Do We Need to Get Frantic About FRAND?

Posted by D. Daniel Sokol

Hein Hobbelen & Tone Oeyen (Freshfields Bruckhaus Deringer LLP) asks Do We Need to Get Frantic About FRAND?

ABSTRACT: For some time now, the concept of fair, reasonable, and non-discriminatory ("FRAND") has been a hotly debated topic in the antitrust community. Never free of what some may refer to as kafkaesk jargon, in Brussels we even have "FRAND roundtables" and "FRAND workshops." When advising on the issue, we have noticed that clients may, at first sight, tend to perceive the inclusion of FRAND terms in e.g. IPR license agreements to be too much of an absolute, strict requirement under EU competition law. This, however, requires nuance.

This contribution analyzes the role of fair, reasonable, and non-discriminatory license terms under EU competition law, in particular in the context of Article 101 and 102 of the TFEU. After an introductory section on standards and the basic relationship between standardization and competition law, we analyze in particular the role of the FRAND concept in the context of the new European Commission's Guidelines on the applicability of Article 101 TFEU to horizontal co-operation agreements and in the context of Article 102 TFEU. The purpose of the article is to get back to basics: What is the role of FRAND under EU competition law, particularly in the standardization context? The article does not give any detailed consideration to the intellectual property and contract law questions surrounding standardization and FRAND licensing. The key question is: How frantic should one get about FRAND in EU competition law?