FRAND Obligation’s Antitrust Consequences May Linger After Patent Finds New Home

Article by Donald M. Falk , Edward D. (Ward) Johnson and Christopher J. Kelly

Originally published March 16, 2010

Keywords: FRAND, SSO, antitrust, license, A/65 standard, Vizio, Funai, Broadcom, Qualcomm

Technology standard-setting organizations (SSOs) often require the owner of a patent that is essential to an industry standard to commit to license that patent on terms that are fair, reasonable and non-discriminatory (FRAND). Signaling a potential expansion of that duty, a Los Angeles federal court recently suggested that a former owner of an essential patent may face antitrust claims for an assignee's failure to license on FRAND terms. The decision raises questions about whether a patent owner remains under a FRAND obligation even after it conveys away ownership of a standard-essential patent.