SYNERGISATION OF STANDARD ESSENTIAL PATENTS WITH ANTI

TRUST/COMPETITION LAW REGIME IN THE LIGHT OF FRAND:

DETERMINATION OF ESSENTIAL PATENTS AND PADDING BY MEANS OF
ECONOMETRICS

RESEARCH METHOLOGY

The present research study is a blend of doctrinal and empirical in nature. Hence, mixed
research method is been adopted. The doctrinal preposition of the study is made by a
systematic approach to examine the options developed in the selected research method. Each
of the ancillary questions of research problem is approached separately through the
appropriate research method. Since, the expected results are based on emperical study, an
appropriate research method of econometical modelling by the comprehension of trends
through prevailing models, lemmes and “Goodman and myer” 2005(so as to make empirical
results consistent with the report) and documentary analysis, were used to promulgate the
models in research paper on standard essential patent and FRAND regulations.
RESEARCH QUESTION

1. What describes the evolvement of FRAND into a globally converged standard of

royalty determination and a process through joint efforts of global courts?

2. How the changing interaction of FRAND with antitrust laws in three major
jurisdictions, respectively China, European Union and the U.S., in light of evolving
FRAND. Functions?

3. When and how FRAND is able to constrain the monopoly created by

standardization as what happens in a highly competitive market, antitrust laws
should gradually step down from interfering with SEP license practice to avoid
over-burdening the SEP owners and curtailing innovation(with emphasis on
padding and fair pay-offs)?

ABSTRACT

For a considerable amount of time standard essential patents have been integral to
intellectual property law regime.Courts internationally have championed and worked
significantly to provide persistent, lawful mentorship to the stakeholders like Standard
essential patent owners and the enforcers/implementers to come to FRAND(Fair, reasonable,
and non-discriminatory) consensus. There have been meticulous efforts by Anti-trust
agencies to develop a mechanism to identify and process FRAND violations. The evolving
FRAND terms triggers an old question of the Intersection of FRAND and antitrust
enforcement in SEP disputes. In what circumstances may FRAND breaches give rise to
antitrust violations has long been heavily debated in practice. Recently, there is a voice that
FRAND breaches should be left to the hands of contract. Laws rather than antitrust laws, as
the latter's intervention is both unnecessary and maydisturb market and innovation. This
article, without agreeing that the SEP license practice is ready to take an antitrust-free
system, observes that the intersection of FRAND with antitrust, laws is a dynamic process,
and with the FRAND terms evolving into perfection, the antitrust laws have begun and will
continue to refrain from intervening FRAND-violating behaviors.

The article is divided into four parts the first part introduces the background and main facets
in brief. Further in second part of the research work the evolution of FRAND as an
international converged touchstone for the purpose of determining the royalty and the
practice and procedure of the international law enforcing forums has been elaborated on.

The third part describes FRAND’s dynamic interaction with competition law regime in
prime jurisdictions such as United States, European Union and china.

The fourth and the final part elaborates on when FRAND is able to constrain the monopoly
created by standardization as what happens in a highly competitive market, antitrust laws
should gradually step down from interfering with SEP license practice to avoid over-
burdening (he SEP owners and curtailing innovation.

Briefly, this articleobserves that the emerging FRAND terms will affect the degree that
antitrust laws may interveneinto SEP license practice. This article elaborates on the
evolvement of FRAND into a globallyconverged standard of royaltydetermination and a
process through joint efforts of global courts. The article further dwells into the
changinginteraction of FRAND with antitrust laws in three major jurisdictions and market
economies of the world, in light of evolving FRAND. This article further highlights how
FRAND is able to constrain themonopoly created by standardization as what happens in a
highly competitive market, antitrustlaws should gradually step down from interfering with
SEP license practice to avoid over-burdeningthe SEP owners and restraininginvention and
improvement.
Finally this article would analyse the current legislative trends and jurisprudence governing
the evolution of SEP and FRAND terms in India. The jurisprudence related to SEPs and
related injunction is still in evolutionary stage, it would be worth noting the decision in the
pending cases that will ultimately shape India’s FRAND jurisprudence and also would help
in determining important issues namely whether competition commission has jurisdiction to
decide the royalty rates in SEP licensing agreement, injunctive relief and whether there
would be any guideline which could maintain a balance between the exclusive rights of
patentee along with the public interest.

Based on the underlying research in this article it can be observed that the antitrust
intervention of FRAND violations is not a warranted process.Instead, the intersection is a
dynamic one that changes with the evolvement ofFRAND. The global convergence of
FRAND royalty determination as well asextending FRAND to negotiation processes
suggests that FRAND is steadily movingtoward clarity, predictability and transparency.
FRAND is also being forcefullyenforced through contract laws and patent laws. One day, a
perfect FRAND couldprovide adequate and effective redress to both sides of the SEP
license, and leavelittle room for the SEP owners to manipulate or exploit the royalty terms.
WhenFRAND is able to constrain the monopoly created by standardization just as
acompetitive market, antitrust laws should gradually step down from interfering withSEP
license practice to avoid over-burdening the SEP owners and curtailinginnovation.
Furthermore, in the Indian Context this article would look at development of SEP
Jurisprudence and FRAND terms in light of various judicial pronouncements and legislative
formulations.
INTENDED RESULTS:
By abandoning the usual assumption that patents bring known benefits to the industry
or that their benefits are known to all parties, research have been able to derive
several results.

 In particular, research shall attempt to show that the threat of court disputes
reduces incentives to pad but at the cost of lower production of essential
patents.

 Second, it would attempt to show that upstream firms have more incentive
stop than vertically integrated firms, which internalize the fact that patent
proliferation raise the share of profits going to the upstream segment of the
industry but at the expense of its downstream segment.

 These results are expected to be consistent with empirical results obtained by

Goodman and Myers(2005) for the case of mobile telephone standards.