Courts have increasingly been asked to resolve disputes that relate to patents that read on industry standards. A commentator (see Economist article below) notes in the 1990's the US had only two FRAND disputes, while since 2008 the US had 17 FRAND disputes.
How patents relate to standards can be confusing. First, standards are set by committee, very technical, and once adopted taken for granted. Even well known standards such as the protocols for Wi-Fi can be quite technical for many and run thousands of pages. After you digest the technical details of the standard, you have thousands of patents that are declared essential to the standard but unsurprisingly use different terminology. Further, you have quirky terms surrounding the standards such as SSOs (standard setting organizations), FRAND (Fair, Reasonable and Non-Discriminatory) terms, SEP (Standard Essential Patents), and funny concepts like hold-up (Reach for the sky!), and royalty-stacking.
We can't blame the confusion on academics as we have had lots of informative articles on legal aspects of standards. See e.g., Stanford professor Mark Lemley and Cal professor Carl Shapiro's A Simple Approach to Setting Reasonable Royalties for Standard-Essential Patents.
If you need an introduction, I recommend The Economist article Standard procedure - If companies cannot agree on "reasonable" patent royalties, courts must decide. How? It should make standards less mystifying. The article also describes how federal district court judge Robart set the FRAND royalty rates that Microsoft should pay Google for licensing the Motorola Mobility patents relating to IEEE 802.11 (Wi-Fi) and H.264 (Advanced Video Coding).
Copyright © 2013 Robert Moll. All rights reserved.
