A conceptual model for FRAND royalty setting
Bibliographic Data
| ID | 11286176 |
|---|---|
| Authors | Jens Leth Hougaard (0000-0002-2910-5741, University of Copenhagen, corresponding author), Chiu Yu Ko (0000-0001-8590-6159, Chinese University of Hong Kong), Xuyao Zhang (0000-0003-0341-5722, National University of Singapore) |
| Year | 2023 |
| Volume | 123 |
| Pages | 167-176 |
| Publication date | 2023-05-01 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Mathematical Social Sciences (JOURNAL) |
| Journal identifiers | ISSN: 0165-4896 • E-ISSN: 1879-3118 |
| Publisher | Elsevier BV (PUBLISHER) |
| DOI | 10.1016/j.mathsocsci.2023.03.005 |
| OpenAlex | W4362634350 |
| Language | EN |
| References cited | 26 |
Setting an industry-wide standard is crucial for the interoperability, compatibility, and efficiency of information and communication technologies. To minimize holdup problems, patent holders are often required to ex-ante commit to licensing their technologies under Fair, Reasonable, and Non-Discriminatory (FRAND) terms. Yet, there is little consensus, in both courtrooms and industries, on the exact meaning of FRAND. We propose a new framework that enables a precise distinction: fairness in the distribution of royalty payments among patent users, and reasonableness in setting the size of the compensation to the patent holder, where both the size and the distribution of payments are determined in a non-discriminatory way that ensures similar firms are treated similarly. • The paper presents a conceptual model for FRAND royalty setting. • The model builds on well-known properties from the theory of fair allocation. • A specific royalty rule is characterized by normatively appealing properties. • Royalties are determined relative to a firm specific liability index. • The model is applied in a few standard settings from Industrial Organization
Actuarial science · Business · Commit · Conceptual framework · Economics · Ex-ante · Industrial organization · Interoperability · Law and economics · Microeconomics · Payment · World Wide Web · Auction Theory and Applications · Computer Science · Digital Platforms and Economics · Intellectual Property and Patents · Finance
| Highly cited | No |
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