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Standard-essential patent owners should begin by considering three major questions when crafting a strategy for licensing patents on fair, reasonable and non-discriminatory terms, say Steven Pepe, Kevin Post and Samuel Brenner of Ropes & Gray.
The owner of a patent that is essential to an industry standard (a standard-essential patent, or SEP) may be tempted to abuse the market power afforded by that patent’s inclusion into that standard to “hold up” implementers by demanding excessive royalties.
To address this danger, most standard-setting organisations require that SEP owners commit to licensing their SEPs on fair, reasonable, and non-discriminatory (FRAND) terms. Of course, determining exactly what FRAND terms are in any given case remains challenging.
Before starting a licensing campaign, SEP owners should carefully consider how to structure their licensing offers (and agreements) in light of their ultimate end goals. This consideration will likely be driven by, among other things, the market(s) or standard(s) at issue and concerns over complying with their FRAND obligations.
FRAND, standard-essential patents, patent licensing, standard-setting, patent strategy, portfolio, Ropes & Gray