The perils of top-down methodology
Two nations divided
- Whether Ericsson met its FRAND obligation,
- Whether Ericsson's final offers before litigation, Offer A and Offer B, satisfy FRAND,
- What terms are material to a FRAND license, and then supply the FRAND terms.
Cap and prorate
- It mistakenly regarded announcements and other disclosures of companies' individual royalty rates and of expected aggregate royalties as multi-mode rates including two or more standards rather than as single-mode rates.
- These aggregate rates were then prorated with much greater scrutiny and adjustments to the count of Ericsson's SEPs in the numerator and than for the "relevant universe" of all SEPs in the denominator of the apportionment calculations:
- Only a subset of Ericsson's patents with claim charts were included in the numerator, whereas patents were counted in the denominator without any requirement for creation or submission of claim carts,
- Whereas all Ericsson's SEPs counted —whether or not patent essentiality was contested by TCL's experts—were evaluated by the parties for at least 50 hours per patent family, the average time spent evaluating entire patent families counted in the relevant universe was a cursory 45 minutes,
- Modest adjustments for SEP over-declaration in the relevant universe were based on highly unreliable "error rate" calculations,
- Substantial and unwarranted geographic adjustments were made to Ericsson's SEPs and royalty rates,
- Inapplicable adjustments were made for expiration of Ericsson's patents while disregarding significant value in new SEPs (e.g. for LTE Advanced).