Call for evidence on the feasibility of an IPO-led FRAND Opinion Service

This is a call for evidence that aims to test the feasibility and design of an IPO-led FRAND Opinion Service (“the Service”). It does not assume that the Service will be introduced. This call for evidence seeks information and evidence as to whether the Intellectual Property Office (IPO) should consider proceeding with a clear and operationally viable service that represents value for money and helps address FRAND licensing frictions.

The government is not consulting again on whether to introduce a standalone Rate Determination Track in the Intellectual Property Enterprise Court (‘IPEC’). Consultation evidence did not support that proposal as a clear and workable route. However, respondents broadly supported the underlying objectives of quicker, more affordable and more predictable ways to assess FRAND positions, particularly for SMEs and less experienced SEP market participants.

The evidence indicated a potential role for an independent assessment of whether a licensing position falls within a plausible FRAND range at an early stage of the licensing process. A "plausible FRAND range" means a range of licensing outcomes that could reasonably be supported by the available economic, valuation and licensing evidence. It is not intended to create or describe a separate legal test.

It was also clear from evidence that the underlying concern is that parties may lack access to an early, independent and proportionate assessment of their respective FRAND licensing position. These challenges may be particularly acute for SMEs and parties with less experience of SEP licensing, and may contribute to prolonged negotiations, uncertainty and escalation towards more formal dispute-resolution processes. Such an assessment could support negotiations before parties resort to alternative dispute resolution (ADR) or court proceedings. See government response to SEPs Consultation.

Therefore, the IPO is seeking to understand the feasibility and potential design of a voluntary, non-binding IPO-led FRAND Opinion Service, which could help parties assess whether a proposed SEP licence offer falls within a plausible FRAND range, as a way of making SEP negotiation outcomes more efficient.

The purpose and likely impact

If the IPO decides to establish a FRAND Opinion Service, its purpose and likely impact should be clear.

The emerging service concept has been developed in light of consultation responses concerning dispute resolution and alternatives to a Rate Determination Track in the IPEC.

That includes a less formal approach to resolving licensing issues, that is less complex and adversarial and provides lower costs to access than current options.  

Although not an exhaustive list, the IPO expects the proposed service design to have the following purpose:

• to support parties during SEP licensing negotiations by providing a proportionate, non-binding assessment of FRAND licence terms
• to help parties understand their respective licensing positions, assess risk and support more informed negotiations
• to assist negotiations without determining the dispute or replacing negotiation, ADR or court proceedings

The potential impact of introducing such a service could include:

• earlier conclusion of licensing negotiations, before parties resort to dispute-resolution routes
• over time, building a new data point for SEP licensing that could increase certainty and efficiency for licensing outcomes
• offer accessible independent assessments by the IPO of whether a licensing offer falls within a plausible FRAND range
• create a new route for parties to address economic and valuation issues, rather than deciding infringement, validity, essentiality, or liability