Judicial determination of FRAND royalties in the ICT sector: should courts determine FRAND royalties and, if so, how? Principles, methods and challenges

by Rita GarcĂ­a-Bennett

19 February 2021

To ensure accessibility to standards, some standard setting organisations require SEP holders to commit to license on fair, reasonable and non-discriminatory (FRAND) terms. These terms are subject to different interpretation, which gives rise to legal uncertainty and increased litigation. And whilst court decisions have helped clarify the meaning of these terms, judicial FRAND determination has been rare in Europe, where courts tend to shy away from determining FRAND royalties. This paper discusses the principles taken into account and the methods generally applied by the courts to determine FRAND royalties. It advocates for more guidance on valuationon methods, including from governmental agencies and the judiciary, and argues that judicial FRAND royalty determinations can benefit the licensing system, albeit methods and access to data, including regarding SEP essentiality, need improvement.