Empirical Analysis of License Policy for Declared Standard Essential Patents in Standard Setting

Abstract

Standard-setting organizations (SSOs) generally request their participants to commit to offering licenses ex ante to implementers on fair, reasonable, and non-discriminatory (FRAND or RAND) terms. To adjust for the RAND context, court judges adopt modified Georgia- Pacific rules to determine patent damages ex post in infringement lawsuits involving standard essential patents (SEPs). In this paper, we review the literature on intellectual property rights policy in SSOs and modified Georgia-Pacific rules from court practices and, accordingly from technical and legal aspects, explore the determinants of licensing terms in the RAND context. By employing a novel dataset that consists of over a thousand declared SEPs in the Internet Engineering Task Force (IETF), we find that, in general, technical and legal characteristics are significantly associated with reciprocal licensing terms, despite that most of their associations with royalty-free (or royalty-bearing) terms are nonetheless trivial.