Interesting points. In terms of rationales for preferring FRAND over more specific ex ante terms, alongside flexibility as mentioned by Mattias there is also the issue of administrative cost. The burden of more detailed ex ante licence terms mainly falls on the innovators, while the benefit falls on the implementers. There is therefore likely to be a tension between innovators (who will dislike ex ante obligations) and implementers (who will like them).

This was looked at in a little more detail in the IPI’s submissions to the Commission in November last year, available at http://ec.europa.eu/enterprise/ict/policy/standards/ws08ipr/contributions/20081118IPI_en.pdf.

Chris

I think you touch upon a very important question, namely why stakeholders (SSOs and patentholders) deliberatly leave licensing terms vague. What is the rational for having an incomplete contract of this kind (in the presense of a potentially significant hold-up problems subsequently)? I can think of many reasons but perhaps the most important being that due to incomplete information and uncertainty there is a mutual motive for keeping some flexibility even beyond the point of no return… /Mattias

If ex ante licensing terms are only specified up to “fair and reasonable” (and not anything more specific) the meaning of FRAND will inevitably be decided in court. A “reasonable” outcome is not guaranteed.

And if SSO IPR policies do not become much more specific about disclosure and licensing obligations, I would predict continued involvement by antitrust authorities.