Page 18 - A&A Patents&Design Rewind-2016
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global trends. each SEP can vary considerably depending on
various factors. There are market related issues
c) Whether there is a need for prescribing that have to be taken into account apart from
guidelines on working and operation of the licensing scenario, which may differ from
Standard Setting Organizations by Government country to country. Therefore, determining
of India? If so, what all areas of working of SSOs corresponding royalties and the associated
should they cover? FRAND terms are quite complicated and such
determination is a subjective issue. Having a
AA Proposition: The primary purpose of SSOs blanket set of rules suitable for all domains
is to ensure a transparent process in the is therefore, not feasible. Even in the current
development of technical standards. Thus, scenario, there is no consensus globally
Indian SSOs should ensure that the process by regarding these issues.
which the standard is developed, debated and
adopted is transparent, recorded and fair to all e) On what basis should the royalty rates in SEPs
participants in the SSO. With respect to any be decided? Should it be based on Smallest
IPR that is impacted by the standard, the SSO Saleable Patent Practicing Component (SSPPC),
should ensure that members are incentivized or on the net price of the Downstream
to be transparent about their IPR that relates Product, or some other criterion?
to the standards. That is, to the extent an
SSO member has IPR that covers the technical AA proposition: What needs to be understood
standard and wishes to license that IPR for is that SSOs often require their members
anything less than a royalty free license, that to grant SEPs on FRAND terms while anti-
member should engage in utmost diligence to competitive law prohibits operators with a
ensure that the IPR is declared to the relevant dominant market position from selling goods
SSO in a timely manner. It should be taken at unfairly high prices. Both the regulations set
into consideration that what an IPR covers can by SSOs and the Anti-monopoly Law relate to
change dramatically during patent prosecution the final license fee, rather than the calculation
and what is encompassed by the standard thereof. Therefore, a careful study of how the
can change significantly prior to the standard final license fee is determined needs to be done.
being fixed. Overall, the Government should The final license fee is a composite of the rate,
regulate with a light hand as standards are the length of time over which it applies, the
designed to be international and collaborative unit base of its calculation, the ‘remaining life’
and the more intervention there is, the less of the licensed right (for instance, the balance
likely the standard will be effective. life of a patent), supportive assistance and
other contractual obligations. Other license
d) Whether there is a need for prescribing metrics, such as exclusionary rights modify
guidelines on setting or fixing the royalties the rate. This final licensee fee should be on
in respect of Standard Essential Patents and FRAND terms.
defining FRAND terms by Government of
India? If not, which would be the appropriate f) Whether total payment of royalty in case of
authority to issue the guidelines and what various SEPs used in one product should be
could be the possible FRAND terms? capped? If so, then should this limit be fixed by
Government of India or some other statutory
AA proposition: In a set of technical standards, body or left to be decided among the parties?
there are multiple patents which are essential
to the standards. However the importance of AA proposition: Though this is a subjective
18 | Patents & Design
