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.
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