Fostering worldwide interoperabilityGeneva, 13-16 July 2009
Recommendations on FRAND Principle in IPR Policy
CCSA
Global Standards Collaboration (GSC) 14
DOCUMENT #: GSC14-IPR-006
FOR: Presentation or Information
SOURCE: CCSA
AGENDA ITEM: IPR WG Agenda Item 6 and Item 7
CONTACT(S): Congxing Ouyang
Fostering worldwide interoperability2
Existing IPR Policy
For most of SDOs, the current existing IPR Polices:
Require members to disclose as earlier as possible potential
essential patents during the process of standardization.
For the disclosed patents, require the relevant patent holders to
provide licensing declaration, such as declaration of royalty-free
license, FRAND license or refusal to license. Most patent holders
will choose the option of FRAND license .
The existing IPR Polices, especially the FRAND principle
thereof, have produced positive effects on the making and
implementation of standards.
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Vagueness exists in the concept of FRAND
However, FRAND licensing declaration without specific
terms is vague, and is helpless to avoid the IPR-blocking
risk
Licensors and licensees have different expectations to what
is FRAND, and such different expectations have resulted in
many disputes in practical licensing negotiation, and thus
discouraged the implementation of standard, and hurt the
healthy development of the industry.
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Recommendations
As is well known, a reasonable royalty for a patented
invention should be based on the value attributable to the
invention’s contribution over the prior art. For a
standardized technology, reasonable royalties should be
based on the value contributed by the technology.
Therefore, we recommend to make some clarification to the
definition of FRAND as to include the following items:
Royalty rate should be based on the value of module, which
indicates the substantially contribution of a standardized
technology.
Royalty for one patented invention can only be charged at one link,
rather than two or more links, in the industrial chain.
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Effects of the Recommendations
If the recommendations are accepted and abided by
in licensing practices, the following beneficial effects
can be achieved:
The determination on the reasonability of the royalty rate
will become more intuitionistic, and thus improve the
predictability and transparency of IPR cost with respect to
implementation of standards, ensure the healthy and
continuing development of the industry, and finally promote
the contribution of the standardized technologies to social
progress and consumer welfare.
Fostering worldwide interoperability
Thank you for your attentions!