NPE’s Limited To SSO FRAND Royalty?

That’s the recommendation of Herbert Hovenkamp of the College Of Law at The University of Iowa in his  paper, “Competition in Information Technologies: Standards-Essential Patents, Non-Practicing Entities and FRAND Bidding.” The summary of the paper states:

“The non-practicing entity (NPE) that voluntarily declines to participate in an SSO process should generally be held to the FRAND royalty as its measure of its damages, even though its particular patents are not FRAND-encumbered. In this case a “reasonable” royalty is the royalty that the patent holder would have obtained in the competitive market in which it might have participated. The case for limiting NPE damages in this way is strongest when the NPE had actual or objectively reasonable knowledge of the SSO process but declined to participate. The case is weakest when the SSO’s processes were not well communicated to outsiders or the NPE in question was not permitted to participate.”

Here is a link to the paper for further reading: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2154203&

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Filed under NPE Articles, Patent Trolls

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