Licensing commitments in standard setting organizations
Because ICT standard frequently incorporate patented inventions, standard setting organizations have designed intellectual property policies whereby the owners of such « standard essential patents » must commit ex ante to license them on fair reasonable and non-discriminatory terms to manufacturers of standard-compliant products. However, these commitments are vague and may not be sufficient to prevent patent hold-up in practice. In this paper, we develop a simple framework to analyze the consequence of ineffective FRAND commitments, and compare them with legally binding commitments on a royalty level or a royalty cap. We show that the cap is systematically preferred by the licensor, while it has ambiguous effects on consumers depending on the licensorís preferred alternative strategy.