ARTICLE · 08 JULY 2024

Validating That Royalties Inferred From "Comparable" SEP Licences Are FRAND

Compass Lexecon

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When courts or arbitrators determine the fair, reasonable, and non-discriminatory (FRAND) royalty for a disputed standard essential patent (SEP) licence, they often prefer to do so informed by "comparable contracts" – that is, the prices that parties agreed for similar licences in similar situations.

United KingdomIntellectual Property

Pekka Sääskilahti

When courts or arbitrators determine the fair, reasonable, and non-discriminatory (FRAND) royalty for a disputed standard essential patent (SEP) licence, they often prefer to do so informed by "comparable contracts" – that is, the prices that parties agreed for similar licences in similar situations. Pekka Sääskilahti and Andrew Tuffin ¹ explore how inference based on comparable contracts can be improved by using a "cross-check" – comparing the price proposed for the licence with the benefits it provides. They also discuss the strengths and weaknesses of the most commonly used cross-checks.

Introduction

When courts or arbitrators are asked to determine the fair, reasonable, and non-discriminatory (FRAND) royalty for a disputed standard essential patent (SEP) licence, often they prefer to do so informed by the terms and conditions agreed in "comparable contracts" – that is, the prices that similar parties agreed for similar licences in similar situations.

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