Frand License

The FRAND license (“Fair, Reasonable And Non Discriminatory”) constitutes an intellectual property contract that must be offered by the holder of a patent essential for implementing a technological standard  (or Standard-essential Patent, also known as SEP) declared as such to a standardization organization. By registering their technology as essential, patent holders commit to making it accessible through the conclusion of “fair and non-discriminatory” licensing agreements with economic operators who request them.

When a company holds patents essential for implementing a technological standard, it may be required to license them to third parties in accordance with FRAND principles. These principles aim to ensure that patents are not used abusively to limit competition or gain an unfair advantage over competitors.

A FRAND license must be fair, reasonable, and non-discriminatory. This means that the terms of the license should be objective, transparent, and applied in a non-discriminatory manner to all applicants. The patent holder must also grant a license at a reasonable price that is proportionate to the economic value the technology brings to the user.

FRAND licenses are common in industries that adopt technical standards, such as telecommunications and computing. Companies that adhere to FRAND principles can access essential patents to implement technological standards, which can promote innovation and competition in these sectors.

Although FRAND licenses aim to ensure fair competition and promote innovation, there are several issues and controversies associated with their use. Here are some of the problems posed by FRAND licenses:

1. Definition of "reasonable": It can be challenging to determine what is "reasonable" regarding FRAND licensing fees because there are no clear and uniform criteria for establishing the price of a license. Patent holders may have differing opinions on the value of their patents and the licensing terms, which can lead to legal disputes.
2. Questions about essentiality: The declaration of a patent's essentiality to a standard with an organization is unilateral and not subject to verification by the organization, which can lead to unjustified declarations.
3. Patentability Issues: Patents that are essential to a technological standard must be of high quality to avoid conflicts over their validity. This can be challenging to ensure because FRAND standards apply to many emerging technologies that may be subject to patentability questions.
4. Workaround Strategies: Companies may attempt to circumvent essential patents by developing alternative technologies that do not rely on these patents. This can undermine innovation and the adoption of technological standards.
5. Non-respect des principes FRAND : il existe des préoccupations quant au non-respect des principes FRAND par certaines entreprises titulaires de brevets, notamment en termes de transparence et d’application non discriminatoire des conditions de licence.
6. Coûts élevés : Les coûts de mise en œuvre de technologies brevetées peuvent être élevés, ce qui peut entraîner des coûts supplémentaires pour les utilisateurs finaux, en particulier dans les domaines de la technologie et des télécommunications.
7. Complexité des accords de licence : les accords de licence peuvent être complexes et difficiles à négocier, en particulier lorsqu’il y a plusieurs titulaires de brevets impliqués. Cela peut ralentir l’adoption des normes technologiques et entraver l’innovation.
8. Legal costs: Legal disputes over FRAND licenses can be costly and protracted, which can discourage companies from adopting technological standards.

Several solutions are being considered to address the issues related to FRAND licenses: :

1. Transparence : une plus grande transparence dans les processus de négociation et de gestion des licences FRAND peut aider à réduire les coûts juridiques et à améliorer la confiance entre les titulaires de brevets et les utilisateurs finaux.
2. Standardization: Further standardization of patent evaluation methods and license fees can facilitate negotiations and reduce conflicts.
3. Arbitration: Resorting to independent arbitration or mediation to settle FRAND licensing disputes can facilitate faster resolution and reduce litigation costs.
4. Adherence to FRAND principles: it is important that patent-holding companies respect FRAND principles and apply fair, reasonable and non-discriminatory licensing conditions.
5. Revision of laws and regulations: governments can revise patent laws and regulations to facilitate the resolution of FRAND licensing disputes and promote fair competition.
6. Collaboration : companies can work together to reduce costs and facilitate the adoption of technological standards.

Ultimately, effective resolution of FRAND licensing issues will depend on collaboration and commitment from all parties involved, including patent holders, end users, governments and standardization bodies.

There have been several global disputes relating to FRAND licenses in recent years. Here are some of the main ones:

1. Apple vs. Qualcomm.This is one of the most famous disputes. In 2017, Qualcomm accused Apple of not respecting the FRAND licensing conditions for patents on mobile communication technologies. Apple retaliated by accusing Qualcomm of excessive patent fees and violating antitrust laws. The two companies finally reached an agreement in 2019.
2. Huawei vs. InterDigital.In 2013, Huawei accused InterDigital of not respecting FRAND principles for patents on mobile phone technology. The conflict was finally resolved by a licensing agreement between the two parties.
3. Samsung vs. Ericsson.In 2012, Samsung accused Ericsson of violating FRAND principles for patents on mobile communication technology. The two companies finally reached a licensing agreement in 2014.
4. Nokia vs Apple.In 2011, Nokia accused Apple of not respecting FRAND principles for patents on mobile phone technology. The two companies finally reached a licensing agreement in 2017.
5. FTC vs Qualcomm.In 2017, the US Federal Trade Commission (FTC) accused Qualcomm of excessive pricing for its patents on mobile communication technologies and of violating antitrust laws. Qualcomm countered by claiming that the FTC had misinterpreted the FRAND principles. The dispute was resolved in 2019 when Qualcomm agreed to change some of its business practices.
6. Unwired Planet vs Huawei.In 2017, Unwired Planet accused Huawei of not respecting FRAND principles for patents on mobile communication technologies. The conflict was finally resolved by a licensing agreement between the two parties.

These disputes show that FRAND licensing and patent issues are complex and can lead to protracted legal disputes. It is important that the parties involved work together to find fair and reasonable solutions for the use of patents within the framework of technological standards.

In FRAND licensing disputes, a lawyer can play several roles, including: :

1. Advice: the lawyer can advise his client on the legal aspects of the FRAND license, including FRAND principles and applicable legal provisions.
2. Negotiation: the lawyer can help negotiate the terms of the FRAND license with the other party. He can also help develop negotiation strategies and evaluate offers made by the other party.
3. Defense: if the dispute proceeds to court, the attorney can defend the interests of his client in court and before regulatory authorities.
4. Patent expert: the attorney can help assess the validity of the patents in question and whether the proposed tariffs are FRAND compliant.
5. Mediation: if the parties are willing to resolve the dispute out of court, the attorney can act as a mediator to facilitate negotiations.

Overall, the role of a lawyer in FRAND licensing litigation is to assist their client through all stages of the process, from initial negotiations to final resolution of the dispute. An experienced lawyer can help their client navigate a complex area and reach a solution that is fair and equitable for all parties involved.