FRAND patent agreements - Not everyone is playing by the rules

FRAND patent agreements - Not everyone is playing by the rules

What is a FRAND? A fair, reasonable and nondiscriminatory patent agreement - and vitally important in today's environment

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What's in a FRAND? Everything, it turns out, as the increasingly bitter smartphone wars reveal that - when it comes to patented technologies used within industry standards - not everyone is playing according to the rules.

In the Apple-versus-everybody camp, you see those who control industry standards patents attempting to impose what appear to be iniquitous terms against some of their competitors.


This is what has led the European Commission to launch an investigation into Samsung, and what has caused Motorola to attempt to steal more than 2% of Apple's iPhone income, in exchange for that company's use of the IP contained within established industry standards. That's a huge problem for Apple, and also exposes a huge flaw in the way the patent system works.

R&D innovation shows us the best way to survive recession is to continue to develop new ideas, new products and to grow new business.

Patent law exists to protect any company that has developed new ideas, but there's a category of patent - a so-called "FRAND patent agreement" (Fair, Reasonable and Nondiscriminatory) in which industry players agree to make their IP available to everyone else in exchange for their inclusion within an industry standard, 3G, for example.

Thing is, people aren't keeping their promises.

This has led Apple to appeal to the European Telecommunications Standards Institute (ETSI), asking that it work to enforce a consistent licensing scheme for the many patents you need to make mobile devices. The company clearly thinks an attempt to harmonise the way the licensing works would benefit itself, but such standardisation would in truth benefit everyone.

"It is apparent that our industry suffers from a lack of consistent adherence to FRAND principles in the cellular standards arena," Apple's letter states, as reported by Foss Patents.

It doesn't matter what industry you are in; you need a transparent patent licensing procedure when it comes to licensing elements of what is an industry standard.

Transparency. It isn't right that some IP owners with FRAND technologies to licence act in a partial manner when it comes to agreeing such licenses. As Florian Mueller puts it: "The problem with unreasonable people or companies is never that they want to be unreasonable by their own standards. It's always that they have a distorted coordinate system within which they consider something reasonable that truly reasonable people consider unreasonable. That's why it's meaningless to promise reasonableness without particularity."

Apple is demanding:

  • appropriate royalty rates.
  • a common royalty base.
  • no injunction: Given agreed royalty rates for licensing this IP, Apple argues that injunctions shouldn't be supported while negotiations are taking place.

This is a big deal, because Google is purchasing Motorola Mobility. That company holds a host of patents that relate to mobile technologies, many under FRAND licensing agreements. But Motorola's recent actions suggest a partial approach to FRAND. In an attempt to avoid regulatory oversight, Google will this week write to dozens of different standards organizations to reassure them that it will handle FRAND negotiations "fairly". Just Google the word, and you'll be surprised at its many potential meanings.

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  • Waterman Having patented different products for over 40 years and licenced one with some success I now have my second and I want to license using the FRAND system if anyone out there has any advice please reply My latest design has been searched worldwide and nothing similar has been registered The project is too big for me and I want to license it via the ISO and get world coverage Being a small simplemechanical product with a limited number of components soit shouldnt run into the problems that high tech products have with licencing Any advice would be welcome from those with experience of licensing
  • fredricwilliams The one-time dominance of the aerospace business by the US can be credited to a large extent to a government-mandated patent agreement that allowed all manufacturers to use the patents of othersSomehow over the centuries since kings gave their royal command to benefit the fortunate few we have forgotten that the purpose of granting this privilege and copyright similarly is to benefit the public Instead we have the company that gets the idea first even if another company gets it an hour later able to prevent the use of valuable ideas for two decades or more than a hundred years for copyrightThe tail is wagging the dog -- or more accurately the lobbyists and lawyers are bilking the public
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