1 Introduction

Generally speaking, standards are adopted to reduce transaction costs for several implementers and increase interoperability among devices and platforms. Standards make our lives as consumers easier. For instance, a Wi-Fi-enabled smartphone device will connect to a Wi-Fi connection regardless of the jurisdiction. It has happened because Wi-Fi is a standard, which has been unanimously adopted by all stakeholders. There are technical standards adopted through several standard setting organizations, and there are standards adopted through market demand, which have evolved with time. Standard setting organizations (SSOs) play a crucial role in operationalizing a standard. The stages through which a standard is operationalized are often fraught with uncertainty, and a lot depends on the internal structure of an SSO. The most significant contributor to the entire process is the IPR policies adopted by each of these SSOs. This chapter provides a glimpse of these IPR policies of SSOs in three different jurisdictions, i.e., Europe, the United States, and India. These policies show their diverse nature and often lead to complex end-results.

2 Why Do We Need a Standard?

While there could be different ways of explaining the meaning assigned to ‘standard,’Footnote 1 there is no doubt that interoperability is the key to any standard’s success. The OECD’s standard definition points that “… interoperability standards designed to ensure that two or more related products or processes may fit and operate with each other.”Footnote 2

In the context of ICT, which is also the focus of this chapter and the book, the definition provided by the European Telecommunications Standards Institute (ETSI) report is apt. It suggests that “a standard defines requirements, specifications, guidelines or characteristics for a determined material, product, process or service.”Footnote 3 Further, they went on to identify the above requirements for the role of a standard setting body. The report suggests that “[formal] standards are developed by SDOs, which involve selected stakeholders in the item to be standardized, such as manufacturers, providers, consumers, and regulators, with possible contributions from academics and professional users.”Footnote 4 According to this definition, the working of a standard setting body should have a deliberative structure. According to the report, such an adopted structure would ensure a fair and transparent process, aiming to build a certain consensus among various stakeholders.Footnote 5

Standards are mainly laid down by using de jure (formal) and de facto mechanisms.Footnote 6 De facto standards are established through a process of choice exercised by consumers. It involves a competitive process where consumers decide their preference over existing standards.Footnote 7 This standard-making process generally develops through uncoordinated efforts contrary to a consensual standard adopted by various stakeholders in the case of de jure or a formal standard. De facto standard results from a unilateral adoption of a technology by a market for multiple reasons.Footnote 8 It may result in a unilateral adoption of technology by the market,Footnote 9 leading to a de facto monopoly.Footnote 10

De jure standard setting process can happen either through government intervention or through a consensual standard setting mandate undertaken by a standard setting body.Footnote 11 Standard developed at a standard setting body evolves through a set procedure of rules to instill fairness in the entire process.Footnote 12

The option of interoperability between different devices is materialized through the adoption of standards. As a result of standards, companies are incentivized to manufacture products that are compatible with each other. The manufacturing cost is reduced considerably due to the lessened cost of acquiring technical information and enabling efficient product design.Footnote 13 Therefore, standards would help producers improve the innovation ecosystem by promoting the interoperability of products, services, and processes.Footnote 14 Standards help reduce product development time, develop the quality of a product, and help producers trade in open crossborder markets.Footnote 15 Companies producing products based on standards allow them to work efficiently, leading to greater consumer satisfaction.Footnote 16 The interoperability achieved through the adoption of a standard product protects consumers and helps increase positive network effects.Footnote 17 It means standards would entail that a product is widely used, thereby raising demands and usefulness among its users.Footnote 18

On the other hand, as a downside, standards, especially technology standards, can also affect further innovation.Footnote 19 It has been suggested that it is difficult to change or evolve where there exists an obligation to follow an existing standard.Footnote 20 Further, the steps followed during the adoption of a new standard are quite complex.Footnote 21

3 Standard Setting Organizations

The number of technical specifications and their development process would decide the composition and functioning of an SSO. Therefore, it is challenging to ascertain a uniform definition; however, SSOs are “… primarily engaged in activities such as develo**, coordinating, promulgating, revising, amending, reissuing, interpreting, or otherwise maintaining hundreds of thousands of standards applicable to a wide base of users outside the standards develo** organization”.Footnote 22 One can only describe an SSO based on the role it adopts in develo** a technology standard. Over the years, many have tried describing SSOs as certification agents, as places where technology bargaining happens, thereby facilitating consensual licensing, and places that provide an opportunity for joint R&D.Footnote 23 Broadly, they provide a platform where different stakeholders can provide their inputs while formalizing and operationalizing a particular standard or standards.

A report published for the European Commission in 2014 has categorized standard bodies into three categories: (i) formally recognized, (ii) quasi-formal, and (iii) privately organized consortia. The first category includes those SSOs recognized by regulatory organizations and are further sub-divided territorially as global, regional, and national. Examples are the International Organization for Standardization (ISO) and the European Telecommunications Standards Institute (ETSI). Those coming under the ‘quasi-formal’ group without having an outright formal recognition have received comparable recognition due to donning some of the characteristics of formally recognized standard bodies. Examples are the Institute of Electrical and Electronics Engineers (IEEE) Standards Association and the Internet Engineering Task Force (IETF). Smaller, private consortia would come under the third category.Footnote 24

Individuals representing firms active in a relevant technology often play a leading role in develo** a standard in a standard setting body.Footnote 25 There is also the involvement of academics and participants representing different governments and other interested parties.Footnote 26 The role played by all participants in SSOs is voluntary, including their subsequent compliance with an adopted technology standard.Footnote 27 Membership forms for two of the three SSOs considered in this chapter have been shared in the annexure.Footnote 28

There is no consistency in how existing literature has used SSO and a Standard Development Organization (SDO).Footnote 29 It has been suggested that the two terms differ “from an economics and resource allocation perspective” because “setting standards” and “develo** standards” are inherently different.Footnote 30 Arguably, the word ““standard setting” is used for activities at the lower end of the spectrum, and “standard development” is used for activities at the higher end of the spectrum.”Footnote 31 SSO is a broad umbrella term encompassing multilateral organizations that facilitate standard setting processes such as Special Interest Groups (SIGs), SDOs, consortia, and other entities.Footnote 32 For this book, we are going to use SSO. Due to the different nature of the group that forms an SSO, SSOs cannot have a unique internal structure. Therefore, their legal liability would be different as well.Footnote 33 IEEE is instituted under the New York Not-For-Profit Corporation Law, whereas ETSI has been incorporated under the French Law.Footnote 34 TSDSI, on the other hand, is a not-for-profit autonomous organization under the Indian Societies Registration Act.Footnote 35

4 Importance of SSOs in Setting Essential Patents

SSOs play a leading role in develo** technology standards. With different participants, the internal process structures are different for different SSOs, although there is a broad range of similarities irrespective of the size of an SSO. While there are multiple advantages, there are often questions connected to the adverse outcomes of a standard setting process.

4.1 Standard Setting Process in SSOs

SSO members accept a particular standard by following an elaborate process. The work starts with the deliberation of a group of experts concerning a proposed standard within an SSO.Footnote 36 The internal rules of an SSO will govern the exact nature of the process to be followed while creating the standard.Footnote 37 As a general rule, an SSO creates rules for stakeholders about the process of standard setting, voting on standardization decisions, and making technological contributions.Footnote 38 The rules concern questions about:

  • Those who are eligible to vote and provide input on new or revised standards

  • Development of standard and the formal steps to be followed

  • Release of information about essential IPs

  • Required consensus for fixing a standard.Footnote 39

SSOs generally have an overarching technology theme and work on issues connected to that theme.Footnote 40 The participants of an SSO, including but not limited to firms, universities, government, individuals, and public interest groupsFootnote 41 at the initial stage, can submit technical proposals relating to the standards that are being developed. Once submitted, various working groups review these technical proposals.Footnote 42 There are multiple working groups comprised of engineers and other technical experts in an SSO that focus on particular technical issues connected to the theme.Footnote 43 It is up to these working groups to determine the best technologies available to implement the relevant standard. The entire process is lengthy and involves a series of collaborative and iterative discussions, and they may accept, reject, and even seek changes to the submitted technology proposals.Footnote 44 The merits and demerits of the recommendations are discussed over several meetings organized by the working groups. To reach a consensus, they conduct several meetings among attendees to discuss the merits and demerits of the proposed technology related to a particular standard.Footnote 45

With different standard setting processes at different SSOs, there is a broad framework that any SSO is likely to follow. Figure 1 is an illustration of the overall framework suggested in the ETSI report published in 2018.

Fig. 1
A diagram consists of four parts. Left to right: Inception, Identifying needs; Conception, defining the scope and laying down of a plan; Drafting, elaborating new or revised standards; and Approval, official issue or revised standards.

Standard setting processFootnote

Dr habil Nizar Abdelkaf and others, Understanding ICT Standardization: Principles and Practice (ETSI 2018) 32 <www.etsi.org/images/files/Education/Understanding_ICT_Standardization_LoResWeb_20190524.pdf> accessed 1 January 2021.

Full size image

At the stage of inception, the idea of identifying the need for a new standard begins. It is followed by initiating the process of standardization. A detailed plan is laid out before an SSO conceptualizes beyond the technical proposal. It includes planning the organization’s time schedule, setting the target outcomes, and deciding how relevant resources are directed toward implementing the plan.Footnote 47 During the drafting phase, the technical and editorial work is carried out according to the internal rules that create a mature and stable document before it is released officially.Footnote 48 The last phase is the approval phase wherein consensus is sought. If the approval process’s outcome is negative, the document may return to the drafting phase.Footnote 49 Once the standard is agreed upon and the consensus is reached among the participants, there are further licensing issues. The issues of licensing are an integral part of the IPR policies of SSOs.

4.2 Advantages and Risk of Standard Setting by SSOs

Various participants of an SSO stand to benefit from the process of standard setting and the position of having a standard in place. It depends on the role that they would play in an SSO.Footnote 50 With the available opportunity to submit technical proposals toward the standard setting, participants can actively develop a standard. Therefore, depending on their contribution, participants can lead the process of standard setting.Footnote 51 A contributor to the technology will benefit from licensing once a patent becomes part of that technology, i.e., an essential patent in a standard essential patent. A participant looking to use the standard and, therefore, the technology can incorporate it in the developed product at an early stage.Footnote 52 It reduces future hassle for the implementer and, thus, the cost.

Furthermore, it is always tricky to engage in develo** a new standard independently.Footnote 53 The process of standardization entails horizontal competition since participants can freely compete to incorporate their technology into a particular standard.Footnote 54 It encourages participants to innovate and market their products to the consumers at a competitive rate. Consumers can shift from one product to another, complying with the same adopted standard. It gives freedom in terms of the price of a product and choice of product.Footnote 55 The development of a standard at an SSO has additional advantages over market determined standards. It avoids possible complications while adopting an already developed standard. Further, it may defeat the purpose of interoperability and interconnectivity, which you would expect from a technology standard.Footnote 56

Standardization at SSOs also brings about several challenges. In the last several decades, their IPR policies have increasingly played a crucial role in private litigation and have attracted scrutiny from policymakers and regulators.Footnote 57 The contradictions are between innovators on the one hand and implementers on the other. Innovators would seek to maximize their investment toward develo** a technology standard. Implementers would like to use such technology in the accepted standard on reasonable terms.Footnote 58

Patent hold-up and Patent hold-out are two different situations that have been debated intensely. As the name suggests, hold-up arguably happens because the innovator’s control over the use of essential patents in a technology ties up further implementers.Footnote 59 The fear is that innovators would charge exorbitant royalty and not necessarily FRAND (Fair, Reasonable, and Non-Discriminatory) terms as agreed upon under SSO IPR policies.Footnote 60 Literature suggests that there is no empirical evidence suggesting the existence of hold-up.Footnote 61 Hold-out represents a possibility where an innovator is deprived of royalty by an implementer. In this situation, implementers can adopt delaying tactics after an innovator has incurred costs over the invention.Footnote 62 The obligation is not only on the SEP holder but equally on the implementer. There are other concerns like royalty stacking and patent ambush. Royalty stacking is when an implementer must pay royalties to more than one patent holder due to the use of multiple essential patents in a standard. It may lead to increasing the cost of the end product.Footnote 63 Again, the absence of empirical evidence has been cited against the idea of patent ambush.Footnote 64

Participants playing a leading role in develo** a technology standard will play an equally important role in disclosing their essential patents used in such a standard and subsequent licensing to implementers. The disclosure and licensing process are facilitated by IPR policies of different SSOs, leading to the successful implementation of the standards. These policies will be discussed in much greater detail in the subsequent sections. Participants of SSOs, wherever applicable, voluntarily pledge patents that are considered essential to the development of a standard. Further, they agree to work according to the IPR policies of the SSOs.Footnote 65

4.3 IPR Policies of SSOs: Understanding Disclosure and Licensing of Essential Patents

The SSO IPR policies are drafted to address the concern of the technology provider and the concern of the implementer who would rely on such a technology. However, it is not an easy process to reconcile between those who rightfully expect to commercialize their essential patents incorporated in a standard with those ho** to use those essential patents lawfully.Footnote 66 Therefore, SSO IPR policies are situated at the cusp of rival interests.Footnote 67 While most SSOs have adopted a comprehensive set of internal rules adhered to by all participants, the rules about disclosure of essential patents and licensing of those patents have attracted considerable debate.Footnote 68 They are also the two most important obligations that SSOs impose on the patent holders.Footnote 69

Over time the IPR policies at SSOs do change, at times yearly amendments and adaptations take place.Footnote 70 However, unlike today, the initial SSO policies were not thought out documents, and they had to undergo significant revisions.Footnote 71 At times, changes happened as a subsequent event to prominent litigations.Footnote 72 Surveys point out that only some of the changes out of the many would be considered substantial.Footnote 73 For instance, the decision in Rambus arguably led to the tightening of the patent disclosure policies.Footnote 74 For the purpose of the chapter, we have considered the SSO IPR policies of ETSI, IEEE, and TSDI with a particular reference to disclosure and subsequent licensing of essential patents.

To begin with, it is essential to understand the concept of essential patents. The concept of essentiality has been approached in two different ways—when there are no technological alternatives and instances where there may be alternatives, but they are too expensive, leading to commercial essentiality.Footnote 75 Broadly, “… essentiality is defined with respect to patents necessary for implementing the final standard.”Footnote 76 While the development process can consider many patents as essential, only “ultimately necessary” patents will be considered for licensing.Footnote 77 Following essentiality, SSOs expect members who contribute to the development of a standard to disclose essential patents and license those patents in a FRAND manner.Footnote 78

5 Disclosure and Licensing of Essential Patents

Disclosure, a compliance process in nature, ensures that the information about essential patents is reasonably known to those technology users. The scope and understanding of disclosure are broad, with the following questions:

Whose patents must be disclosed; what qualifies as an “essential” patent or patent claim; when disclosures must be made in the standards development process; whether blanket (non-patent specific) disclosures suffice; to whom the disclosed information is provided; and whether there is a requirement to update disclosures, for example, as a standard evolves and as patents are issued or denied.Footnote 79

The disclosure process ensures transparency, and members adopting a standard with essential patents are informed beforehand about their various commercial liabilities.Footnote 80 In the words of the European Commission, transparency entails, “… the relevant standard-setting organisation would need to have procedures which allow stakeholders to effectively inform themselves of upcoming, on-going and finalised standardisation work in good time at each stage of the development of the standard.”Footnote 81 There is a general consensus about prior disclosures for future patent claims concerning a standard so that participants are informed at the time of voting on a technical specification.Footnote 82 The disclosure requirement helps implementers willing to license SEPs on FRAND terms. It also reduces claims about deceptive conduct and ‘patent ambush.’Footnote 83 SSO policies suggest patent disclosures in different ways.Footnote 84 The processes of disclosing essential patents and the timing, knowledge, level of detail, and definition of essentiality and updating each one varies greatly. While there is a requirement of disclosure, there is no uniformity across SSOs as to the extent and time of such disclosure of essential patents.Footnote 85 An example of an IPR disclosure form relevant to a proposed standard has been shared in the annexure.Footnote 86

Discovering essentiality during the development of the standard is an arduous task for those with multiple patent portfolios. There is no ideal time for declaring essentiality, and further, those likely to have multiple essential patents may not want to entail a cost-intensive patent search to identify such patents.Footnote 87 SSOs do not require patent holders to carry out patent searches mandatorily.Footnote 88 The difficulty is limited to cost and the fact that it is challenging to predict essentiality at the stage of development, especially at an early stage.Footnote 89 Similarly, disclosing late when the standard has matured may come as a surprise for the SSO members.Footnote 90 The overall effect could be possible overdisclosure and underdisclosure from the side of the patent holder. There could be a situation where there is a general declaration by a technology holder and instances where specific patents are declared.Footnote 91 These sorts of declarations are known as generic or blanket disclosures.Footnote 92 While these are existing rationales for different kinds of disclosures provided by the essential patent holders, there is an additional fear that any specific declaration of an essential patent may attract antitrust claims. A specific declaration may lead others to believe that there are no further essential patents from the patent owner. A late realization on a patent owner’s part about a missing essential patent, even though inadvertently, can make the patent owner vulnerable.Footnote 93 While specific disclosure has certain disadvantages, a patent owner may still want to opt for it when a patent is undoubtedly valuable for the standard’s purpose.Footnote 94 On the other hand, a declaration of too many patents as essential for a standard may be construed as an impediment to the standard setting process.Footnote 95 In the end, disclosure could end the uncertainty that users of technology may have and help inventors collect their licensing fees.Footnote 96

Licensing rules entail that an essential patent holder commit to give away the technology through licensing to downstream implementers who would use such technology for manufacturing products. The SSO IPR policies are geared toward ensuring that all SEP licenses are made further available to all those who would require the technology. SSOs have adopted mechanisms like Licensing Statements, Undertakings, Letters of Assurance, and Declarations of Licensing Position to shape this vision.Footnote 97 FRAND is an optimal licensing commitment, which reflects in SSOs policy documents. Following the FRAND, an owner of essential patents in a standard promises to enter into good faith negotiations and extend a license to an implementer in a downstream market. FRAND, in the last decade or so, has been the reason for most litigations. Beyond mentioning FRAND in their IPR policies, SSOs have left the meaning to be ascertained through bilateral negotiations of parties involved or through judgements of Courts in different jurisdictions.Footnote 98 FRAND draws the patent holder and implementer closer to a system that may not always have started on equal footing. It should help both parties involved in a FRAND transaction, but the efficacy of FRAND will only be determined by enforceability.Footnote 99

SSOs majorly started to frame their policies in the 1990s; however, SSOs’ more proactive behavior has been noticed with the emergence of 2G mobile telecommunication standard and upon the insistence of Competition Authorities in Europe.Footnote 100 The Communication of 1992, published by the European Commission on Intellectual Property Rights and StandardizationFootnote 101: “sets out a number of [general] principlesFootnote 102 which it believes should form the basis of any internal rules which standards bodies may wish to elaborate.”Footnote 103 Some of the principles that reflect in SSO IPR policies ensure that

… standards are available for use on fair, reasonable and non-discriminatory terms, regardless of whether the users participate in the work of the standard-making body or not, but taking into account the circumstances of the use; [and] fair conditions are provided to the holders of intellectual property rights, especially concerning the time limits for identifying IPRs and agreeing to their use, and in respect of arbitration mechanisms as to royalty rates.Footnote 104

The essential patent holders should “… use best efforts to identify in a timely manner any IPR which they hold which is relevant to a standard which is being developed and to confirm or refuse permission for its incorporation in that standard promptly; [and] offer fair, reasonable and non-discriminatory monetary or non-monetary terms for the licence[e] to use any IPR.”Footnote 105 The disclosure and licensing provisions of the three SSOs—IEEE, ETSI, and TSDSI—have been discussed.

5.1 Disclosure and Licensing Requirements ETSI

The IPR Policy of ETSI has seen several changes over the years following the norm that SSOs had to undergo in their policies. These changes have happened due to concerns related to a possible holding-up situation that arguably essential patent owners may indulge in and antitrust concerns raised by the European Commission at different times.Footnote 106 For instance, one of the policy changes required the essential patent holders to offer FRAND licenses to members regarding current and future ETSI standards. It was not extended to non-members not part of ETSI, leading to an investigation by the EC.Footnote 107 There have been concerns about the disclosure obligations under the existing policy leading to a further investigation in 2005 by the Commission, which again was addressed by a policy change.Footnote 108

Likewise, in 2007, a shift from an ex ante licensing Disclosure was adopted in 2006 to a voluntary licensing ex ante disclosure. Upon the Commission’s intervention, the policy that suggested splitting of royalty patents in advance among patent holders in a proportional manner was dropped.Footnote 109

The present IPR policy on Disclosure of IPRs put the onus on members to

… use its reasonable endeavours, in particular during the development of a [standard] or [technical specification] where it participates, to inform ETSI of [essential] IPRs in a timely [manner]. In particular, a [member] submitting a technical proposal for a [standard] or [technical specification] shall, on a bona fide basis, draw the attention of ETSI to any of that [member’s] IPR which might be [essential] if that proposal is adopted.Footnote 110

There is, however, no “… obligation on MEMBERS to conduct IPR searches.”Footnote 111

The disclosure policy adopted by ETSI requires its members to fulfil four conditions. There is a component of good faith on the patent holder’s part since the policy expects the patent holder to use ‘reasonable endeavours’ and engage in ‘bonafide’ transactions without any intention to deceive the other party. Lord Mansfield in Carter v Boehm said, “good faith forbids either party by concealing what he privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary.”Footnote 112 A member promptly must inform ETSI about an essential IPR in a standard. The onus is higher when a member submits a technical proposal toward develo** the standard and sharing the information about a patent that may be deemed essential upon the acceptance of a standard. While there are reasonable expectations for members to disclose, they are not expected to carry out patent searches to understand a particular standard’s essentiality.

Following the disclosure policy, ETSI has drawn up its policy for licensing commitments regarding essential patents.Footnote 113 After identifying the essential IPR about a particular standard or a technical specification, “… the Director-General of ETSI shall immediately request the owner to give within three months an irrevocable undertaking in writing that it is prepared to grant irrevocable licences on fair, reasonable and non-discriminatory (“FRAND”) terms and conditions under such IPR.”Footnote 114 FRAND, as expected, has not been elaborated upon and resulted in many private litigations. Some of these cases have been talked about in the third chapter.

5.2 Disclosure and Licensing Requirement of TSDSI

The disclosure requirement of TSDSI is quite similar to the requirement drawn under the ETSI policy. Clause 3 of the IPR policy requires its members to make reasonable endeavors to share timely information about essential patents. There is no obligation on the members to carry out an extensive search for essential patents as long as they enter transactions in good faith and in a bonafide manner.Footnote 115 “With respect to [affiliates], the [members] may provide Uniform Resource Locators (URL or link), pointing to the disclosures made by such [affiliates] to any other standards body.”Footnote 116

The comparable licensing standard commitments of the TSDI standard are similar to the ETSI standard. When an essential patent is identified, the TSDSI shall notify the patent owner to give an irrevocable undertaking within three months. The broad objective is to ask for a FRAND commitment from a patent holder.

5.3 Disclosure and Licensing Requirement IEEE

The IEEE IPR policy has seen significant changes in a little over two decades. In terms of the FRAND rate, IEEE, before 1995, wanted the essential patent holder to make the technology available at a nominal competitive cost.Footnote 117 2015 saw significant policy amendments regarding licensing commitments and limiting the scope of injunctive relief to patent holders against willing licensees.Footnote 118 There was an attempt to qualify FRAND and the suggested royalty rate for licensing of essential patents.Footnote 119 Further, an amendment sought to waive the right of seeking an injunction for an essential patent against an implementer. The essential patent holder can lay a claim of injunction only after a successful claim of infringement against the unlicensed implementer in the Court of Appeals.Footnote 120

Unlike the ETSI and TSDI, IEEE uses a single form of assuranceFootnote 121 [Disclosure for other SSOs] and FRAND commitment.Footnote 122 A letter of assurance [LOA] has to be provided by a submitter [essential patent holder]Footnote 123 within a reasonable time and no later than the approval of a Project Authorization Request [PAR] in the standard development process.Footnote 124 In a situation where “[an] asserted potential Essential Patent Claim for which licensing assurance cannot be obtained (e.g., an LOA is not provided or the LOA indicates that licensing assurance is not being provided) [the matter] shall be referred to the Patent Committee.”Footnote 125 In case a submitter becomes aware of the essential patent not mentioned in the LOA “then such Submitter shall submit a Letter of Assurance stating its position regarding enforcement or licensing of such Patent Claims.”Footnote 126 However, there is no obligation on the patent holder to carry out an essential patent search.Footnote 127

The FRAND licensing commitment encourages a submitter to “make available a license for Essential Patent Claims to an unrestricted number of applicants on a worldwide basis without compensation or under Reasonable Rates, with other reasonable terms and conditions that are demonstrably free of any unfair discrimination ….”Footnote 128 The IPR policy raises the question of prohibitive order against the use of essential patents after the FRAND commitment. Here, the essential patent holder is not encouraged to invoke an injunctive order unless “… the implementer fails to participate in, or to comply with the outcome of, an adjudication, including an affirming first-level appellate review.”

Clause D of the form requires the Submitter to disclose any patent that has the potential to become an essential patent.Footnote 129 The form covers the issue of reasonable rate, and it means “… appropriate compensation to the patent holder for the practice of an Essential Patent Claim excluding the value, if any, resulting from the inclusion of that Essential Patent Claim’s technology in the IEEE Standard.”Footnote 130

6 FRAND Commitment and Injunction

The mention of FRAND raises a question about a patent holder’s right to seek an injunction on the same patent, which has been declared essential. With no definite indication of what FRAND construes under the SSO IPR policy, the issue of a reasonable licensing rate will be contentious. There is a scholarly divide on whether a patent holder waives the right after committing FRAND rates following the SSO IPR policy.Footnote 131 Nonetheless, the parties are obligated to good faith negotiation when going over terms of licensing of essential patents in a standard.Footnote 132 The outcome may well decide the fate of possible injunctive relief against an implementer or a possible violation of the antitrust law against an essential patent holder.Footnote 133

IEEE IPR policy, amended in 2015, excluded a SEP holder through a ‘prohibitive order’ from seeking an injunctive relief except otherwise under exceptional circumstances.Footnote 134 Contrary to the IEEE, the IPR policy of ETSI does not say anything specific about injunctive relief.Footnote 135

SSOs have a rather challenging task at hand, balancing the need for an innovator and subsequent use of proprietary technology. They can reduce information asymmetry and uncertainty, which is possible in an SSO where participants come from different backgrounds. Not all may have the necessary technical expertise to understand the entire standard setting process and licensing issues. On top of that, there are additional complications with non-members who may not have participated in the standard setting process. Therefore, it raises additional responsibility on SSOs to take transparency as the fulcrum of their internal operations. While there is an overall uniformity, at least in the examples that we have considered in this chapter, ascertaining FRAND commitment remains a thorny issue. The recourse so far has been court judgements, which will be covered in the next chapter.