Download This PaperPreserving the Royalty-Free Standards Ecosystem
USC CLASS Research Paper No. CLASS22-40
USC Law Legal Studies Paper No. 22-40
University of Utah College of Law Research Paper No. 524
Eur. Intell. Prop. Rev. 45(7): 371-375 (2023)
8 Pages Posted: 5 Oct 2022 Last revised: 5 Jul 2023
Date Written: October 28, 2022
Abstract
It has long been recognized in Europe and elsewhere that standards-development organizations (SDOs) may adopt policies that require their participants to license patents essential to the SDO’s standards (standards-essential patents or SEPs) to manufacturers of standardized products (“implementers”) on a royalty-free (RF) basis. This requirement contrasts with SDO policies that permit SEP holders to charge implementers monetary patent royalties, sometimes on terms that are specified as “fair, reasonable and nondiscriminatory” (FRAND). As demonstrated by two decades of intensive litigation around the world, FRAND royalties have given rise to intractable disputes regarding the manner in which such royalties should be calculated and adjudicated. In contrast, standards distributed on an RF basis are comparatively free from litigation and the attendant transaction costs. Accordingly, numerous SDOs around the world have adopted RF licensing policies and many widely adopted standards, including Bluetooth, USB, IPv6, HTTP, HTML and XML, are distributed on an RF basis. This note briefly discusses the commercial considerations surrounding RF standards, the relationship between RF standards and open source software (OSS) and the SDO policy mechanisms – including “universal reciprocity” -- that enable RF licensing to succeed in the marketplace.
Keywords: standards, patent, royalty-free, FRAND, Bluetooth, USB, IETF, ISO, ETSI, antitrust, competition, open source, software, copyleft
JEL Classification: K11, L15, O34, O36
Suggested Citation: Suggested Citation
Jorge L. Contreras (Contact Author)
University of Utah - S.J. Quinney College of Law ( email )
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Brad Biddle
Arizona State University (ASU) - College of Law ( email )
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Michael A. Carrier
Rutgers Law School ( email )
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Bernard H. Chao
University of Denver Sturm College of Law ( email )
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Erik Hovenkamp
Cornell University - Law School ( email )
Myron Taylor Hall
Cornell University
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Martin Husovec
London School of Economics - Law School ( email )
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London WC2A 2AE, WC2A 2AE
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Brian J. Love
Santa Clara University - School of Law ( email )
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Santa Clara, CA 95053
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Jason Schultz
New York University School of Law ( email )
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New York, NY 10012-1099
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Jennifer M. Urban
University of California, Berkeley - School of Law ( email )
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