FRAND Royalties

Overview

In recent years, the licensing of standard essential patents (SEPs) has become an increasingly contentious issue between patent holders and implementers, frequently spilling over into high-stakes litigation. Attempting to balance the interests of SEP holders and manufacturers of complex products, standard-setting organizations typically require companies to license their SEPs on fair, reasonable, and non-discriminatory (FRAND) terms in order to reduce the risk of holdup and royalty stacking to manufacturers, while still providing SEP holders compensation for their patent technologies.

Edgeworth experts have been at the forefront of many of the highest-profile cases in the FRAND area, as well as numerous other litigations and arbitrations in the US and worldwide. Our economists employ rigorous economic methodologies, tailored to the specifics of a case, to provide clients with objective, reliable analyses. We have provided expert testimony and consulting on a range of FRAND-related issues, including determining FRAND royalty rates and assessing whether licensing terms and behaviors are consistent with FRAND obligations. Edgeworth frequently advises both patent holders and implementers in licensing negotiations, leveraging our extensive litigation experience.

Edgeworth economists have worked extensively on FRAND issues related to numerous standards, including:

  • LTE, 3G and 2G standards. Edgeworth has represented top handset manufacturers and cellular SEP holders, including Samsung, HTC, Motorola/Google, and TCL.
  • 11 Wi-Fi. Our team has represented both device and chip manufacturers, such as Cisco, Netgear, D-Link, and Realtek.
  • Other standards. Edgeworth has been retained by multinational clients to analyze FRAND issues related to a number of other standards, including NFC, Video Compression (H.264), 802.3 (Power over Ethernet), MoCa, and Blu-ray.

The determination of a FRAND royalty depends on case-specific factors. Edgeworth experts assist clients in answering a range of economic questions arising in FRAND litigations, including:

  • What non-infringing alternatives were available at the time of standardization?
  • How do existing licensees affect the patent holder’s “non-discriminatory” component of its FRAND obligation?
  • What should be the total royalty burden associated with the standard as a whole, how many patent holders are there and how will it affect the “stack” of royalties? 
  • Given that the economic value of patents varies widely, what methodologies account for the potentially thousands of technologies necessary to implement the standard while still allowing major innovations to receive a relatively larger share of the royalty burden? 

 

Case Experience

Case Experience

Insights & News

Publications

Speaking Engagements

  • Event, 09.07.2018

    In this webcast, Edgeworth Partner Dr. Mario A. Lopez will join other thought leaders to help you better understand the legal implications of the TCL v. Ericsson ruling and how to handle these developments moving forward.

  • Event, 05.05.2018

    Edgeworth Partner Dr. Gregory Leonard will discuss the implications of a single international forum resolving FRAND globally and whether forum selection is now the most important strategy decision.

  • Event, 02.09.2018

    China has become a hot litigation battlefield for SEP owners and prospective licensees. In this ABA webinar, Edgeworth Partner Dr. Fei Deng and her fellow panelists will discuss their first-hand experiences litigating SEP cases in China.

  • Event, 11.28.2017

    Edgeworth Partner Dr. Mario Lopez will participate on a panel of key thought leaders and practitioners, who will offer a discussion of the methodologies used in determining FRAND royalties as well as updates regarding the latest and significant issues surrounding the topic.

  • Event, 09.24.2013

    Drs. Fei Deng and Gregory Leonard were invited to present on economic analyses used in intellectual property and antitrust litigation involving standard essential patents (SEPs) to a group of judges from the Intellectual Property Tribunal at the Supreme People’s Court of China.

News

Practice Contacts

Experts

A company that contributes patents to a standard setting organization typically agrees to license its patented technologies on a fair, reasonable and non-discriminatory (FRAND) basis. If such a company seeks injunctive relief for patent infringement through the ITC, the question arises of whether such actions are consistent with its FRAND commitments. 

Jump to Page

This website uses cookies to improve functionality and performance. By continuing to use this website, you agree to the use of cookies in accordance with our Privacy Policy