Standards, FRAND and Competition Law

Standards are the technical specifications for a new product or process creating interoperability. Standards are protected by patents and technology that is “essential” to comply with a standard is called a Standard Essential Patent. Standard Setting Organizations involve competitors agreeing on certain specifications of the product they plan to market which relates to the competition issues as well as IPRs. Further SEP holders preventing the standard implementer from using the standardized technology can create a “hold-up” and dominate the licensing terms. To achieve the desired objectives SEP holder files may injunctive relief, which itself is seen by many regulators as an abuse of dominant power. However, from the standard implementer’s perspective, who seeks to take the defence of the commitment made by the SEP holder to licence the standard on Fair, Reasonable and Non-Discriminatory (FRAND) wholly depends upon domestic law concerning contracts or competition law. Thus, the enforceability of FRAND commitments is dependent upon the language of the Standard Setting Organisation’s (SSO) IPR Policies to which the SEP owner consents and applicable contract law principles are attracted.