In today’s connected ecosystems, different products made by different companies must be able to work together. Without standards creating that interoperability, the ability of companies to provide meaningful innovative products to consumers is limited. Standards provide common, interoperable platforms which companies can use as the basis for competitive differentiation. Such platforms not only generate competitive mass markets, but also enable the supply chain efficiencies needed for industry to provide leading-edge innovation to consumers at affordable prices.
Successful standards provide market players with the confidence required to invest in implementing those standards (for example, by making the necessary investments in developing, manufacturing and marketing standard-implementing products) and to add their own unique, product-differentiating technologies to standardised features. Consumers benefit from the availability of such distinctive, yet interoperable, products at reasonable costs.
Because the core objective of standardisation is the wide-spread adoption of the technologies it describes, participants in most standards-setting organisations voluntarily agree to grant licenses to their SEPs on “Fair, Reasonable and Non-Discriminatory” (FRAND) terms. These FRAND commitments accomplish two goals: Firstly, implementers of a standard can feel secure that they can get licenses on fair and reasonable terms, and secondly, the SEP holders can receive appropriate remuneration for their patented inventions.
Abuses of commitments to license standards-essential patents on fair, reasonable and non-discriminatory terms are the Fair Standards Alliance’s primary concern. Where such abuses occur, or where the possibility for them to occur is tolerated, the ability of standards to contribute to innovation and economic growth at large is at risk.