In Koninklijke Philips N.V. v. Thales DIS AIS USA LLC, C.A. No. 20-1713 (D. Del.), the plaintiff brought patent infringement claims for several patents, plus a DJ claim seeking a declaratory judgment of no FRAND license defense, citing a previous Delaware case finding no such defense absent a sworn affidavit that the defendant would sign a global FRAND license.
In the alternative, if the defendant submitted a signed affidavit, Plaintiff's complaint sought a "declaratory judgment determining the appropriate worldwide FRAND licensing terms for Philips’ world-wide portfolio of patents under ETSI policies."
With its answer, the defendant included just such a signed affidavit, along with its own DJ counterclaim and breach of contract counterclaim related to FRAND issues.
The Court decided to phase the trial, and to start with a trial limited to the FRAND claims in the complaint and counterclaims.
The case has now progressed through discovery, and in the lead-up to trial, the Court issued an order resolving that the relevant period for the FRAND determination at trial would run from the notice date of the patents. D.I. 220.
In response, the parties filed a letter that the Court found misunderstood the issues for trial:
The parties appear to be under the impression that they are trying the issue of damages at the August trial. See No. 20-1709, D.I. 224 at 2 n.1 (Philips stating its understanding that "the Court will inform the jury that Thales owes money to Philips for sales of Thales' products ... with the implication that the jury is not making a determination as to any money Thales might owe for sales prior to February 16, 2016"); No. 20-1709, D.I. 224 at 3 (Thales faulting Philips for "not point[ing] to anything in ETSI [(European Telecommunications Standards Institute)] IPR Policy or in French or U.S. law stating that there are no limitations on the period for recovery of royalties"). But as I stated in my June 25, 2024 Memorandum Order, the only issue that the jury will be asked to decide at the August trial is what would the FRAND licensing terms have been for Philips' patents if the parties had negotiated a FRAND license for the period February 16, 2016 through August 2028. See No. 20-1709, D.I. 220 at 5; No. 20-1713, D.I. 259 at 5.
Id., D.I. 266. The Court went on to lay out some examples of items that may or may not be covered in the FRAND trial. In particular:
- The type of license, including lump sum vs. running royalty
- Whether the parties would have adjusted the royalty based on the defendant' sales and the likelihood of success on the merits
- Whether the license would have included a release related to the statute of limitations
- Whether the license would have been for the entire period or some subset thereof.
The Court's list specifically does not include damages for patent infringement:
To the extent the parties' experts have opinions that bear on these considerations, those opinions are relevant and would be admissible at trial if they were timely disclosed and otherwise satisfied the requirements of Federal Rule of Evidence 702. No expert, however, will be allowed to offer opinions about what Philips is owed or entitled to recover for alleged patent infringement. Issues of damages will be tried only if Philips prevails when its patent infringement claims are tried in the Phase II trial.
I can't think of another time where the Court has had a case go to trial exclusively for a FRAND determination. It its opinion on the time limitations for the FRAND determination, the Court explained the phasing:
For efficiency purposes, the cases have been coordinated for scheduling, and groupings of claims alleged in the actions will be tried in phases. Trial for the first phase is scheduled to begin on August 12, 2024. Pursuant to the Scheduling Order in both actions, this trial will address Count VII of the operative Second Amended Complaint in the 20-1709 action, Count V of the Complaint in the 20-1 713 action, and Thales' First Counterclaim in the 20-1713 action. . . . I have yet to schedule trial or summary judgment motion briefing for any other claims.
Id., D.I. 220. The Court says that there may be additional phases of trial after the FRAND determination to address actual infringement, invalidity and damages—but it's not clear to me what potential outcomes from the first trial would/would not lead to a later trial. It will be interesting to see how this goes.
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