Judicially Determined FRAND Royalties
The Cambridge Handbook of Technical Standardization Law, Jorge L. Contreas, ed., Cambridge University Press, Forthcoming
30 Pages Posted: 10 Jan 2016 Last revised: 25 Jul 2017
Date Written: January 8, 2016
This chapter from the forthcoming Cambridge Handbook of Technical Standardization Law reviews the principles and methodologies courts have used for calculating royalties for the infringement of standard-essential patents (SEPs) that the owner is obligated to license on fair, reasonable and non-discriminatory (FRAND) terms. As we show, in the cases so far in which courts have made final judicial determinations of FRAND royalties -- the U.S. decisions in Microsoft, Innovatio, Ericsson, and CSIRO, the Japanese Apple v. Samsung judgment, the Chinese Huawei v. InterDigital matter, and the English Unwired Planet v. Huawei case -- have tended to focus on a relatively small number of additional considerations beyond the generally applicable principles used for calculating reasonable royalties. Although reasonable minds may disagree with specific features of the relevant decisions, overall the courts (correctly, in our view) have emphasized that the owner of an SEP should receive a royalty that is proportionate to the technology’s contribution to the value of standard -- a principle which, when properly applied, reduces concerns over the potential for SEPs to induce holdup and royalty stacking.
Keywords: Patents, Remedies, Damages, FRAND, RAND, Standard-Essential Patents, Royalties, Comparative Law, Intellectual Property
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