The context for the first of two standards-related conferences this week was the launch of the Liege Competition and innovation Institute (or LC2I to its friends). Perhaps unsurprisingly, given the sponsor, the day had something of a pro-licensor flavour, even though recent legal developments, at least in the US (see here), have been rather more pro-implementer.
The majority of panellists seemed to consider the concept of “hold-up” – the idea that SEP holders can extract over-compensation for their rights by virtue of their inclusion in an industry standard – to be something of a mythical beast, that one can describe, but never actually encounter. But agreement was not absolute. Renate Hesse of the United States Department of Justice emphasised that an understanding of FRAND was necessarily founded on the potential for hold-up, even if empirical data tends to suggest that, on the whole, the industry is not in fact being ‘held up’. Coming at the matter from a different angle, Professor Larouche (University of Tilburg) also noted the missing theory of harm from last year’s Huawei judgment (something that was also discussed at the time, including on this blog) and pointed out that it is not only potential exclusion which can harm competition, but also exploitation, in the form of overly high royalties. This is surely correct: however rare (or frequent) such “over-priced” licences are in practice, the FRAND concept surely implies a measure of restraint in royalty demands and is not limited, as one of the panellists suggested, to being a purely qualitative / procedural concept.
If anything, it was FRAND itself which was the “unicorn in the room”: the focus of the FRAND debate has shifted over the past few years away from the question of what FRAND means, in terms of value, to more tractable – albeit still highly controversial – issues. I would expect this trend to continue. With most SSO IPR policy reviews now having completed without consensus for change (or, in the IEEE’s case, with change imposed despite the lack of consensus), the most likely focus now seems to be on measures to improve declaration processes, and to reduce possible over-declaration. This may prove a more fertile ground for agreement, although aligning incentives, legality and cost-effectiveness is unlikely to be straightforward.
In the meantime, we look forward to part 2 of the week of standards conferences at the BIICL this Wednesday.