There are no distinct/ standard “fair, reasonable and non-discriminatory” or "reasonable and non-discriminatory" (“F/RAND”) royalty rates/ terms for structuring IP / patent license terms, simplified negotiation process, avoidance of unnecessary litigation and courts’ guidance.

 

Patentees belonging to standards development/setting organizations (“SDO” or “SSO”), must abide their FRAND license (to be offered to the organization members and non-members) policy applied to "essential" patents.

 

There are no SSOs/ SDOs/ regulatory bodies in Europe and United States that provide formulas for setting FRAND royalties for license negotiations or determination of infringement damages.

 

FRAND pricing difficulties: risks of antitrust violations for discriminating the competitors; availability of alternatives to build a patented widget; price allocation between necessary and bundled claims needed for product manufacturing; giving volume discount (and determining discount amount); or not giving "zero" royalty to existing cross-licensees, etc.

 

Such pricing “anarchy” leads to creation of hodge-podge solutions (cross-licensing, volume discounts, joint R&D projects, or large down payments) resulting in technical “shotgun weddings” and commercial effect uncertainty.  ​​                                                            

 
“F/RAND” ROYALTY RATE DISPUTES
 

TEKAPULT suggests a Private Forum use as an alternative to some segments of judicial proceedings for determining reasonable and non-discriminatory royalty rates in patent license disputes. Upon request of a licensor and a licensee, or other parties, TEKAPULT would select a Referee Panel to ascertain RAND royalty terms.  Referee Panels analyze legal and regulatory guidelines, licensor-licensee market, technological, economic and patent-related evidence along with the legal arguments (briefs and responses) submitted by the opposing parties. The Referees’ authoritative, definitive and prompt decisions result in certainty of setting license terms for revolutionary patents on inventions in chemical, electronic, mechanical, electrical, pharmaceutical and other arts and industries. 

  

Unlike arbitrations where arbitrators are lawyers, Referee Panels are function-similar to juries comprising non-lawyers and lawyers. Referees consider the presented evidence and arguments, but do not rule on objections or motions.  Juries include people who may not be technically, financially, business or legally savvy and may not wish or able to comprehend complex technological and legal issues.  The Referee/ Tech-Legal Panels combine the Referees’ experience and expertise of trained and knowledgeable technologists, professionals and retired judges in formulating their joint decision/s.   

 

Such “privatization” of segments of judicial proceedings helps the court system by reducing the judges’ heavy case load and establishing the mileposts for courts’ decision guidance, removes an outcome guessing element being present in any jury case, saves money and time of parties involved in judicial proceedings, provides certainty in license negotiations, and yields definitive, authoritative and swift decisions in a cost-efficient manner. This “privatization” does not supplant but complements the IP litigation, which some potential litigants may not afford.

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