Preserving the Royalty-Free Standards Ecosystem

8 Pages Posted: 5 Oct 2022 Last revised: 5 Jul 2023

See all articles by Jorge L. Contreras

Jorge L. Contreras

University of Utah - S.J. Quinney College of Law

Rudi Bekkers

Eindhoven University of Technology (TUE)

Brad Biddle

Arizona State University (ASU) - College of Law

Enrico Bonadio

City University London - The City Law School

Michael A. Carrier

Rutgers Law School

Bernard Chao

University of Denver Sturm College of Law

Charles Duan

American University Washington College of Law

Richard Gilbert

University of California, Berkeley

Joachim Henkel

TUM School of Management - Technical University of Munich (TUM)

Erik Hovenkamp

Cornell University - Law School

Martin Husovec

London School of Economics - Law School

Kai Jakobs

RWTH Aachen University

Dong-hyu Kim

University of Glasgow

Mark A. Lemley

Stanford Law School

Brian J. Love

Santa Clara University - School of Law

Luke McDonagh

LSE Law; London School of Economics and Political Science

Fiona M. Scott Morton

Yale School of Management; National Bureau of Economic Research (NBER)

Jason Schultz

New York University School of Law

Timothy Simcoe

Boston University - Questrom School of Business; NBER

Jennifer M. Urban

University of California, Berkeley - School of Law

Joy Y Xiang

Peking University School of Transnational Law

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

Contreras, Jorge L. and Bekkers, Rudi and Biddle, Brad and Bonadio, Enrico and Carrier, Michael A. and Chao, Bernard H. and Duan, Charles and Gilbert, Richard and Henkel, Joachim and Hovenkamp, Erik and Husovec, Martin and Jakobs, Kai and Kim, Dong-hyu and Lemley, Mark A. and Love, Brian J. and McDonagh, Luke and Scott Morton, Fiona M. and Schultz, Jason and Simcoe, Timothy S. and Urban, Jennifer M. and Xiang, Joy, Preserving the Royalty-Free Standards Ecosystem (October 28, 2022). 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), Available at SSRN: https://ssrn.com/abstract=4235647 or http://dx.doi.org/10.2139/ssrn.4235647

Jorge L. Contreras (Contact Author)

University of Utah - S.J. Quinney College of Law ( email )

383 S. University Street
Salt Lake City, UT 84112-0730
United States

Rudi Bekkers

Eindhoven University of Technology (TUE) ( email )

Den Dolech 3, PO Box 513, Room IPO 2.40
Eindhoven, 5600MB
Netherlands

HOME PAGE: http://home.ieis.tue.nl/rbekkers/

Brad Biddle

Arizona State University (ASU) - College of Law ( email )

Box 877906
Tempe, AZ 85287-7906
United States

Enrico Bonadio

City University London - The City Law School ( email )

London, EC1V OHB
United Kingdom

HOME PAGE: http://www.city.ac.uk/law/

Michael A. Carrier

Rutgers Law School ( email )

217 North Fifth Street
Camden, NJ 08102-1203
United States
856-225-6380 (Phone)
856-225-6516 (Fax)

Bernard H. Chao

University of Denver Sturm College of Law ( email )

2255 E. Evans Avenue
Denver, CO 80208
United States

Charles Duan

American University Washington College of Law ( email )

4300 Nebraska Ave NW
Washington, DC 20016
United States

Richard Gilbert

University of California, Berkeley ( email )

Department of Economics
530 Evans Hall #3880
Berkeley, CA 94720
United States
510 339 6493 (Phone)

Joachim Henkel

TUM School of Management - Technical University of Munich (TUM) ( email )

Arcisstr. 21
Munich, D-80333
Germany

Erik Hovenkamp

Cornell University - Law School ( email )

Myron Taylor Hall
Cornell University
Ithaca, NY 14853-4901
United States

Martin Husovec

London School of Economics - Law School ( email )

Houghton Street
London WC2A 2AE, WC2A 2AE
United Kingdom

Kai Jakobs

RWTH Aachen University

No Address Available

Dong-hyu Kim

University of Glasgow ( email )

Adam Smith Business School
Glasgow, Scotland G12 8LE
United Kingdom

Mark A. Lemley

Stanford Law School ( email )

559 Nathan Abbott Way
Stanford, CA 94305-8610
United States

Brian J. Love

Santa Clara University - School of Law ( email )

500 El Camino Real
Santa Clara, CA 95053
United States

Luke McDonagh

LSE Law ( email )

United Kingdom

London School of Economics and Political Science ( email )

United Kingdom

Fiona M. Scott Morton

Yale School of Management ( email )

493 College St
New Haven, CT CT 06520
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Jason Schultz

New York University School of Law ( email )

40 Washington Square South
New York, NY 10012-1099
United States

HOME PAGE: http://rb.gy/am2zpr

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

Jennifer M. Urban

University of California, Berkeley - School of Law ( email )

342 Boalt Hall, North Addition
Berkeley, CA 94720-7200
United States
(510) 642-7338 (Phone)

HOME PAGE: http://www.samuelsonclinic.org

Joy Xiang

Peking University School of Transnational Law ( email )

University Town,
Xili, Nanshan District
Shenzhen, Guangdong 518055
China

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
382
Abstract Views
2,278
Rank
151,276
PlumX Metrics