On the “non-discrimination” aspect of FRAND licensing: A response to the Indian Competition Commission's recent orders

The Indian Competition Commission has recently challenged Ericsson's practice of licensing its standards-essential patents (SEPs), relating to cellular standards, for percentage-based royalties based on the selling prices of the end-user licensed products. Ericsson had committed to the relevant...

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Bibliographic Details
Main Authors: David J. Teece, Edward F. Sherry, Peter C. Grindley
Format: Article
Language:English
Published: Elsevier 2018-03-01
Series:IIMB Management Review
Online Access:http://www.sciencedirect.com/science/article/pii/S0970389617305098
Description
Summary:The Indian Competition Commission has recently challenged Ericsson's practice of licensing its standards-essential patents (SEPs), relating to cellular standards, for percentage-based royalties based on the selling prices of the end-user licensed products. Ericsson had committed to the relevant standards-development organisation that it would license its SEPs on “fair, reasonable and non-discriminatory” (“FRAND”) terms. The Commission contends that such royalties are “prima facie discriminatory” in violation of the Competition Act, in the (novel) sense that different products selling for different prices pay different per-unit royalties. We analyse the broader implications of the Commission's reasoning, concerned that if adopted, the Commission's reasoning would disrupt common industry licensing practices. Keywords: Patents, Licensing, Discrimination, Telecommunications, FRAND, Standards, Industry practice
ISSN:0970-3896