FRAND: After cars, the connected home is next

There is no doubt that FRAND is coming to the smart home market in a big way in due course, likely once the larger licensors in the connectivity space have established a benchmark in the automotive sector (where some of the challenges are not dissimilar, for example what is the royalty base where connectivity isn't the main aim of a device, and where in the vertical chain does one license). However, I was interested to read this article from @ManagingIP on the topic for its numerous and varied views from industry and the legal sector.

As set out, it is clear that a lot of the present friction comes from the expansion of FRAND issues into sectors unfamiliar with them, combined with the attempted adoption of a licensing model that may, or may not, need to be tweaked as one moves sector. As the article notes, transparency is key, but transparency is a difficult sell in a vacuum - no-one wants to be first, or the only one with their cards on the table. It may be that SEP pools can provide the needed intermediary in that regard.

Although it is clear that the EC SEP Expert Report is not a panacea (far from it), perhaps the basic principles on which the group did agree are a good start: (i) licensing at a single level in the value chain; (ii) a uniform FRAND royalty irrespective of the licensing level; and (iii) the ability to pass a FRAND royalty down the value chain. Some might say that the further up the chain one can license SEPs, the less the need to re-litigate old issues in new spaces (since, ultimately, each sector is purchasing the same chips to achieve connectivity), though questions of the value / royalty base in those different sectors plainly creates a difficult issue with such a simplistic analysis.