Response to India DDIP discussion paper on SEPs and their availability on FRAND terms

Brussels, April 22, 2016 – We would like to thank the Department of Industrial Policy and Promotion (DIPP) for providing this opportunity for public comment. We do not offer joint answers on each of the detailed questions in the consultation (though some members may choose to submit their own, more detailed individual responses). We instead offer some balanced views on key matters that the FSA finds important to emphasize. The Alliance seeks to promote some key principles that FRAND requires at least the following behaviours.

(1) A license for a SEP should be available at any point in the value chain where the standard is implemented, and the important terms of those licenses should be transparent to other companies implementing the same standards;
(2) A FRAND royalty should reflect the value of the invention. In most cases that means that it should be based on the smallest device that implements those patents, and additionally it should take into account the overall royalty that could be reasonably charged for all patents that are essential to that standard;
(3) Injunctions and similar legal threats should be a last resort;
(4) A FRAND commitment made in respect of a SEP should not fall away simply because the SEP is sold to another company.

Our members are united in the view that unfair and unreasonable SEP licensing practices pose a significant risk to the innovation eco-system, create barriers to entry for new market players, threaten to stifle the full potential for economic growth across major industry sectors, and ultimately harm consumer choice.