that
`counter-offer is FRAND, and reiterated that it was willing to negotiate a FRAND
`license with Sisvel.
`12. Unfortunately, however, Sisvel refused to negotiate in good faith with
`u-blox for a FRAND license. Among other things, Sisvel appears intent to pressure
`u-blox into a license that is not FRAND by interfering with u-blox’s important
`customer relationships.
`13. As a result of the foregoing, u-blox has no choice but to turn to the
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`Court to establish FRAND terms and conditions, including a royalty rate, for a
`license to Sisvel’s alleged SEPs, and to enjoin Sisvel from engaging in
`anticompetitive conduct, including, but not limited to, demanding non-FRAND rates
`from implementers, and seeking royalties for technology that was adopted into the
`standards well before Sisvel and/or the prior owners properly disclosed their IPRs to
`ETSI and its members—thereby rendering the alleged SEPs unenforceable.
`THE PARTIES
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`A.
`u-blox
`14. Plaintiff u-blox AG is a corporation organized and existing under the
`laws of Switzerland, having its principal place of business in Zürcherstrasse 68,
`8800 Thalwil, Switzerland.
`15. Plaintiff u-blox San Diego, Inc. is a wholly-owned subsidiary of u-blox
`AG. u-blox San Diego, Inc. is a corporation organized and existing under the laws
`of Delaware, having its principal place of business at 12626 High Bluff Drive #200,
`San Diego, California 92130.
`16. Plaintiff u-blox America, Inc. is a wholly-owned subsidiary of u-blox
`AG. u-blox America, Inc. is a corporation organized and existing under the laws of
`Delaware, having its principal place of business at 1902 Campus Commons Drive
`Suite 310, Reston, Virginia 20191.
`17.
`u-blox delivers leading wireless technology to reliably locate and
`connect people and devices. u-blox is a leading developer of global positioning
`technology, including products and services based on Global Navigation Satellite
`Systems (GNSS), including GPS and GALILEO, for the automotive, mobile
`communications, and infrastructure markets. u-blox began offering wireless
`products and services in 2009.
`18.
`In 2011, u-blox acquired Fusion Wireless, a San Diego, California
`based provider of CDMA wireless modules for consumer and machine-to-machine
`(M2M) applications in North America. As u-blox’s Chief Executive Officer
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`explained at the time, “[t]he acquisition of Fusion Wireless immediately gives
`u-blox new, cutting-edge wireless module products plus access to the huge
`embedded CDMA market in North America for both consumer and M2M
`applications. It also expands our wireless module technology roadmap to cover all
`popular standards used in the Americas based on a layout-consistent form factor.
`This will allow our customers to easily adapt their products to match geographical
`requirements as well as overcome network coverage limitations.”
`19. Fusion Wireless has been integrated into u-blox as u-blox San Diego,
`Inc., and the combined company continues to develop and market wireless
`communications modules worldwide — including in California and throughout the
`United States. Today u-blox offers a wide range of high-quality, scalable cellular
`modules perfectly suited for vehicle, industrial, and M2M applications, and mass-
`market consumer products with demanding size, cost, and quality requirements.
`20.
`u-blox’s wireless communications modules are capable of
`incorporating a wide variety of cellular technologies. Supported cellular
`technologies provide global geographic coverage and include at least 2G, 3G, and/or
`4G standards. Even within the 4G standard, u-blox offers a wide range of products
`practicing different iterations and categories of the 4G standard designed for vastly
`different tasks, including NB-IoT (LTE Cat NB1), LTE Cat M1, LTE Cat 1, LTE
`Cat 4, and LTE Cat 6. These different cellular technologies offer different levels of
`performance and cost benefits. For example, u-blox’s LTE Cat 1, LTE Cat M1, and
`NB-IoT modules are designed to support a wide range of Internet of Things (IoT)
`applications requiring medium to very low data rates. This includes a broad
`spectrum of applications covering speeds high enough for voice and video
`streaming, as well as those that need optimized performance for ultra-low power
`consumption and extended in-building range. By contrast, u-blox’s high speed LTE
`Cat 4 and LTE Cat 6 modules meet the needs of applications requiring high data
`rates, such as for HD video transmission and infotainment solutions. u-blox sells
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`standard compatible products in California and around the world.
`B.
`Sisvel
`21. Upon information and belief, Defendant Sisvel International S.A.
`(“Sisvel SA”) is organized under the laws of Luxembourg, with its principal place of
`business at 6, Avenue Marie Therese 2132, Luxembourg Grand Duchy of
`Luxembourg.
`22. Upon information and belief, Defendant Sisvel US, Inc. (“Sisvel US”)
`is a Virginia corporation, with its principal place of business at 10250 Constellation
`Blvd 2nd Floor, Los Angeles, CA 90067.
`23. Upon information and belief, Defendant 3G Licensing is a wholly
`owned subsidiary of Sisvel SA, and is located at 6, Avenue Marie-Thérèse, L-2132
`Luxembourg Grand Duchy of Luxembourg.
`24. Upon information and belief, on February 14, 2018, Sisvel SA
`contributed its 3G patents (formerly owned by Nokia) to 3G Licensing’s 3G
`licensing program.
`25. Upon information and belief, Sisvel SA has and does dictate and
`control the actions of Sisvel US and 3G Licensing as described herein.
`26. Upon information and belief, Sisvel US has or had offices and
`employees in California and/or regularly conducts business in California, including
`an office at 10250 Constellation Blvd. 2nd Floor, Los Angeles, CA 90067, which
`supports Sisvel SA’s patent licensing business.
`27. Upon information and belief, Sisvel purports to own approximately
`thousands of U.S. patents and non-U.S. patents spanning multiple jurisdictions and
`telecommunication technologies related to 2G, 3G, and 4G cellular technology, and
`provides brochures listing the patents in its portfolio on its website. See Exhibits 1-
`3 (Sisvel’s 3G (MCP) patent list, Sisvel’s 4G patent Brochure, and 3G Licensing’s
`3G Patent List Brochure).
`28. Upon information and belief, Sisvel derives revenues primarily from
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`patent licensing and aggressively seeks to monetize its intellectual property
`portfolio by targeting companies like u-blox that sell standards compatible products
`in California and around the world.
`29. Upon information and belief, Sisvel SA directs employees of Sisvel US
`in California to negotiate patent licenses with potential licensors in California,
`including u-blox, regarding the 2G, 3G, and 4G patents for which Sisvel SA owns,
`manages, and/or controls and/or for which 3G Licensing owns, manages, and/or
`controls.
`30. Upon information and belief, Sisvel SA directs employees of Sisvel
`and/or related companies to negotiate patent licenses with potential licensors in
`California, including u-blox, regarding the 3G and 4G patents for which Sisvel SA
`owns, and/or for which 3G Licensing owns, manages, and/or controls.
`JURISDICTION AND VENUE
`31.
`u-blox brings this action for damages, declaratory relief, injunctive
`relief, costs of suit, and reasonable attorneys’ fees arising under, inter alia, the
`patent laws of the United States, 35 U.S.C. § 1 et seq.; Section 2 of the Sherman
`Antitrust Act, 15 U.S.C. § 2; Section 7 of the Clayton Act, 15 U.S.C. § 18; and the
`Declaratory Judgment Act, 28 U.S.C. §§ 2201 and 2202. Accordingly, this Court
`has jurisdiction to hear this case pursuant to 28 U.S.C. § 1331 and Section 4 of the
`Clayton Act, 15 U.S.C. § 15.
`32. This Court has subject matter jurisdiction over u-blox’s pendent state
`law claim pursuant to 28 U.S.C. § 1367, because u-blox’s state law claim arises
`from the same factual nucleus as its federal law claims.
`33. This Court has personal jurisdiction over Sisvel based on the antitrust
`laws, and at least because Sisvel (1) committed intentional acts, including the
`wrongful conduct described herein, that give rise to the causes of action herein in
`this jurisdiction, (2) expressly aimed such acts at u-blox in San Diego, California,
`among other places, and on information and belief at others in this State, and (3)
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`caused harm that Sisvel knew was likely to be suffered in this State, including the
`harm to u-blox described herein.
`34. For example and without limitation, Sisvel regularly and knowingly
`directs its licensing business to this judicial district and other areas of California,
`including through its Los Angeles, California office. As described herein, Sisvel’s
`licensing business includes demanding supra-FRAND royalties from u-blox,
`including u-blox San Diego, and from others in this State, including u-blox’s
`customers for Sisvel’s SEPs. Sisvel knew such demands would cause harm to u-
`blox in San Diego, California. Sisvel’s license negotiations and correspondence
`with u-blox on behalf of Sisvel in connection with the license negotiations described
`herein were knowingly and intentionally conducted with u-blox’s representative in
`San Diego, California by Sisvel’s representative in California. Additionally, Sisvel
`knowingly and intentionally caused harm to u-blox in San Diego, California by
`seeking supra-FRAND rates for FRAND encumbered SEPs. u-blox’s claims arise
`from Sisvel’s intentional conduct in and expressly aimed at California.
`35.
`In addition, this Court has personal jurisdiction over Sisvel at least
`because (1) Sisvel maintains an office in Los Angeles, California, (2) this office
`supports or supported Sisvel’s licensing business described herein, (3) the conduct
`giving rise to the causes of action described herein includes conduct directed at u-
`blox in San Diego, California by at least Sisvel and/or 3G Licensing’s representative
`based out of this office, and (4) Sisvel acted as a single entity with all Sisvel
`subsidiaries and 3G Licensing when negotiating with u-blox in San Diego.
`36. Venue is proper under Section 12 of the Clayton Act §12.
`37. Venue is proper in this judicial district pursuant to 28 U.S.C.
`§§ 1391(b) (2) as the licensing negotiations giving rise to the complaint were
`directed at u-blox’s employees in this judicial district.
`///
`///
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`FACTUAL ALLEGATIONS
`38. As explained below, u-blox brings this action because Sisvel and/or the
`prior owners breached their commitments to ETSI, 3GPP, their members and
`affiliates, and third party beneficiaries to these commitments — including u-blox —
`to timely disclose their alleged 2G, 3G and/or 4G SEPs to ETSI and to license these
`SEPs on FRAND terms and conditions.
`Standard Setting Organizations and Intellectual Property Rules
`39. SSOs, such as ETSI, are voluntary membership organizations whose
`participants engage in the development of industry standards for the benefit of their
`members and affiliates, third parties implementing the standards, and consumers.
`40. SSOs and the standards they promulgate play an important role in the
`technology market by allowing companies to agree on common technology
`standards so that compliant products implementing the standards will work together.
`Standards also lower costs by increasing product manufacturing volume and inter-
`brand competition and by eliminating switching costs for consumers and/or
`manufacturers who want to switch from products, services, or components provided
`by one company to those provided by another company.
`41. Compatibility standards are commonly adopted in industries in which
`complementary products or components, manufactured by different firms, must
`interoperate, interface, or communicate with each other. When many companies
`produce components that must interoperate in a complex system, the collaboration
`of industry participants is often the most efficient way to establish the requisite
`standards. This collaboration often takes place in the context of formal SSOs that
`promulgate standards and set participation rules for their members. The
`telecommunications industry has benefited from increased interoperability across
`devices and networks, and the 3G and 4G cellular communications standards at
`issue here are examples of compatibility standards.
`42. While standards deliver economic benefits to innovators, firms that
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`implement the standards, and consumers, standards can also potentially impose
`excessive and unfair costs on these same constituencies, some of which stem from
`opportunistic behavior by owners of patents that cover or are declared to cover
`various technologies necessary to practice a standard. As a result, SSOs have
`adopted IPR policies to reduce those costs. When adhered to, these IPR policies
`benefit all of the constituencies. Standard setting participants receive the
`opportunity to have their technology incorporated into the standard and to receive
`compensation for its use in a larger number of devices that operate using the
`standard. As the standard becomes more widely adopted and used, the patent
`holders receive greater total compensation. SSO participants also enjoy benefits
`independent of potential royalty income, including recognition of leadership in the
`technology, increased demand for participants’ products, advantages flowing from
`familiarity with the contributed technology potentially leading to shorter
`development lead times, and improved product compatibility.
`43. Firms that implement the standard receive assurance that they will
`always have access to essential patents and will not be exploited by patent holders or
`disadvantaged relative to other implementers if they invest in implementing the
`standard or developing innovative products that may operate with the standard.
`Likewise, consumers and businesses benefit from continued innovation, reduced
`costs, and other efficiencies from widespread interoperability and economies of
`scale and scope enabled by the standard.
`44. By contrast, IPR policy breaches can chill standard-setting efforts, thus
`denying to standard setting participants, implementers, and consumers the many
`benefits of standard setting.
`45.
`In addition, while there are many benefits to collaborative standard
`setting, collaborative standard setting can also raise antitrust concerns, because, for
`example, collaborative standard setting has the potential to empower any individual
`firm that has IPR over one or more technologies that are essential to the standard to
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`block other firms from practicing the standard or to significantly raise their costs of
`doing so. Outside of the standard setting context, the extent to which a patent holder
`will be able to profit from an invention is limited by competition from alternative,
`non-infringing technologies or products. Thus, even though a patent gives its owner
`the right to exclude unauthorized users, it does not necessarily confer monopoly
`power because other constraining, non-infringing alternatives may be available.
`However, incorporating patented technology into a standard artificially removes
`competition from those alternatives and provides the patent owner with incremental
`market power that can be exploited. This incremental market power is due to the
`elimination of alternatives once the patents are incorporated into the standard, not
`the inherent technical value of the patents (i.e., the contribution of the patented
`technology relative to the alternatives — the ex ante value).
`46. SEP owners gain the power to exclude or exploit because the process of
`standardization transforms what may have been only marginally valuable IP into
`essential IP needed by all firms that intend to manufacture, use, or sell standard-
`based products. The U.S. Department of Justice and Federal Trade Commission
`have recognized the potential for SEP owners to abuse the power gained through
`standardization. The effect is that the competitive constraints on the SEP owner’s
`licensing behavior are eliminated after standardization. This elimination of
`alternatives confers market power on SEP owners relative to the pre-standard
`situation wherein alternatives (including the option of not including the relevant
`functionality at all) are potentially available in the technology market(s) and can
`constrain anticompetitive licensing behavior of the SEP owner.
`47. Once a standard is set, and especially as manufacturers invest in and
`begin manufacturing products that can use or operate with the standard, it can be
`infeasible to revise the standard in order to avoid a SEP. Revising a standard can be
`very costly to the industry implementing that standard because it may involve
`breaking the compatibility and interoperability that the standard provides. Thus,
`
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`changing a standard to eliminate a SEP whose owner attempts to unfairly exercise
`undue market power gained from standardization is generally not feasible. In sum,
`once an industry has adopted a particular standard, there are no alternative
`technologies that can implement a given functionality within the wording of the
`standard. The ex post relaxation of competitive constraints on the SEP owner
`through the elimination of alternatives, together with the ex post negotiation of
`licenses, gives rise to the possibility that a SEP owner will act opportunistically and
`“hold up” some or all standard implementers by extracting higher royalties ex post
`than it could have bargained for ex ante.
`48. To prevent the exploitation of the SEP owner’s market power in this
`situation, there must be other constraints on the SEP owner’s licensing behavior,
`such as obligations to license on FRAND terms. To this end, SSOs typically impose
`IPR rules on their participants to protect against (or minimize the likelihood of)
`opportunistic, anticompetitive behavior by SEP owners. Such opportunistic
`behaviors expropriate at least a portion of an implementer’s returns from sunk
`investments in innovation. If an implementer or potential implementer anticipates
`that there is a material risk of opportunistic behavior, its incentives to engage in
`innovative activities will be reduced or possibly even eliminated, particularly when
`the opportunistic SEP holder seeks to hold up the implementer for all or a large part
`of the profits from the implementer’s innovations, complementary products, or
`services. By protecting against opportunistic behavior, SSO rules pertaining to IPR
`are intended to provide an environment that promotes investment, innovation, and
`technological progress. These IPR rules typically call for SSO participants to
`identify through timely declaration any potential SEPs covering the proposed
`standard and agree to license all implementers of the standard on fair, reasonable,
`and non-discriminatory terms.
`///
`///
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`ETSI’s IPR Policy
`49. ETSI is an independent, non-profit SSO that is responsible for the
`standardization of information and communication technologies, including mobile
`cellular technologies, for the benefit of its members and affiliates.
`50.
`3GPP is a collaborative project that develops standards in partnership
`with a group of recognized SSOs in the information and communication industry,
`including ETSI.
`51. ETSI, in partnership with 3GPP, has been involved in standardizing a
`number of 2G, 3G, and 4G mobile cellular technologies.
`52. The ETSI IPR Policy1 requires its members to disclose on a timely,
`bona fide basis all intellectual property rights that they are aware of and believe may
`be or may become essential during the development of an ETSI standard. The ETSI
`IPR Policy, Clause 4.1 provides that: “each MEMBER shall use its reasonable
`endeavours [sic] to timely inform ETSI of ESSENTIAL IPRs it becomes aware of.
`In particular, a MEMBER submitting a technical proposal for a STANDARD shall,
`on a bona fide basis, draw the attention of ETSI to any of that MEMBER’s IPR
`which might be ESSENTIAL if that proposal is adopted.” This obligation to
`disclose extends to members’ affiliates as well. In other words, if a member is
`going to receive an economic benefit from having technology covered by its
`intellectual property included in the standard, other ETSI members should be
`informed of this before making their final decision to adopt such technology into the
`standard, and in particular where such technology was submitted in a technical
`proposal by the IPR holder.
`53. Additionally, ETSI’s IPR Policy requires that participants disclose their
`relevant IPR during the development of a standard so that ETSI may request that
`members owning patents potentially essential for the practice of a standard
`
`1 See ETSI IPR policy at https://www.etsi.org/images/files/IPR/etsi-ipr-policy.pdf,
`last visited March 12, 2020, which has remained substantively similar since 1994.
`
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`irrevocably commit to license those patents on FRAND terms and conditions to
`anyone practicing the standard. Specifically, clause 6 of ETSI’s IPR Policy states:
`When an ESSENTIAL IPR relating to a particular STANDARD is
`brought to the attention of ETSI, the Director of ETSI shall
`immediately request the owner to give within three months an
`undertaking in writing that it is prepared to grant irrevocable licenses
`on fair, reasonable and non-discriminatory [FRAND] terms and
`conditions under such IPR… The above undertaking may be made
`subject to the condition that those who seek licenses agree to
`reciprocate.
`
`ETSI IPR Policy, § 6.1.
`54. Clause 6.1 lists “MANUFACTURE, including the right to make or
`have made customized components and sub-systems to the licensee’s own design
`for use in MANUFACTURE,” as among the uses for which SEP holders must make
`mandatory FRAND licensing commitments. Id.
`55. FRAND commitments, pursuant to Clause 6 of the ETSI IPR Policy,
`“shall be interpreted as encumbrances that bind all successors-in-interest.”
`56. ETSI defines “essential” as follows:
`“ESSENTIAL” as applied to IPR means that it is not possible on
`technical but not commercial grounds, taking into account normal
`technical practice and the state of the art generally available at the time
`of standardization, to make, sell, lease, otherwise dispose of, repair, use
`or operate EQUIPMENT or METHODS which comply with a
`STANDARD without infringing that IPR. For the avoidance of doubt
`in exceptional cases where a STANDARD can only be implemented by
`technical solutions, all of which are infringements of IPRs, all such
`IPRs shall be considered ESSENTIAL.
`
`ETSI IPR Policy, Annex 6.
`57. Although ETSI defines the te