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A NAASTy Alternative to RAND Pricing Commitments

Marc Rysman () and Timothy Simcoe ()
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Timothy Simcoe: Boston University School of Management and NBER

No WP2010-056, Boston University - Department of Economics - Working Papers Series from Boston University - Department of Economics

Abstract: Voluntary standard setting organizations (SSOs) typically require participants to disclose their patents during the standard-setting process, and will endorse a standard only if patent holders commit to license them on “reasonable and non-discriminatory” or RAND terms. We argue that this policy is unworkable—the RAND standard is ambiguous and thus extremely hard to adjudicate. As an alternative, we propose a policy of Non-Assertion After Specified Time, or NAAST pricing. Under NAAST, technology vendors commit not to assert their patent after some previous specified time, but would be free to collect royalties as they wish up until that point. Under our proposal, technology producers would be compensated, vendors would have quick and eventually free access to standards and a large element of uncertainty due to litigation would be eliminated.

Date: 2010-01
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