ABSTRACT
In the last four decades, standard setting or standard development organizations (SSOs or SDOs) have been the subject of antitrust scrutiny. Both the U.S. and EU have exercised competition law oversight over SSOs. SSOs have established the fair, reasonable and non-discriminatory (FRAND) licensing of standard essential patents (SEPs) policy to address some of the competition concerns around the 1990s, when the main challenges were patent ambush, excessive royalty rates and patent transfer problems. However, in the past 30 years, the environment surrounding SEPs has greatly changed, the information asymmetry between patentees and implementers has expanded, the transaction costs have increased significantly, and the divergence in legal standards between jurisdictions that are headquarters to SSOs and jurisdictions that are home to SEP-implementing manufacturers has further sharpened. This chapter argues that we need to overcome the challenges through more self-regulation by SSOs, especially in conducting essentiality checks, being the depository of FRAND-compliant royalty rates, and concretizing FRAND-compliant terms. This chapter also advocates light-handed regulation, via guidelines, of the self-regulation by SSOs through international cooperation among five key competition authorities, namely the EC, USFTC, and competition agencies of Taiwan, Korea and China, which have all dealt with SEP-related issues.
