FRAND commitment and standard adoption
Marta Stryszowska, senior economist at Microeconomix, gave a presentation in the session “Intellectual Property” of the Thematic Meeting of the French Economic Association that took place in Besançon on 9-10 June 2011.
During this presentation, she talked about the introduction of a new technology under different regulatory framework. In particular, Marta discussed how the implementation of FRAND (Fair Reasonable And Non Discriminatory licensing terms), may affect the introduction of unique irreplaceable technological solutions into the market.
She argued that in absence of FRAND, holders of ex-ante irreplaceable patents may hesitate to sign standard setting agreements if the resulting network effects are not sufficiently high. This is because the introduction of a standard may result in a hold-up problem diminishing their profits. By assuring that the hold-up problem does not take place, the implementation of FRAND may thus stimulate the introduction of standards.
