Treating RAND Commitments Neutrally

Einer Elhauge

Harvard Law School

July 17, 2014

Forthcoming in Journal of Competition Law and Economics

This Article argues that the same legal standards should apply to RAND commitments whether they are made to standard-setting organizations or not. The arguments for concluding that RAND commitments should limit injunctive patent relief or trigger antitrust liability turn on whether the commitment reasonably induces lock-in that generates hold-up effects or market power when that commitment is breached. But RAND commitments can induce such lock-in effects when they are made outside of standard-setting organizations and do not always induce them when they are made to standard-setting organizations. Thus, any special legal rules for RAND commitments should turn on whether the commitments induced such lock-in, rather than on the institutional context. The arguments against using special legal rules for RAND commitments turn on the extent to which lock-in might fail to generate holdup problems, denying patent injunctions might generate reverse-holdup problems, and contract or promissory estoppel remedies might obviate the need for antirust liability. But those arguments likewise apply equally inside and outside of standard-setting organizations. Thus, however one resolves the arguments for and against applying special legal rules to RAND commitments, the resulting legal standards should be the same whether or not the commitment is made to a standard-setting organization.

Number of Pages in PDF File: 32

Keywords: RAND, FRAND, patent, antitrust, standard, SSO, holdup, lock-in

JEL Classification: K21, L12, L41, O31, O34

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Date posted: February 21, 2014 ; Last revised: July 18, 2014

Suggested Citation

Elhauge, Einer, Treating RAND Commitments Neutrally (July 17, 2014). Forthcoming in Journal of Competition Law and Economics. Available at SSRN: http://ssrn.com/abstract=2398579 or http://dx.doi.org/10.2139/ssrn.2398579

Contact Information

Einer R. Elhauge (Contact Author)
Harvard Law School ( email )
1575 Massachusetts
Hauser 406
Cambridge, MA 02138
United States
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