Vident Partners provides vetted standard-essential patent and FRAND expert witnesses for cases involving essentiality analysis, FRAND royalty rate determination, portfolio-level valuation, top-down and comparable-license methodologies, and breach of a standards body licensing commitment. Request a referral today.
Find a Standard-Essential Patents & FRAND Expert →Overview
Standard-essential patent litigation is a distinct discipline within patent practice, and the experts who work in it are not interchangeable with general patent damages experts. The dispute is rarely whether a product practices a claim -- if the product complies with the standard and the patent is truly essential, infringement follows almost automatically. The dispute is what a fair, reasonable, and non-discriminatory rate is for a portfolio of such patents, and whether the patent holder or the implementer negotiated in good faith.
The obligation originates in the standards body's own intellectual property rules, which are contractual rather than statutory. ETSI, whose standards underlie cellular telecommunications, operates an IPR policy built on a FRAND licensing commitment intended both to encourage patent holders to contribute their most innovative technologies and to enable implementers to access those technologies on FRAND conditions; members must inform the Director General in a timely fashion if they are aware of a patent that might be essential, and holders are requested to provide an irrevocable undertaking in writing that they are prepared to grant irrevocable licenses on FRAND terms 1. ETSI has publicly stated that it takes no position on the correct interpretation of its own IPR policy and that specific licensing terms are commercial matters between the companies 1. The Common Patent Policy shared by ITU-T, ITU-R, ISO, and IEC takes a parallel approach through a Patent Statement and Licensing Declaration form offering three options: to negotiate licenses free of charge on a non-discriminatory basis on reasonable terms, to negotiate licenses on a non-discriminatory basis on reasonable terms and conditions, or to decline, in which case the deliverable shall not include provisions depending on the patent 2.
The United States framework for valuing those commitments was set out in the Microsoft v. Motorola litigation. Microsoft sued as a third-party beneficiary of Motorola's RAND commitments, alleging that Motorola had breached its obligation to offer RAND licenses in good faith; the district court held a bench trial to determine a RAND rate and range, then a jury returned a breach of contract verdict of $14.52 million, and the Ninth Circuit affirmed 3. The district court approximated the rates the parties would have agreed upon by constructing a hypothetical negotiation adapted to the RAND context, considering the factors an SEP owner and implementer would weigh in an actual negotiation and evaluating the objective contribution each patent made to the standard, working from the fifteen-factor Georgia-Pacific framework rather than mechanically applying it 3. Modern SEP damages testimony is built on that foundation, typically through comparable license analysis, top-down aggregate royalty apportionment, or both.
Counsel should also be careful with agency policy in this area because it has moved. The December 19, 2019 Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments, issued jointly by the USPTO, NIST, and the DOJ Antitrust Division, expressly stated that it offered only the views of the agencies and had no force or effect of law -- and it has since been withdrawn 4. Citing it as current policy is a recurring error. Typical engagements in this specialty involve essentiality analysis mapping claims to the standard specification, portfolio evaluation and sampling methodology, FRAND rate setting, non-discrimination analysis comparing the offer to existing licenses, willing-licensee and hold-out conduct, injunctive relief and exclusion order availability, and antitrust counterclaims premised on deception of a standards body.
Under the ETSI IPR Policy, members must inform the Director General in a timely fashion if they are aware of a patent that might be essential, and standard-essential patent holders are requested to provide an irrevocable undertaking in writing to grant irrevocable licenses on fair, reasonable and non-discriminatory terms.
Case Types
Essentiality analysis mapping asserted claims to a published standard specification
FRAND royalty rate and range determination through comparable licenses or top-down apportionment
Breach of a standards body FRAND or RAND licensing commitment as a third-party beneficiary claim
Non-discrimination analysis comparing an offer against the holder's existing license portfolio
Willing-licensee, hold-up, and hold-out conduct in licensing negotiations
Availability of injunctive relief or an ITC exclusion order against a standard implementer
Antitrust and unfair competition counterclaims premised on deception of a standards-setting organization
Qualifications
Related Specialties
FAQ
Two different profiles are usually required. Essentiality and technical testimony calls for an engineer with deep familiarity with the specific standard specification and, ideally, direct participation in the relevant standards development organization. FRAND rate testimony calls for an economist or licensing professional experienced with comparable license analysis, top-down apportionment, and the hypothetical negotiation framework as adapted to the FRAND context. Cases frequently require both.
These experts are retained for essentiality analysis, FRAND royalty rate determination, breach of a standards body licensing commitment, non-discrimination comparisons across a licensing portfolio, disputes over whether a party negotiated as a willing licensee, injunction and ITC exclusion order availability, and antitrust counterclaims premised on deception of a standards-setting organization.
It comes from the standards development organization's own intellectual property rules, which operate as a contract rather than a statute. Under the ETSI IPR Policy, members must timely disclose patents that may be essential and are asked to provide an irrevocable written undertaking to license on FRAND terms. The Common Patent Policy used by ITU-T, ITU-R, ISO, and IEC works through a Patent Statement and Licensing Declaration form with free-of-charge, RAND, and unwilling-to-license options. Because these are contractual undertakings, implementers commonly sue as third-party beneficiaries.
In the United States the anchor is Microsoft v. Motorola, where the district court determined a RAND rate and range by constructing a hypothetical negotiation adapted to the RAND context, weighing the factors an SEP owner and implementer would consider in an actual negotiation and assessing the objective contribution each patent made to the standard, using the Georgia-Pacific factors as a starting framework rather than a checklist. Contemporary practice implements that through comparable license analysis, top-down aggregate royalty apportionment, or a combination of the two.
No. That statement expressly said it offered only the agencies' views and had no force or effect of law, and it has since been withdrawn. Counsel and experts who cite it as current federal policy are exposed on cross-examination. The governing sources remain the standards body's own IPR policy and the case law construing the resulting contractual commitment.
In general, intellectual property expert fees are determined by the expert themselves, based on a variety of criteria. Among those criteria are professional experience, forensic experience, academic qualifications, technical expertise, and publications. Vident does have some influence over expert fees by comparing experts within a specialty, but ultimately it is a personal decision by the expert.
Related Insights
Patents are governed by a unique, highly specialized body of law. Patent attorneys must pass a special patent bar exam and register with the U.S. Patent and Trademark Office, and patent appeals are...
Case AnalysisThis one could be headed to the Supreme Court. In Hepp v. Facebook (Nos. 20-2725 & 2885, 3d Cir., 9/23/2021), https://www2.ca3.uscourts.gov/opinarch/202725p.pdf, the Third Circuit Court of Appeals...
Case AnalysisNo, you wouldn’t. But a company called RXD Media apparently did, and after years of litigation is now permanently enjoined from any commercial use of the terms “ipad.” RXD Media, LLC v. Apple, Inc.,...
Sources
Vident Partners connects attorneys with qualified standard-essential patents & frand expert witnesses. Complimentary consultation, 24-hour turnaround, no obligation.
Request an Expert →