The role of IP rights in standards; the meaning of the obligation imposed by many standards bodies on essential patent holders to licence on fair, reasonable, and non-discriminatory (‘FRAND’) terms; the example of IPR policy of the European Telecommunications Standards Institute; recent US developments.
Industry standards are of key commercial and technical significance. Yet many standards are currently burdened by litigation between essential patent holders and licensees. Such standards bodies have been slow to give guidance on the meaning of the obligations imposed on essential patent holders. This article takes the example of the obligation to licence essential patents on FRAND terms, analysing the obligation in the context of European competition law. The article concludes with some suggestions for points for companies to include in their internal policies on licensing standards essential patents.
The meaning of the obligation to licence on FRAND terms is very important for licensors and licensees alike. This article puts the obligation in context and discusses the various approaches which may be taken in practice.