Federal judge has set a FRAND rate for Microsoft's licensing of Google's SEP. Microsoft had previously brought a lawsuit against Google's Motorola for a breach of FRAND contract. It feels that the initial royalty demand of Motorola was "blatantly unreasonable and constituted a breach of Motorola's FRAND pledge. In the first trial last year, an ITC judge had concluded that "Motorola was not interested in good faith negotiations and in extending a FRAND license" to Microsoft.
A FRAND agreement is a win-win situation that allows companies involved to all benefit. Each and every companies in the FRAND network can gain from the licensing fees, and can gain from the ability to innovate because it is assured of the opportunity to license a patent from another company in the network that it knows would be essential for its development. Although there is a limit to how much licensing fees can be obtained, the benefits of being able to access other patents, and innovate far outweighs the cost.
In addition, a company does not earn money from preventing or suing others from using its technology or infringing its patents. It earns money from licensing their patents and therefore, FRAND is generally largely beneficial for companies. FRAND also allows companies to make friends, rather than foes because of the openness in sharing and controlled licensing price.
After this lawsuit between Microsoft and Google, it will then be interesting to see if they are friends under FRAND or foes with or without FRAND.
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