A NAASTy Alternative to RAND Pricing Commitments

Telecommunications Policy, 35(11): 1010–1017, December 2011

21 Pages Posted: 2 Jan 2012 Last revised: 25 May 2014

See all articles by Marc Rysman

Marc Rysman

Boston University - Department of Economics

Timothy Simcoe

Boston University - Questrom School of Business; NBER

Date Written: July 19, 2011

Abstract

Voluntary standard setting organizations (SSOs) typically require participants to disclose their patents during the standard-setting process, and will endorse a standard only if patent holders commit to license them on “reasonable and non-discriminatory” or RAND terms. We argue that this policy is unworkable — the RAND standard is ambiguous and thus extremely hard to adjudicate. As an alternative, we propose a policy of Non-Assertion After Specified Time, or NAAST pricing. Under NAAST, technology vendors commit not to assert their patent after some previous specified time, but would be free to collect royalties as they wish up until that point. Under our proposal, technology producers would be compensated, vendors would have quick and eventually free access to standards and a large element of uncertainty due to litigation would be eliminated.

Keywords: Standards, compatibility, patents, licensing, FRAND, hold-up

JEL Classification: O34, L15, D71

Suggested Citation

Rysman, Marc and Simcoe, Timothy S., A NAASTy Alternative to RAND Pricing Commitments (July 19, 2011). Telecommunications Policy, 35(11): 1010–1017, December 2011, Available at SSRN: https://ssrn.com/abstract=1978437

Marc Rysman (Contact Author)

Boston University - Department of Economics ( email )

270 Bay State Road
Boston, MA 02215
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617-353-3086 (Phone)
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Timothy S. Simcoe

Boston University - Questrom School of Business ( email )

595 Commonwealth Avenue
Boston, MA MA 02215
United States

NBER ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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