What is FRAND licensing?
FRAND (Fair, Reasonable, and Non-Discriminatory) is the licensing commitment that holders of Standard Essential Patents (SEPs) make to standards-setting organisations (SSOs) such as ETSI, IEEE, ITU, 3GPP. By contributing patented technology to a technical standard (4G, 5G, Wi-Fi, HEVC, USB-C), patent holders agree to license those patents to any implementer on FRAND terms. FRAND is the cornerstone bargain that enables interoperable standards: implementers can build products knowing they have a right to license; patent holders earn royalties on broad standard adoption.
FRAND elements
- Fair: licensing process must be transparent and good faith; refusing to negotiate or imposing predatory terms violates FRAND.
- Reasonable: royalty rate must reflect the actual incremental contribution of the SEP to the standard, not gain leverage from standardisation itself.
- Non-Discriminatory: similar licensees offered similar terms; refusing to license competitors or charging substantially different rates for similar use cases violates ND.
FRAND litigation landscape
- EU CJEU Huawei v. ZTE (2015): established framework for FRAND defence in injunction cases — implementer must show willingness to take a licence; SEP holder must make FRAND offer in good faith.
- US Federal Circuit (Microsoft v. Motorola, Ericsson v. D-Link): FRAND rate determination methodology; small computable contribution approach.
- UK High Court (Unwired Planet v. Huawei): global FRAND licensing framework; permits global portfolio licensing under English law.
- Top-down vs. comparable licences methodology: competing frameworks for FRAND rate calculation.
FRAND in practice
FRAND commitments turn standard-essential patents into regulated property: the holder promised the standards body to license on fair, reasonable and non-discriminatory terms, and courts worldwide have built a negotiation choreography around that promise — willing-licensee conduct, offers and counter-offers, and injunction availability hanging on who behaved reasonably. For implementers (any company shipping connectivity: IoT devices, automotive, electronics), the practical program is an SEP exposure map per standard, response protocols for assertion letters (silence reads as unwillingness), and comparable-licence benchmarking when rates are negotiated. Turkish manufacturers exporting connected products meet FRAND through EU and US assertion practice rather than domestic case law — which makes contractual indemnities from component suppliers, who often carry the licences, a first-order procurement term.