FRAND licensing refers to the commitment by holders of standard-essential patents to license those patents on fair, reasonable and non-discriminatory terms. It is a mechanism used by standards bodies to balance patent holders’ rights with the need for broad, equitable access to technologies required to implement a standard. FRAND commitments aim to prevent hold-up and ensure interoperability across implementers.
Overview
- FRAND commitments accompany declarations that patents are essential to a standard.
- They oblige holders to license on fair, reasonable and non-discriminatory terms.
- The model curbs the risk of patent hold-up against locked-in implementers.
- Disputes over what counts as fair or reasonable are frequently litigated.
- Standards bodies require such commitments to admit patented technology into a standard.
Key aspects
- Standard-essential patents — Patents that cannot be avoided when implementing a standard fall under FRAND obligations.
- Fair and reasonable terms — Royalty rates and conditions must be defensible relative to the patent’s contribution.
- Non-discrimination — Similarly situated licensees should receive comparable terms.
- Dispute resolution — Courts and arbitration settle disagreements over rates and good-faith negotiation.
Applications
- Licensing of telecommunications standards such as cellular technologies.
- Codec and media standards requiring broad implementer access.
- Connectivity and IoT standards with many participating vendors.
- Resolving cross-licensing among competing patent holders.