Strategic Considerations In Litigating FRAND Royalty Rates For Standard Essential Patents

Many strategic considerations influence negotiations to license patents that protect the intellectual property incorporated in technical standards. This article analyzes some of these factors and how they should impact a party's evaluation of how to conduct negotiations for a royalty rate for patents that cover technical standards, and when to cease negotiations and initiate litigation.

Standards provide the framework for many technological innovations. They enable coordination and interoperability of technological devices developed by different entities. Examples of commonly used standards include WiFi, HTTP, MP3, USB, and LTE. These standards enable internet and wireless communication, the connection of computers to peripheral devices, sharing and streaming of audio files, and cellular communication, among other technologies. Standards are typically defined, developed, and propagated by standard setting organizations, or standard developing organizations ("SSOs"