From Patent Hold-Up to Patent Hold-Out?

Standardization is a process through which potential rivals cooperate to have the best technological solution adopted as the next standard. They pool together financial, human and material resources. Intellectual property rights, especially patents, are a powerful tool for them to recover investments made in the process and keep participating in it. However, to avoid abusive use of patents incorporated in de iure standards, companies contributing to the standard development have to comply with specific duties, amongst which making the technology essential to the standard available on Fair, Reasonable and Non-Discriminatory terms and conditions, i.e. the so-called (F)RAND commitment1. This commitment has been created to prevent patent hold-up from patent holders, which could force implementers to enter into disadvantageous license agreements. With the changes in the cellphone market in the last ten years, the content of this (F)RAND commitment has been challenged in courts and in front of antitrust and competition authorities. The question is whether this duty, set up to avoid hold-up, is not used by some implementers to engage in “hold-out” or “reverse patent hold-up” strategies.