Washington, D.C., partner Bob Stoll wrote an article for Law360 titled, “What You Should Know about US Standard-Essential Patents.”
In the article, Bob discusses how standards arise from different sources upon the recognition of their benefits. Standards set a uniform design, which permits interoperability and the creation of many different products using a common form.
With the rapid development of new technologies, many manufacturers and technology experts quickly recognize the need to adopt a specific technology that will become the new standard and gather to create a new SSO.
Wi-Fi is an example of such a technological standard that permitted the development of many interoperable products. Because of the importance of the industry standard, most users, manufacturers and industry experts want to participate in the standard setting.
There are great benefits to the public in the wide range of interoperable products that will be created as a result, and great benefits to the participant whose framework is adopted into the standard, providing seamless transition for her products and wide-ranging use of her framework. But when the private standard-setting organizations set the standard, it excludes current alternatives and those that would exist without the standard. Those with existing designs whose frameworks are not adopted may see their market shares reduced.
Bob concludes: “Our system must both fairly compensate the innovator and spur further innovation. The adoption of an SEP into a standard boosts usage of the SEP technology and spurs the creation of even more interoperable products for the consumer. The FRAND requirement compensates the patent owner but balances her contribution against the increase in usage of her technology because of its incorporation into a standard. The agreement to accept a FRAND license in exchange for having an SEP in a standard strikes a fair balance, and the availability of damages will make any wronged party whole.”