(F)RAND Licensing

SSOs sometimes ask members to commit to licensing their standard-essential technology on reasonable and non-discriminatory (“RAND”) terms. For example, both the ITU and the IEEE as members to agree to grant licenses on RAND terms.

International Telecommunications Union ("ITU"), [an] SSO[,] ... Policy provides that a patent embodied fully or partly in a standard must be accessible to everybody without undue constraints. … Any holder of a patent under consideration for incorporation into an ITU standard is required to submit a declaration of its commitment to negotiate licenses with other parties on a non-discriminatory basis on reasonable terms and conditions.

— Microsoft Corp. v. Motorola, Inc., 795 F. 3d 1024, 1031 (Fed. Cir. 2015).

IEEE [asks] patent holders if they are willing to grant licenses on [RAND] terms … the IEEE-SA does not involve itself in license negotiations between implementers and patent-holders.

— Written Testimony of The IEEE Standards Association before the Subcommittee on Antitrust, Competition Policy and Consumer Rights of the Senate Committee on the Judiciary entitled “Standards Essential Patent Disputes and Antitrust Law” Tuesday, July 30, 2013 Room 226, Dirksen Senate Office Building, https://www.judiciary.senate.gov/imo/media/doc/7-30-13KulickTestimony.pdf, Last Accessed on October 13, 2016.

These RAND contracts are subject to common-law obligations of good faith and fair dealing.

To achieve that interconnection, patent-holders often join together in compacts requiring licensing certain patents on reasonable and non-discriminatory ("RAND") terms. Such contracts are subject to the common-law obligations of good faith and fair dealing.

— Microsoft Corp. v. Motorola, Inc., 795 F. 3d 1024, 1029-1030 (9th Cir. 2015).