What is FRAND?
FRAND stands for Fair, Reasonable, and Non-Discriminatory licensing terms. It is a commitment made by companies that own Standard Essential Patents (SEPs) – patents that are indispensable for implementing global technology standards such as 4G, 5G, and Wi-Fi. Under FRAND, SEP holders agree to make their technology accessible to all, on terms that are fair and reasonable, ensuring interoperability across devices and networks worldwide.
At Ericsson, we are committed to the FRAND system of licensing SEPs to ensure a healthy ecosystem for the future.
Why is FRAND important?
FRAND enables innovation and global cooperation
By enabling access to standardized technologies at reasonable rates, FRAND supports a healthy ecosystem where innovators are incentivized to share the results of their massive R&D investments and reinvest in next-generation solutions.
FRAND licensing is essential for fostering global collaboration in technology development. By guaranteeing fair access to SEPs, FRAND ensures that companies worldwide, regardless of size or geography, can adopt and implement standardized technologies in the equipment they produce and sell. This framework promotes interoperability, accelerates innovation, supports economies of scale, and creates a fair playing field where developed and emerging economies can contribute to and benefit from global standards.
FRAND licensing and reasonable royalties also create a collaborative framework where innovation is encouraged and protected. In Standards Development Organizations (SDOs), participants from diverse sectors—SMEs, academia, multinational companies like Ericsson—come together, contributing their expertise towards shaping global standards. This inclusivity extends across all regions globally, allowing contributions from emerging markets, developed economies, and various industries to be recognized.
FRAND mitigates the risk of proprietary technology, closed ecosystems and de-facto standards. These scenarios allow owners to demand unreasonable prices and unfairly restrict access to technology. FRAND fosters an open, collaborative environment while enabling fair access to technology and wider adoption.
Companies like Ericsson bring their best insight and inventions to the table during the standardization process, based on billions of dollars in R&D investments. We rely on patent licensing to receive reasonable royalties that fund the next generation of telecom standards. This in turn accelerates the pace of development and creates a virtuous cycle of innovation. It’s how we’ve gotten from 1G to 5G in such a short time.
