ABSTRACT
Technical standards have assumed significance in every facet of our existence. They serve the interests of the consumers and producers alike. The former can benefit as problems arising from the inefficiencies of the standard markets can be addressed, while the benefits for the latter stem from the reduction in transaction cost due to standardization. Standards are therefore important for enhancing efficiency of the production systems, the dividends of which accrue to the economy as a whole. In the evolution of the standards, standard essential patents (SEPs) have played an increasingly significant role. For nearly two decades, licensing problems involving SEPs have been addressed through active interventions of the standard setting organizations, the competition authorities and the courts. Through these interventions prospective licensees have been able to obtain licences on SEPs on fair, reasonable and non-discriminatory (FRAND) terms. Although FRAND licences have been granted by the courts in various jurisdictions, there seems to be less conceptual clarity as to what would constitute a “fair” royalty rate and “non-discriminatory” licensing practice. Over the past few years, there have been several cases in India where courts have adjudicated cases resulting in the grant of licences on FRAND terms. There are several questions that these cases have given rise to, especially the terms on which the licences were granted.
