China has become a major destination for resolution of
disputes over the licensing of patents incorporated into
global technical standards. These patents are generally
required to be licensed on “FRAND” terms. FRAND is
an English language acronym that consists of four
separate components: (A) “fair”, (B) “reasonable”, (C)
“and” (D) “non-discriminatory.” Chinese courts have
typically applied these four admittedly vague components
in their Chinese translations, rather than their native
English. These translations have not been standardised
across cases and policy documents. There are often
multiple translation variants in an individual judicial
decision with at least 120 potential variant translations
of the four FRAND components. In addition, there are
three significant grammatical variants, plus various
combinations of the four components, which brings a
total of potential variants used by Chinese courts to over
500. Not all these variants impose new meanings of
FRAND. In fact, the most significant of the variant
translations is grammatical and not based on a semantic
difference. It entails removing a Chinese term for “and”
and utilising the Chinese enumerative comma or dunhao,
which looks like a backwards comma, to replace the
Western comma. According to relevant Chinese national
standards and practice, the use of the dunhao means
“pause.” It can mean “and” or “or.” It potentially
fragments the integrated concept of “FRAND” into its
separate components. In this dominant translation
variant, FRAND means “fair and/or reasonable and/or
non-discriminatory.” It might more appropriately be
called “FRND”.
The Chinese courts’ use of FRND maximises judicial discretion by facilitating new
combinations of individual FRAND components, thereby
selectively ignoring certain FRAND components, and by
introducing new terms into FRAND. These translations
have also worked to the disadvantage of the foreign party
by imposing preferential treatment for a Chinese licensee
or a rate that is equal to the lowest rate charged by the
licensee, regardless of the costs and challenges faced by
the foreign licensor in negotiating and litigating with its
Chinese counterpart. While foreign courts and companies
have observed that it is difficult to obtain fair
remuneration for standards-essential patents (“SEPS”)
licensed to China, these varied translated “faces of
FRAND” are not observable to readers who rely solely
on English translations. The English translations that I
have reviewed have uniformly declined to address
inconsistent translations from English into Chinese and
back into English. These Chinese translations are also
inconsistent with the translations into Chinese of
international organisations and the approaches to
translating FRAND’s vague components that have been
undertaken by many foreign countries and economies.
The effect of these mistranslations is to not merely to
uniquely translate FRAND in judicial decision making,
but, in certain instances, to suggest or impose new
meanings based on Chinese law upon FRAND. These
new Chinese meanings also serve to facilitate
transplanting FRAND into new areas of the law and
diplomacy where the Chinese government typically has
expressed an interest in managing private property rights
to serve governmental interests.
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