FRAND in India


In the last several years, India has raised several novel and controversial concerns regarding standard-essential patents (SEPs). For example, in 2013 and 2014, the Competition Commission of India (CCI) issued investigation orders against Ericsson, alleging that the company violated its commitments to license on fair, reasonable, and nondiscriminatory (FRAND) terms by imposing discriminatory and “excessive” royalty rates and using Non-Disclosure Agreements (NDAs). In its investigation orders, the CCI stated that “forcing” a party to execute [an] NDA” and “imposing excessive and unfair royalty rates” constitutes “prima facie” abuse of dominance and violation of section 4 of the Indian Competition Act, as does “[i]mposing a jurisdiction clause debarring [the licensee] from getting disputes adjudicated in the country where both parties were in business.” Most recently, India’s Department of Industrial Policy and Promotion (DIPP) issued a Discussion Paper on SEPs, which, among other things, expresses concerns about holdup by patent holders while omitting any concerns about holdup and holdout by implementers. 

This article analyzes these developments, providing guidance based upon the approach taken by the United States and the Europe Commission. We offer policy recommendations concerning the availability of injunctive relief; the advisability of a one-size-fits all template for standard-development or standard-setting organizations (SDOs or SSOs); the imposition of royalty caps or competition sanctions for “excessive pricing”: the use of NDAs and the “Non Discriminatory” element of FRAND; balancing desires for transparency with needs for confidentiality in licensing; and the use of international arbitration on a portfolio basis as likely the most efficient and realistic means of resolving FRAND disputes.