Diving below the surface

Stout’s Scott Weingust, MacHibler and John Bone discuss thechallenges with determining FRAND royalty terms for SEPs using the ‘top-downmethod’

Scott Weingust, Mac Hibler and John Bone, Stout

The licensing of standardessential patents (SEPs) typically requires that they be licensed on a fair,reasonable, and non-discriminatory (FRAND) basis. There are several methods that can be used todetermine FRAND royalty terms for SEPs (whether a running royalty rate, lump sumpayment, or other terms), one of which is typically referred to as the‘top-down method’. The top-down method has gained acceptance among many in theSEP licensing community, at least in part due to its reliance by the courts inboth TCL v Ericsson ¹ and Unwired Planet. ²