Interface of Essential Patents and FRAND: a possible integration with the compulsory patent license of abuse of economic power
DOI:
https://doi.org/10.18256/2238-0604.2026.v22i.5356Keywords:
Standard Patents Essentials, FRAND, compulsory licensingAbstract
The text analyses the relationship between standard-essential patents, FRAND licensing and compulsory licensing on the grounds of abuse of economic power. It is based on the premise that technological standards reduce transaction costs, promote interoperability and stimulate innovation, particularly in knowledge-intensive sectors. However, this process can also confer market power on the holders of essential patents, as companies wishing to produce goods compatible with the standard generally need to licence these technologies. In this context, the FRAND model seeks to ensure licences are granted on fair, reasonable and non-discriminatory terms, allowing the holder to receive royalties whilst, at the same time, preventing opportunistic or anti-competitive practices. In this context, the FRAND commitment serves as a mechanism to strike a balance between the right holder’s exclusive rights and the industry’s need for access to the technological standard. However, the text highlights that determining fair, reasonable and non-discriminatory royalties is a highly complex process, due to information asymmetries, difficulties in valuing the technological contribution, defining the basis for calculation and delimiting the territorial scope of the licence. These factors lead to recurring conflicts associated with ‘hold up’ and ‘hold out’ situations. For this reason, compulsory licensing on the grounds of abuse of economic power is presented as an instrument of public policy and a means of correcting market failures, capable of preserving competition and the dissemination of technology without extinguishing patent rights. In the Brazilian context, the importance of coordinated action by the Administrative Council for Economic Defence (CADE) and the National Institute of Industrial Property (INPI) in building a more predictable and balanced institutional environment is particularly noteworthy.
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