Competition, Intellectual Property and Standard Setting

Standard setting, the process of determining a common set of characteristics for a good or service, often promotes competition to the benefit of consumers.

Standards are particularly important in the Information and Communication Technologies (ICT) sector because they allow products to interoperate and therefore make networks more valuable. However, ICT standards also raise challenges because they often rely on patented technologies. A tension arises because patents protect the owner’s exclusionary right to exploit an innovation, while standards are intended for widespread use.

To review recent competition issues raised in this sector, the OECD gathered several experts in December 2014 for a hearing discussion which focused on recent cases and related issues. Other issues under discussion included: Standard-essential patents; Injunctions and Commitments to licence on fair, reasonable, and non-discriminatory (FRAND) terms. Access full set of documents

See also Executive Summary with key findings and the Summary of the discussion. Pour plus d'informations, lisez la Synthèse et le Compte rendu détaillé de la discussion.

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Key findings from the discussion

Standards in the information and communication technology (ICT) sector are beneficial…

The existence of standards has encouraged innovation and fast and continuing penetration of ICT devices (like smartphones) delivering important benefits to business, government and consumers.

Many important ICT standards rely on technologies covered by standard-essential patents (SEPs)…

This may raise potential for harm to competition stemming from patent holdup or royalty stacking. Standard Setting Organisations (SSOs) aim to mitigate these risks in their intellectual property rights (IPR) policies by requiring members to commit to licensing SEPs on “royalty-free” or “fair, reasonable and non-discriminatory” (FRAND) terms.

Commercial disputes can arise between SEP holders and standard implementers regarding the definition of FRAND terms...

While there is currently no generally accepted methodology for determining FRAND royalties, certain principles and techniques have emerged.

The availability of patent infringement injunctions in respect of FRAND-encumbered SEPs may significantly affect licensing negotiations with implementers, leading to holdup…

There are different views regarding FRAND-related injunctions but, overall, there is a growing reluctance by courts to grant them, and growing opposition by competition authorities.

Co-operation between SSOs, patent offices and competition authorities can be useful…

SSOs can play a very important role in this debate and there is support for further work within SSOs to continue efforts to clarify their IPR policies on FRAND.

DECEMBER 2014 SESSION DOCUMENTATION

OECD PAPERS

OECD background paper

Note de référence de l'OCDE

Executive summary with key findings

Synthèse

Detailed summary of the discussion

Compte rendu detaillé

PAPERS FROM PARTICIPANTS

Finland

Germany

Italy