Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Tuesday, September 29, 2020

Standard-Essential Patents and FRAND Licensing—At the Crossroads of Economic Theory and Legal Practice

Standard-Essential Patents and FRAND Licensing—At the Crossroads of Economic Theory and Legal Practice

 
  • The Huawei v. ZTE judgment provides the framework for efficient party negotiations. This doctrine not only establishes a court-guided system of offer-and-counter-offer structures but also requires the court—when negotiations have failed—to scrutinise and determine concrete FRAND conditions.

  • In cases of a ‘double FRAND stalemate’ (i.e., when both sides have submitted a FRAND offer but no agreement has been reached), courts must analyse each offer in light of its capacity to enable a negotiated agreement. Rule of thumb: the more flexible and open to compromise the offer, the higher its chances of being FRAND.

  • The FRAND commitment also implies the use of a royalty base in accordance with the so-called SSPPU rule. Furthermore, SEP owners are obliged to enter into good-faith licensing negotiation with any actor at any market level or level in the supply chain (license-to-all approach).

https://lawprofessors.typepad.com/antitrustprof_blog/2020/09/standard-essential-patents-and-frand-licensingat-the-crossroads-of-economic-theory-and-legal-practic.html

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