66 Pages Posted: 17 Nov 2014 Last revised: 9 Jan 2016
Date Written: December 28, 2015
An increasing number of firms are making public pledges to limit the enforcement of their patents. In doing so, they are entering a little-understood middle ground between the public domain and exclusive property rights. The best-known of these patent pledges are FRAND commitments, in which patent holders commit to license their patents to manufacturers of standardized products on terms that are “fair, reasonable and non-discriminatory.” But patent pledges have been appearing in settings well beyond standard-setting, including open source software, green technology and the life sciences. As a result, this increasingly prevalent private ordering mechanism is beginning to reshape the role and function of patents in the economy.
But despite their proliferation, virtually no serious thought has been devoted to the phenomenon of patent pledges beyond FRAND commitments and standard-setting. This article fills this gap by providing the first comprehensive descriptive account of patent pledges across the board. It offers a four-part taxonomy of patent pledges based on the factors that motivate patent holders to make them and the effect they are intended to have on other market actors. Using this classification system, it argues that pledges likely to induce reliance in other market actors should be treated as “actionable” and legally-enforceable, whereas others should not. And to provide the highest degree of market awareness and enforceability for actionable pledges, it calls for the creation of a state-sponsored public registry of patent pledges, accompanied by suitable governmental incentives for registration.
Keywords: patent, pledge, FRAND, RAND, standards, SDO, eco-patent commons, tesla, open source, DPL
JEL Classification: K00, K12, L63, L96, O34
Suggested Citation: Suggested Citation