Top-down approach

The top-down approach is a method for determining a FRAND royalty rate by starting from a reasonable maximum aggregate royalty for all standard-essential patents covering a given standard — the aggregate royalty or total royalty burden — and then allocating to the relevant patent holder’s portfolio a proportionate share of that amount, based on its contribution to the standard, namely the ratio of its patents that are genuinely essential to the total number of standard-essential patents for that standard.