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A NAASTy Alternative to RAND Pricing Commitments

Author

Listed:
  • Marc Rysman

    (Department of Economics, Boston University)

  • Timothy Simcoe

    (Boston University School of Management and NBER)

Abstract

Voluntary standard setting organizations (SSOs) typically require participants to disclose their patents during the standard-setting process, and will endorse a standard only if patent holders commit to license them on “reasonable and non-discriminatory” or RAND terms. We argue that this policy is unworkable—the RAND standard is ambiguous and thus extremely hard to adjudicate. As an alternative, we propose a policy of Non-Assertion After Specified Time, or NAAST pricing. Under NAAST, technology vendors commit not to assert their patent after some previous specified time, but would be free to collect royalties as they wish up until that point. Under our proposal, technology producers would be compensated, vendors would have quick and eventually free access to standards and a large element of uncertainty due to litigation would be eliminated.

Suggested Citation

  • Marc Rysman & Timothy Simcoe, 2010. "A NAASTy Alternative to RAND Pricing Commitments," Boston University - Department of Economics - Working Papers Series WP2010-056, Boston University - Department of Economics.
    • Handle: RePEc:bos:wpaper:wp2010-056
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    References listed on IDEAS

    as
    1. Anne Layne-Farrar & A. Jorge Padilla & Richard Schmalensee, 2007. "Pricing Patents for Licensing in Standard Setting Organizations: Making Sense of FRAND Commitments," Working Papers wp2007_0702, CEMFI.
    2. Marc Rysman & Timothy Simcoe, 2008. "Patents and the Performance of Voluntary Standard-Setting Organizations," Management Science, INFORMS, vol. 54(11), pages 1920-1934, November.
    3. Nancy T. Gallini, 1992. "Patent Policy and Costly Imitation," RAND Journal of Economics, The RAND Corporation, vol. 23(1), pages 52-63, Spring.
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