(Original Publish Date: 5/15/2013)
This article reviews the court decision in Korea, with a particular focus on the justifiability of granting an injunction to a holder of standard essential patents who committed to grant licenses under FRAND terms. In reviewing the court decision, the article will consider the negotiating parties’ bargaining behavior and related transaction costs, when an injunctive court relief is sought by a party. This article then proposes a new court procedure, which would ameliorate the parties’ incentives to engage in hold-up or reverse hold-up and would instead prompt and facilitate the parties’ negotiation. Under the proposed court procedure, the court would initially make an interim and provisionary decision on FRAND and would make a final and definitive decision on FRAND only at a later stage when doing so becomes necessary. This procedure would exert pressures on the parties to engage in negotiation in earnest and in good faith, without necessarily relying on the court’s direct involvement.