To: waitwatchwander who wrote (57671 ) 12/12/2006 9:32:25 PM From: quartersawyer Read Replies (1) | Respond to Damien Geradin's paper -- FRAND and thoroughly good senseThe only material consequence of making a FRAND commitment is that the patent holder waives its right to refuse to engage in good faith negotiations to lic ense. FRAND commitments do not impose any form of price control on the licensor, nor an obligation to license on disadvantageous conditions. On the contrary, FRAND means that royalty rates should be determined through fair, bilateral negotiations in accordance with market conditions. [pp 4,5] ....moreover, such a proposed system would be both unfair and unreasonable. Companies with large patent portfolios would capture the greatest royalty earnings notwithstanding the actual value of their patents, even if those patents did not require nearly the same level of investment as the one made by other firms. Meanwhile, companies with perhaps a smaller number of more valuable patents would receive a smaller return. This would result in prices being unfair and unrelated to the true value of the patent. In the end, this rule would encourage an absurd proliferation of patents being contributed to a standard and declared as essential regardless of their innovative or commercial value. Each company participating in standard setting would have a strong incentive to maximize the number of patents that it files and contributes, rather than the quality of the innovation. [p 15] tilburguniversity.nl professorgeradin.blogs.com
