FRAND Arbitration: The Determination of Fair, Reasonable and Non-Discriminatory Rates for SEPs by Arbitral Tribunals

Abstract

At the core of most disputes concerning the licensing of standard-essential patents (SEPs) lies the inability of the SEP holder and the standard implementer to agree on fair, reasonable and non-discriminatory (FRAND) license terms. As an alternative to court litigation, a growing number of academics, agency officials and private practitioners have advocated arbitration of SEP-related disputes, and there is anecdotal evidence that are increasingly relying on arbitration to settle such disputes. The purpose of this paper is to discuss based on the author’s personal experience how arbitral proceedings to set FRAND terms work in practice, as well as the various challenges faced by arbitrators, parties, and counsel involved in such proceedings.

Keywords: standardization, patents, standard-essential patents, hold up, FRAND, arbitration

JEL Classification: K11, K21, K42, L41