Moving Away from High-Level Theories: A Market-Driven Analysis of FRAND

Abstract

The mobile communication sector is often used as an example to support claims that the FRAND regime is broken because of the risk of hold-up and royalty stacking. Based on an analysis of market-related data, this article argues that the allegations that hold-up and royalty stacking have been pervasive in the mobile communication sector are implausible. The analyzed data reveal no adverse consequences of hold-up and royalty stacking in terms of harm to the standard-setting process, reductions in the rate of innovation, or levels of R&D investment: It is alleged that those seeking to justify the significant reforms to the FRAND regime on the basis of hold-up and royalty stacking have not met the burden of proof that these reforms are necessary or even desirable.