Southeast Asia, particularly countries like Thailand, Vietnam, Indonesia, and the Philippines, is increasingly seen as a significant region for Standard Essential Patent (SEP) litigation as part of SEP licensing negotiation. This is due to its large market size and evolving legal frameworks, with Thailand, Vietnam, Indonesia, and the Philippines having specialized IP courts to better deal with complex IP cases.
Standard Essential Patent (SEP) litigation in Southeast Asia is evolving as countries in the region navigate the complexities of balancing patent rights with competition law.
SEP holders, when declaring essentially certain patents, need to give an irrevocable undertaking to grant a license on Fair, Reasonable, and Non-discriminatory terms. It is against this backdrop that courts need to grapple with SEP's request for an injunction as a result of any impasse in licensing negotiation.
Courts in developed jurisdictions have developed frameworks for deciding whether an injunction should be granted—Huawei v ZTE in the EU and Apple v Motorola in the US.
The likelihood of Southeast Asian countries applying principles from either Huawei v. ZTE (EU) or Apple v. Motorola (US) varies across Southeast Asian countries and can be influenced by their legal traditions and policy priorities.
In general, Southeast Asian countries are more likely to align with the Huawei v. ZTE framework, which emphasizes negotiation and compliance with FRAND (fair, reasonable, and non-discriminatory) commitments before seeking injunctions. Except for the Philippines, the principles established in Apple v. Motorola, which are rooted in the U.S. common law tradition, may have limited direct influence in Southeast Asia.
In our analysis of each country under review, we also assess the risk of anti-competitive complaints, which may be used by implementers as a potential stalling tactic when sued by SEP holders.
Although Singapore and Malaysia share a common law tradition, they are likely less influenced by U.S. common law principles from Apple v. Motorola. The British strand of common law has developed quite differently from the U.S. system, leading to distinct legal interpretations and practices in these jurisdictions.
While UK cases have adopted principles from Huawei v. ZTE, the UK position has evolved in a different direction, particularly through decisions like Unwired Planet v. Huawei. In this case, the UK Supreme Court asserted its authority to impose a global FRAND rate as an alternative to granting an injunction. This development reflects a significant departure from the original Huawei v. ZTE framework, which primarily focused on the obligations of SEP holders and implementers during licensing negotiations. The UK courts now recognize their power to set global FRAND terms, potentially positioning themselves as a forum for international licensing disputes.
Singapore and Malaysia are not likely to take the direction of the UK courts in imposing global FRAND rates but will still draw on the Huawei v ZTE framework when considering whether to grant an injunction in an SEP case. This reflects the generally held view that IP protection is still territorial in nature.
Further, Singapore courts’ approach to requests for injunctions by SEP holders may be impacted by competition law principles. The Competition and Consumer Commission of Singapore (CCCS) has indicated that seeking injunctions by SEP holders can raise competition concerns, especially if the SEP holder has committed to FRAND terms.
Malaysia has established guidelines similar to Singapore’s CCCS guidelines on the treatment of intellectual property rights.
A phone implementer facing a patent infringement action in court can theoretically file a complaint with the relevant competition commission as a strategy to delay proceedings.
In Indonesia, the approach to SEP infringement cases is likely influenced more by principles similar to Huawei v. ZTE rather than Apple v. Motorola. Indonesia is a civil law jurisdiction, and its courts may consider the structured framework established by Huawei v. ZTE, decision issued by another civil law system.
The Anti-Monopoly Law (Law No. 5 of 1999) makes clear that intellectual property-related agreements are outside the law's purview. Therefore, licensing negotiation and the conduct of the SEP holders are unlikely to be subject to the Anti-Monopoly Law.
The Thai IP&IT Court, established in 1997, handles cases involving international trade and IP issues. Whether the court will align more closely with U.S. or EU principles in future IP-related FRAND cases remains uncertain. In the Thai IP&IT Court, the principles from Huawei v. ZTE are more likely to be applied than those from Apple v. Motorola, given that Thailand operates under a civil law system.
Thai competition law has yet to be applied in intellectual property (IP) cases, leading to uncertainties regarding the Thai IP&IT Court’s approach. In the U.S., common law principles guide the granting of injunctions, as seen in Apple v. Motorola, while in the EU, Huawei v. ZTE emphasizes the role of FRAND in such matters. The contrasting legal frameworks raise questions about how Thailand will navigate IP enforcement.
Thai competition law, specifically the Trade Competition Act B.E. 2560 (2017), does not contain explicit provisions addressing intellectual property, or for that matter, standard essential patents (SEPs). As such, it is unclear if the competition commission would entertain a complaint in respect of conduct of SEP holders.
The Huawei v. ZTE framework presents a compelling approach for the Thai IP & IT Court in addressing Standard Essential Patent (SEP) enforcement. This framework emphasizes the FRAND inquiry, prioritizing good faith negotiations over competition law considerations.
Filipino patent litigation jurisprudence is influenced by U.S. case law due to the historical linkage between the two countries. The influence is evident in how the Philippines courts assess patent infringement, including using the doctrine of equivalents and claim construction, which align with practices in the U.S. There is, therefore, a leaning in favor of the adoption of principles in Apple v Motorola in the event that a SEP case is brought before a court in the Philippines.
The Philippine Competition Act (PCA) does not explicitly address the impact of intellectual property rights, including Standard Essential Patents (SEPs). However, the PCA provides that lawful agreements protecting intellectual property rights, confidential information, or trade secrets will not be construed as abuse of dominant position, which is an unlawful practice under the PCA. Thus, the risk of a parallel litigation before the Philippine Competition Commission is not likely to be high, given such a provision in the PCA.
Vietnam’s new specialist IP court is planned to be established after 1 January 2025. This new court aims to address the growing number of complex IP disputes in Vietnam, aligning with Vietnam’s international commitments to enhance IP enforcement. The special intellectual property court is staffed with judges trained in intellectual property laws so as to ensure better quality and consistency in their decisions on intellectual property disputes.
Vietnam is indeed a civil law country, with its legal and judicial system significantly influenced by French, Chinese, and Soviet laws. Vietnamese judges may indeed prefer the European Union Court of Justice’s Huawei v ZTE case over Apple v Motorola due to the influence of French law in Vietnam, particularly in the context of intellectual property (IP) law. Legal scholars often reference French legal principles when addressing gaps in Vietnamese law, a colonial-era legacy.
The Vietnamese Competition Law does not explicitly address the impact of intellectual property rights. In any case, Article 4(2) of the Competition Law provides that the latter shall prevail if there is any discrepancy between this law and other laws regarding anti-competitive practices, economic concentration, or unfair competition practices. This suggest that the implementation of IP laws will prevail over Competition Law; and this means that the IP courts will need to address the impact of FRAND undertaking given by the SEP owners when they seek to enforce their patents in the Vietnamese IP court.
Enforcement of Standard-Essential Patent (SEP) rights and the consideration of FRAND (Fair, Reasonable, and Non-discriminatory) licensing terms are best handled by courts specializing in patent law rather than competition forums. This approach allows for a more focused interpretation of patent laws and comprehensive adjudication of licensing disputes, which can be complex and nuanced. Courts are better equipped to address specific legal principles related to patents, while competition forums may not have the same level of expertise or jurisdictional clarity in SEP matters. Protection against abuse of market dominance by Standard Essential Patent (SEP) holders, in relation to FRAND obligations, can be addressed through principles established in Huawei v ZTE and Apple v Motorola.
Other than the Philippines, courts in Singapore, Malaysia, Indonesia, Thailand, and Vietnam are likely to adopt the principles from Huawei v ZTE to enforce an SEP patent.
However, the uncertainty for Singapore and Malaysia is that their respective competition laws include guidelines that address SEP patents, and this raises the concern that an SEP patent holder may have to deal with two battlegrounds—litigation in the civil courts and another in the competition forum.
South East Asia presents a compelling landscape for Standard Essential Patent (SEP) litigation, driven by its substantial market size and the dynamic legal frameworks in countries such as Thailand, Vietnam, Indonesia, and the Philippines. These nations are keen to position themselves on the global SEP litigation stage, providing strategic support in SEP licensing negotiations.
Authors: Chris Vale, Kin Wah Chow, Evi Triana, Edmund J Baranda, Peeraya Thammasujarit, Yen Vu, Dung Vu