Understanding FRAND: A Guide to Fair Licensing

Some basic concepts in IP

FRAND stands for fair, reasonable, and non-discriminatory. It’s a licensing framework used for standard-essential patents (SEPs). These are a voluntary agreement between a patent owner and a standards development organization (SDO). 

Why is FRAND important?

  • Helps  to preserve competition and ensure fair licensing. 

  • Enables lower consumer prices by allowing for scalable manufacturing. 

  • Encourages innovation by compensating companies through patent royalties. 


How does FRAND work?

  • The SDO’s bylaws define the exact scope of the FRAND commitment. 

  • The SDO often requests these terms from the owner of an intellectual property right. 

  • Such terms are often used with technical standards developed through an open, consensus-based process. 


How is FRAND used?

These can help in-house counsel and private practice attorneys negotiate SEP licenses and resolve FRAND disputes.

In telecommunications, computers, software, Internet, and consumer electronics. 


Related Information

Thomson Reuters Practical Law: FRAND Framework

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