FRAND – which is a commitment to license on Fair, Reasonable and Non-Discriminatory terms – must have a clearer meaning in order for standards to promote innovation, economic growth, competition, and consumer choice. The Alliance believes that FRAND should, for example, mean the following (but not in any order of importance):
- A license for a SEP should be available at any point in the value chain where the standard is implemented, and the important terms of those licenses should be transparent to other companies implementing the same standards;
- A FRAND royalty should reflect the value of the invention. In most cases that means that it should be based on the smallest device that implements those patents, and additionally it should take into account the overall royalty that could be reasonably charged for all patents that are essential to that standard;
- Injunctions and similar legal threats should be a last resort;
- A FRAND commitment made in respect of a SEP should not fall away simply because the SEP is sold to another company.
Download our position paper for further details.