Courts, FRAND and SEPs: Valuation Methodologies and Jurisdictional Competition

Abstract

This article examines the grounds and constraints underlying the adoption and application of methodologies for determining FRAND royalties and their implications for legal certainty and the efficient licensing of standard-essential patents. To this end, it adopts a qualitative approach based on a literature review and a comparative analysis of the experiences of the United Kingdom, China, and Brazil. The study first analyzes the economic and institutional foundations of technological standardization, Standard Essential Patents (SEPs), and FRAND commitments. It then examines the main methodologies employed in the determination of FRAND royalties, particularly the comparable licenses approach and the top-down method, as well as their limitations. Finally, it compares the selected jurisdictions, identifying convergences, divergences, factors influencing methodological choices, and the challenges arising from the emergence of global fora for resolving SEP-related disputes. The article concludes that the judicial determination of FRAND royalties is predominantly case-specific and largely dependent on the evidentiary record available to the courts, with no uniform valuation methodology being consistently adopted across the jurisdictions examined.