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Diving below the surface

Intellectual Property Magazine

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’

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

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