Take the 2-minute tour ×
Ask Patents is a question and answer site for people interested in improving and participating in the patent system. It's 100% free, no registration required.

Trials involving Google, Motorola, Microsoft and Apple about patents and especially FRAND patents are hitting the news everyday. But who decides a patent has to be offered under FRAND terms?

Obviously, the owner of the patent can decide it himself, for example under the pressure of standard organizations, but can anybody else impose it to him? For example a court?

share|improve this question
Have you read FRAND / RAND patents? –  Gilles Jan 8 '13 at 18:35
Yes, but I couldn't find a definitive answer to this question. –  Alexis Dufrenoy Jan 8 '13 at 19:01
add comment

2 Answers

up vote 2 down vote accepted

A US court (sorry not knowledgeable about EU antitrust) may impose (F)RAND licensing if the holder of the patent typically licenses the patents under a (F)RAND scheme but blows the ND (non-discriminatory) part .

For example, if Phillips typically licenses all its DVD patents under (F)RAND terms to DVD reader manufacturers, but then suddenly decides to charge Apple 100% more to make their own DVD reader drives, a court may force Phillips to license those patents to Apple under terms that are less discriminatory.

This is a gross simplification, but hopefully it's helpful. US courts don't force FRAND terms out of the blue. A patent, at it's heart, is a right to exclude and forcing a company to license that right (when they have made no commitment to do so) isn't part of the patent bargain.

This (quick scan by me) looks like a great overview of current (F)RAND policy and pretty up to date with recent litigation/regulation.

[update] DOJ just released a position paper on these licensing schemes yesterday. Interesting reading: http://www.justice.gov/atr/public/guidelines/290994.pdf

[Another update for posterity...] On April 25, 2013, Judge James Robart in the Western District of Washington issued an 207-page decision that marks the first time a federal judge has tried to define what constitutes a fair, reasonable, and nondiscriminatory (FRAND) royalty rate for standard-essential patents. The decision provides a rigorous factual and legal analysis for determining a FRAND rate by modifying the factors traditionally used to determine reasonable royalty calculations in patent infringement suits and adapting that framework for the circumstances presented by patents that are essential to industry standards.

share|improve this answer
Actually, the court only forces the patent holder to respect its own decision after the patent holder declared a patent is (F)RAND. A (F)RAND statement would be useless if it could be cancelled. Which means only a patent holder can declare its patent as (F)RAND. That's what I thought. –  Alexis Dufrenoy Jan 9 '13 at 9:02
Isn't that exactly what I said? –  EntropyWins Jan 9 '13 at 15:07
FYI European competition law tends to be stricter as a whole than recent US antitrust, so there might be some funny business with forced licenses over there especially as part of a larger consent agreement with regulators. –  EntropyWins Jan 9 '13 at 15:10
I only wanted to summarize to make sure I really understood well. My comment was not intended to contradict your answer. Sorry if I was misleading... –  Alexis Dufrenoy Jan 9 '13 at 19:45
No problem, just concerned you might have misunderstood me originally. Cheers. –  EntropyWins Jan 10 '13 at 20:23
add comment

Patents are subject to RAND/FRAND commitments if the patent holder is part of a standards-development organization (SDO) that imposes this requirement on its participants. Such SDOs are typically voluntary membership organizations that any interested party can join, so long as they agree to the SDO's policies (including its FRAND policy).

A FRAND commitment usually applies to any patents that are "essential" to implementing a particular standard. The term "essential" generally means technically necessary to implement the standard, but some SDOs have also experimented with including in this term other patents that are commercially essential to products implementing the standards.

One big question is who decides whether a patent is "essential" to a standard. Generally, the patent holder is required to declare what patents are essential to the SDO. This disclosure is voluntary, and is not double-checked by the SDO. However, there are significant risks associated with NOT disclosing all essential patents when an SDO's rules require such disclosure (e.g., possible unenforceability of patents under the theories established in the FTC's consent order with Dell (1998), and cases involving Rambus and Qualcomm).

For a brief discussion of these issues in the context of how some major companies have interpreted FRAND you can see: http://www.patentlyo.com/patent/2012/03/february-of-frand.html

share|improve this answer
add comment

Your Answer


By posting your answer, you agree to the privacy policy and terms of service.

Not the answer you're looking for? Browse other questions tagged or ask your own question.