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FRAND Royalties and Injunctions for Standard Essential Patents

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  • Jay Pil Choi

Abstract

I develop a stylized model of court procedures that resolve disputes concerning FRAND-encumbered standard essential patents (SEPs). I analyze the effects of injunctions and potential court-imposed FRAND rates on negotiated royalty rates. The SEP-holders’ ability to hold-up is constrained by the prospect of the court-imposed license terms in case of disputes, but is not completely eliminated. Possible mechanisms to address the residual hold-up power of the SEP-holders are discussed.

Suggested Citation

  • Jay Pil Choi, 2014. "FRAND Royalties and Injunctions for Standard Essential Patents," CESifo Working Paper Series 5012, CESifo.
    • Handle: RePEc:ces:ceswps:_5012
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    References listed on IDEAS

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    1. Dennis W. Carlton & Allan L. Shampine, 2013. "An Economic Interpretation Of Frand," Journal of Competition Law and Economics, Oxford University Press, vol. 9(3), pages 531-552.
    2. Hill Wellford, 2012. "Reasons to Reject a “No Injunctions†Rule for SEPs and FRAND-Obligated Patents," Antitrust Chronicle, Competition Policy International, vol. 4.
    3. Gregor Langus & Vilen Lipatov & Damien Neven, 2013. "Standard-Essential Patents: Who Is Really Holding Up (And When)?," Journal of Competition Law and Economics, Oxford University Press, vol. 9(2), pages 253-284.
    4. Gilbert, Richard J., 2011. "Deal or No Deal? Licensing Negotiations in Standard-Setting Organizations," Department of Economics, Working Paper Series qt6kv798tf, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    5. Lemley, Mark A & Shapiro, Carl, 2007. "Patent Hold-Up and Royalty Stacking," Competition Policy Center, Working Paper Series qt8638s257, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
    6. Bernhard Ganglmair & Luke M. Froeb & Gregory J. Werden, 2012. "Patent Hold-Up and Antitrust: How A Well-Intentioned Rule Could Retard Innovation," Journal of Industrial Economics, Wiley Blackwell, vol. 60(2), pages 249-273, June.
    7. James Ratliff & Daniel L. Rubinfeld, 2013. "The Use And Threat Of Injunctions In The Rand Context," Journal of Competition Law and Economics, Oxford University Press, vol. 9(1), pages 1-22.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Jens Leth Hougaard & Chiu Yu Ko & Xuyao Zhang, 2017. "A Welfare Economic Interpretation of FRAND," IFRO Working Paper 2017/04, University of Copenhagen, Department of Food and Resource Economics.
    2. Chryssoula Pentheroudakis, 2015. "Innovation in the European Digital Single Market: The Role of Patents," JRC Research Reports JRC96728, Joint Research Centre.
    3. Chryssoula Pentheroudakis & Justus A. Baron, 2016. "Licensing Terms of Standard Essential Patents: A Comprehensive Analysis of Cases," JRC Research Reports JRC104068, Joint Research Centre.
    4. Hougaard, Jens Leth & Ko, Chiu Yu & Zhang, Xuyao, 2023. "A conceptual model for FRAND royalty setting," Mathematical Social Sciences, Elsevier, vol. 123(C), pages 167-176.
    5. Horn, Henrik, 2020. "International Jurisdiction over Standard-Essential Patents," Working Paper Series 1314, Research Institute of Industrial Economics, revised 13 Feb 2023.

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    More about this item

    Keywords

    standard essential patents; FRAND; injunctions. hold-up; patent litigation;
    All these keywords.

    JEL classification:

    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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