20 May 2016Jurisdiction reportsMaria Zamkova

Sweden: FRAND is our friend

“Fair” describes terms which are not anti-competitive and would not be considered unlawful if imposed by a dominant firm in the market. “Reasonable” refers to the licensing rates, considering both the importance of avoiding a significant increase in cost to the relevant industry as well as giving the licensor a reasonable and adequate compensation. “Non-discriminatory” is an obligation to treat all licensees in a similar way.

Not everyone on the market accepts FRAND. The Free Software Foundation for example states that “FRAND is a FRAUD”, as it discriminates against free software, “which is neither fair nor reasonable”.

Other objections against FRAND point to some uncertainties, such as: a) ‘per-copy fees’ as being too hard to estimate in a reasonable way, especially if a distributor wants to offer the software free of charge to its customer as part of a combined agreement; b) the term “reasonable” related to the price is still not defined in a clear way; c) an agreement applying only to complete implementations limits the available number of downstream modifications; and d) restrictions to make copies also automatically exclude common software distribution models.

However, there is continuous work on creating both a decent case law practice and internationally accepted policies for FRAND.

The World Intellectual Property Office’s (WIPO) Arbitration and Mediation Center makes available tailored model submission agreements that parties may refer to in a dispute concerning the determination of FRAND terms. These are created in cooperation with leading patent law, standardisation and arbitration experts from a number of countries, as well as the European Telecommunications Standards Institute.

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