A trade-based approach to resolving escalating FRAND-based disputes in the digital age

Abstract

ICT-based standards can enable and enhance interoperability and compatibility and decrease transaction costs in the ICT-driven marketplace. World trade would not be prosperous today but for the rapid modern development of ICT-based industries across the globe. Nowadays, most technical standards in the ICT-based industries are covered by patents, and controversies over standard essential patents and FRAND licensing have been disrupting global ICT-based industries and corresponding trade flows. Current dispute settlement mechanisms for resolving ex-post FRAND-rate disputes generally fall into two categories: adjudication by national courts and certain types of arbitration. Yet they are neither adequate nor satisfactory. In the meantime, to a certain degree, it seems impracticable to count on the approach of patent policy clarifications by SDOs to clinch currently escalating FRAND-based disputes as well. In short, there presently seem to be no quick fixes. In contrast, international public governance may better serve the goal of progressively resolving costly FRAND-based disputes in the long run. Specifically in the context of world trade, a plurilateral SEP-related competition agreement might be relatively achievable. Meanwhile, in combination with and complementing other existing and proposed means, this agreement is likely to be an integral part of the multi-factor solution toolkit for resolving costly and disruptive FRAND-based disputes across the globe. For one thing, it could help alleviate the on-going escalating FRAND-based disputes per se; for another, such an initiative might instil new momentum into the multilateral trading system, which is struggling through a variety of institutional difficulties.