SEPs in Indian Innovation Policies

 In March 2016, the DIPP had circulated a “Discussion Paper on Standard Essential Patents and their Availability on FRAND Terms.” It contained several issues for resolution inter alia relating to the need for amending statutes, creating guidelines for Indian SSOs, defining FRAND and fixing royalty calculation methodologies, use of non-disclosure agreements, transparency and patent pooling. 

The deliberations on the 6G Alliance propose to create 100 specification-dependent 6G SEPs – this would increase India’s visibility from nothing to something; but, other than increasing visibility, there is no policy direction on what our long-term domestic innovation goals are, where we place ourselves in the global SEP ecosystem, and how we want to support our domestic innovators. The proposed Telecom Policy advocates for a Sovereign Patent Fund – a mechanism that has been tried, tested and failed in several other jurisdictions, considered very problematic and an idea that’s possibly outdated.

In the limited discourse that has followed on this topic, several concerns are apparent. First, the blanket mandate of creating more SEPs is disjointed from any discussion on domestic directions on the FRAND commitment. With lack of a background clarification on what meaning basic SEP concepts hold in the Indian innovation ecosystem, the success of targeted sector-specific policies will be very limited. Additionally, a broader question is whether the Indian policy-making regime believes that a separate regulatory framework must define SEP participation rules for every innovation and manufacturing sector? It is not the requirement, nor the need, of an SEP policy to identify every domain sub-structure and dictate its behaviour. For a policy on SEPs to bring a sense of certainty, rules of conduct need to be defined broadly for the entire innovation ecosystem.

Source-https://spicyip.com/2025/11/seps-are-decorative-acronyms-in-indian-innovation-policies.html

China’s Many Faces of FRAND Mark A. Cohen* Asia Society of Northern California

 China has become a major destination for resolution of disputes over the licensing of patents incorporated into global technical standards. These patents are generally required to be licensed on “FRAND” terms. FRAND is an English language acronym that consists of four separate components: (A) “fair”, (B) “reasonable”, (C) “and” (D) “non-discriminatory.” Chinese courts have typically applied these four admittedly vague components in their Chinese translations, rather than their native English. These translations have not been standardised across cases and policy documents. There are often multiple translation variants in an individual judicial decision with at least 120 potential variant translations of the four FRAND components. In addition, there are three significant grammatical variants, plus various combinations of the four components, which brings a total of potential variants used by Chinese courts to over 500. Not all these variants impose new meanings of FRAND. In fact, the most significant of the variant translations is grammatical and not based on a semantic difference. It entails removing a Chinese term for “and” and utilising the Chinese enumerative comma or dunhao, which looks like a backwards comma, to replace the Western comma. According to relevant Chinese national standards and practice, the use of the dunhao means “pause.” It can mean “and” or “or.” It potentially fragments the integrated concept of “FRAND” into its separate components. In this dominant translation variant, FRAND means “fair and/or reasonable and/or non-discriminatory.” It might more appropriately be called “FRND”. 

The Chinese courts’ use of FRND maximises judicial discretion by facilitating new combinations of individual FRAND components, thereby selectively ignoring certain FRAND components, and by introducing new terms into FRAND. These translations have also worked to the disadvantage of the foreign party by imposing preferential treatment for a Chinese licensee or a rate that is equal to the lowest rate charged by the licensee, regardless of the costs and challenges faced by the foreign licensor in negotiating and litigating with its Chinese counterpart. While foreign courts and companies have observed that it is difficult to obtain fair remuneration for standards-essential patents (“SEPS”) licensed to China, these varied translated “faces of FRAND” are not observable to readers who rely solely on English translations. The English translations that I have reviewed have uniformly declined to address inconsistent translations from English into Chinese and back into English. These Chinese translations are also inconsistent with the translations into Chinese of international organisations and the approaches to translating FRAND’s vague components that have been undertaken by many foreign countries and economies. The effect of these mistranslations is to not merely to uniquely translate FRAND in judicial decision making, but, in certain instances, to suggest or impose new meanings based on Chinese law upon FRAND. These new Chinese meanings also serve to facilitate transplanting FRAND into new areas of the law and diplomacy where the Chinese government typically has expressed an interest in managing private property rights to serve governmental interests.

Download paper-

https://chinaipr2.wordpress.com/wp-content/uploads/2025/10/cohen_2025_47_eipr_issue_7_print-1.pdf

Global Game of SEP litigation and How India is drawn into it

Standards are technical requirements or specifications that seek to provide a common design for a product or process. Patents which are essential to a standard and have been adopted by a Standard Setting Organization (SSO) are known as SEPs. However, the exclusive rights conferred by patents on inventors may defeat the object of making standards available to all for public use. In order to address this problem, most SSO’s have defined IPR policies where SSO members must commit to licensing their SEPs on terms and conditions that are “Fair, Reasonable and Non-Discriminatory” (FRAND). These commitments are meant to protect technology implementers while ensuring that Patent holders receive an appropriate reward for their investment in research and development. SSOs can be governmental, quasigovernmental or private. These are responsible for setting, developing, coordinating, interpreting and maintaining standards. The Bureau of Indian Standards is India's national SSO. In the Information and Communications Technologies sector the Telecom Engineering Centre is the only formally recognized telecom standards/ specification/type approval body in India. Global ICT Standardization Forum for India, Telecommunications Standards Development Society, India (TSDSI), and Development Organization of Standards for Telecommunications in India are private SSOs in the Indian ICT sector.The Institute of Electrical and Electronic Engineers and International Telecommunication Union are prominent SSOs in the cellular and Wi-Fi space. Licensing SEP on FRAND terms is a voluntary contract between the SSO and the SEP holder. However, the meaning of FRAND has not been defined by SSOs; it depends upon the nature of the transactions between the SEP holder ("licensor") and the SEP implementer ("licensee"). The first SEP dispute in India was Telefonaktiebolaget Lm Ericsson (Publ) v Mercury Electronics, in which Ericsson filed an infringement suit against Mercury Electronics and Micromax Informatics Ltd, claiming infringement of its eight SEPs used in 2G, 3G and 4G devices. Read here.

Anti-Suit injunctions or ASIs have extended judiciary decisions beyond country borders. courts in the U.S. and UK adjudicating cases involving standards-essential patents and FRAND licensing commitments have increasingly issued injunctions preventing one party from pursuing parallel litigation in another jurisdiction. After all, the notion that ASIs sought by SEP implementers can be acceptable and compliant with patent law has been confirmed by a US court in Microsoft v. Motorola (see the first instance ruling (W.D. Wash. 2012), affirmed on appeal (9th Cir. 2012)).The UK suit was recently decided by the UK Supreme Court, [2020] UKSC 37, which held that a UK court has the authority to set a global FRAND royalty rate between the parties, notwithstanding its lack of jurisdiction over patents outside the UK. Supreme People’s Court (SPC) of China followed with ASIs. Conversant sued Huawei in the District Court in Düsseldorf, Germany, alleging infringement of several European patents. On August 27, 2020, the Düsseldorf court granted Conversant an injunction against Huawei’s sale, use or importation in Germany of devices infringing patent EP1797659 (the German Patent). On the same day, Huawei applied to the SPC seeking an “act preservation” ruling (a judicial action roughly equivalent to an ASI) to prevent Conversant from enforcing the Düsseldorf injunction until the conclusion of the Chinese proceedings.  The SPC granted the ASI after an ex parte hearing in which Conversant did not participate. 

Anti-Anti-Suit Injunction (AASI)  followed ASIs, initially in Germany and France, landed now in India. The dispute between InterDigital, a U.S.-based patent assertion entity, and Xiaomi, a Beijing-based electronics firm, relates to five InterDigital patents covering the 3G and 4G standards.   When negotiations for a license failed, on June 9, 2020 Xiaomi sought a declaration by the Wuhan Intermediate People’s Court of the appropriate FRAND royalty rate for the patents.  On July 29, InterDigital sued Xiaomi for infringement in the Delhi High Court in India, seeking monetary damages and an injunction. In response, on August 4, Xiaomi asked the Wuhan court for an “act preservation” ruling (ASI) preventing InterDigital from enforcing the injunction while the Wuhan proceeding was in progress.Accordingly, on September 23, the Wuhan court (a) ordered InterDigital to withdraw its requests for injunctive relief in India, (b) prohibited InterDigital from seeking injunctive relief in China or any other country with respect to the 3G/4G patents currently at issue in the Wuhan case, and (c) prohibited InterDigital from asking another court in China or any other country to determine a FRAND royalty rate or resolve a FRAND dispute relating to the 3G/4G patents at issue.In response to the entry of the ASI by the Wuhan court, InterDigital disclosed to the U.S. Securities and Exchange Commission (first reported by IAM) that on September 29, it filed for an anti-anti-suit injunction (AASI) in the Delhi High Court to prevent Xiaomi from enforcing its Chinese ASI.   

SEP owners are in USA and Europe ,China has large licensees. Position may change with Chinese firm owning SEPs in future. India has neither SEP owners nor manufacturers needing SEP.

Reference

https://spicyip.com/2020/10/china-enters-the-realm-of-anti-suit-injunctions-in-standard-essential-patent-sep-cases.html

https://conflictoflaws.net/2020/anti-suit-injunction-issued-in-china-comity-pragmatism-and-rule-of-law/

https://patentlyo.com/patent/2020/10/contreras-injunctions-litigation.html?utm_source=dlvr.it&utm_medium=twitter

US court rules on royalty for 2G, 3G, 4G SEPs

The court took a firm stand against royalty stacking. The judgement cited one of the key reasons for using top down analysis is that it prevents royalty stacking. The court also found that the results from the ex-standard approach proposed by Ericsson are highly suggestive of royalty stacking and lack fundamental credibility. The court adopted a maximum aggregate royalty rate based on various public announcements made by SEP owners and industry leaders for the top down calculations.
The court relied on the top down approach for determining a fair and reasonable royalty rate. It said: “A top down model aims to value a portfolio of SEPs by determining a fair and reasonable total aggregate royalty for all patents that are essential to a standard.” “It then apportions that royalty to the SEP owners based on the relative value of their portfolio against the value of all patents essential to the standard.”
Rates under FRAND:
4G- 0.45%
3G- 0.30%
2G-0.16%
(source: IP Pro Patents)

FRAND rates in US Judgement

A US judge has handed down a fair, reasonable and non-discriminatory (FRAND) licence for standard-essential patents (SEPs) in a high-profile quarrel between telecoms company Ericsson and TCL, a China-based smartphone maker.   Royalty rates fixed as under:

A running royalty for End User Terminals Sold beginning January 1, 2018 according to the following schedule:

 For each such product Sold that is compliant with GSM, GPRS, or EDGE (but not compliant with WCDMA, HSPA, and/or 4G), 0.164% of the Net Selling Price if sold in the United States, 0.118% of the Net Selling Price if sold in Europe, and 0.090% of the Net Selling Price if sold anywhere in the world other than the United States or Europe; 

 For each such product Sold that is compliant with WCDMA or HSPA (but not compliant with 4G), 0.300% of the Net Selling Price if sold in the United States, 0.264% of the Net Selling Price if sold in Europe, and 0.224% of the Net Selling Price if sold anywhere in the world other than the United States or Europe;

 For each such product Sold that is compliant with 4G, 0.450% of the Net Selling Price if sold in the United States, and 0.314% of the Net Selling Price if sold anywhere in the world other than the United States. Should TCL purchase TCL End User Terminals from a Third Party claiming to  be licensed or to have pass-through rights under Ericsson Licensed Patents that confer a license covering the End User Terminal, then TCL will receive credit for that pass through license in the royalty rates applied. In particular, with regard to Ericsson Patents that are essential to the WCDMA Standards (“Ericsson WCDMA Licensed Patents”) for the Selling of ASICs, then TCL may have the option of remaining unlicensed by Ericsson under such Ericsson WCDMA Licensed Patents subject to Selling TCL End User Terminals with ASICs that are compliant with the WCDMA Standard. TCL shall then pay a royalty equal to the rate paid for the GSM/GPRS/EDGE and/or LTE Standards as specified in Clause E(3)(a) or Clause E(3)(c) of this Injunction, as applicable, for each such TCL End User Terminal  provided that such TCL End User Terminal is also compliant with any of the GSM/GPRS/EDGE Standards and/or LTE Standards while it is qualified as a WCDMA End User Terminal. For the avoidance of doubt, the Parties acknowledge the doctrine of patent exhaustion. Ericsson confirms that upon the Effective Date it has not provided any licenses with pass-through rights under its 4G patent portfolio to a chipset provider, making, using, importing, selling, or otherwise disposing of 4G compliant chipsets and components. For the avoidance of doubt, TCL shall only be required to pay the highest  prevailing royalty rate under this Injunction for each End User Terminal. For example, the 3G royalty rate for 3G multimode End User Terminal includes the royalty rate also for the 2G part in such End User Terminal.

Source: Judgement

Who owns patents in Mobile Devices in India

The report `PATENTS AND MOBILE DEVICES IN INDIA: AN EMPIRICAL SURVEY by Jorge L. Contreras and Rohini Lakshané' provides useful data. Highlights:

• The report identified a total of 19,569 published Indian patent applications and 4,052 issued Indian patents relating to mobile devices from January 2000 through February 2015. Top eleven holders of patents  are all non-Indian, based in North America, Europe and the Asia-Pacific region.The single technology category with the greatest number of patents was communications (12,857). Of approximately 23,500 total patents identified, a total of only eighteen patent applications and no issued patents were held by three of the Indian firms studied (Spice Digital, HCL and Videocon).
• While absence of patenting activity in India is predicted, what surprised the authors is significant presence of software patents.  3,068 patents covered software-related features such as the operating system, message display, searching, file management and ringtone management. 
• Finally authors refer to a possible solution - One of the authors (Lakshané), together with the Centre for Internet and Society (CIS), have requested that the Indian government establish a patent pool covering critical mobile technologies, and that licenses to such pool be made available to all domestic manufacturers at a fixed royalty rate of 5% of the end product’s net selling price. Read the open letter addressed to Indian PM.

Qualcomm fined $853 million in South Korea over FRAND

Last year China fined Qualcomm  $975 million and now is the turn of South Korea.  As per reports South Korea’s antitrust regulator slapped a record 1.03 trillion won ($853 million) fine on Qualcomm Inc. for violating antitrust laws. 
Charrges:

1. Qualcomm, a holder of standard-essential patents as well as a monopolistic service provider of modem chips from manufacturing to sales, has violated its agreement to license patents on fair reasonable and non-discriminatory terms, known as FRAND.

2.  Qualcomm should make standard-essential patents available for separate licensing rather than bundling them with chipset sales. 

Standard Essential Patents and Monopoly position.

When a patented technology is incorporated in a standard, adoption of the standard eliminates alternative to the patented technology. Ericsson has taken Indian assemblers of smart phones to court for their refusal to pay royalty for SEP (Standard Essential Patents). Phone manufacturers complained of unreasonable demands by the SEP owner both on royalty rate and base unit for enforcing royalty. FRAND terms for SEP are under debate in USA and Europe. IEEE and manufacturers have taken different positions on this.

China is said to have reduced the royalty rates on SEP by bringing in their Competitive commission. Indian manufacturers also approached Competitive Commission of India and as expected SEP owners did not like it and questioned CCI role in patent infringement.

Now Delhi High Court ruled that  that the Competition Commission of India (CCI) can continue its investigation into Ericsson’s alleged anti competitive practices. 

“In my view, there is no irreconcilable repugnancy or conflict between the Competition Act and the Patents Act. And, in absence of any irreconcilable conflict between the two legislations, the jurisdiction of CCI to entertain complaints for abuse of dominance in respect of Patent rights cannot be ousted.”

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More from SpicyIP

Fair Standards Alliance- friend of FRAND

A group of companies which include global firms such as BMW, Cisco, Dell, HP, Intel and Lenovo launched the Fair Standards Alliance this week in Brussels, aimed at ensuring licensing of standard-essential patents is done on fair, reasonable and non-discriminatory (FRAND) terms. The support revision made by IEEE. On the critical issue of Royalty on SEP, they state:
(a) Fair and reasonable royalties for a SEP must not tax features of a product that are unrelated to the patented invention 
Some SEP holders suggest that licensing rates should be based on downstream uses of standardised technology. Licensing polices that seek to charge such rates are unfair – they violate the FRAND commitment because they seek compensation for unpatented technologies or technologies that the patent holder did not invent or create. For example, when a smartphone has an innovative user interface that helps drive consumer demand for that device, the owner of a patent essential to a cellular standard should not be permitted to use that patent to appropriate any portion of the value of the user interface. Instead, in most circumstances, FRAND licensing rates should be determined with reference to the device, or the part of the device, that implements the patented invention; this ensures that the patent holder obtains fair compensation for what it actually invented, and not compensation for the value of others’ work or contributions. In other words, the price of a brick should be independent of whether that brick is used for building a garage or a mansion – and the royalty for a SEP associated with a standard that enables an Internet of Things (IoT) device to be wirelessly connected to other IoT devices (or the cloud) should be independent of whether that first IoT device is a smart watch, a refrigerator or a car. That is why it is so important to not blindly base royalty rates for SEPs on the overall value of an end device that makes use of the SEP’s invention, but to rather carefully consider the actual value that the SEP contributes to that end device. Often, that assessment can greatly be aided by considering the smallest component that actually implements the patented invention. When that part can be isolated as a separately saleable unit (a brick for building various types of buildings), a fair royalty rate will typically bear a relation to the price of that unit. 

ETSI Vs IEEE on Standard Essential Patents (SEP)

IEEE  updated its SEP policy, introduced Smallest Saleable Unit (SSU) policy for determining a reasonable royalty rate in a licensing deal. Patent owners did not like it. Now, Standards-setting organisation the European Telecommunications Standard Institute (ETSI) has said that the Institute of Electrical and Electronics Engineers’ (IEEE) intellectual property rights policy is incompatible with its own.
Different Standard Setting Organisations, ETSI, ITU, IEEE have varying influences on royalty on FRAND  terms. 
Read: Perkins primer

Standard Essential Patents- Huawei Technologies Co. Ltd v ZTE Corp.,

European Court delivered its judgement in this case. Highlights:

Huawei Technologies, which is a multinational company active in the telecommunications sector, is the proprietor of a European patent, which Huawei notified to the European Telecommunications Standards Institute (ETSI) as a patent essential to the ‘Long Term Evolution’ standard. At the time of that notification, Huawei undertook to grant licences to third parties on FRAND terms.

Huawei brought an action for infringement before the Landgericht Düsseldorf (Regional Court, Düsseldorf, Germany) against two companies belonging to the multinational group ZTE. That group markets products in Germany that operate on the basis of the ‘Long Term Evolution’ standard and thus use Huawei’s patent without, however, paying Huawei a royalty. By its action, Huawei is seeking an injunction prohibiting that infringement, the recall of products, the rendering of accounts and an award of damages.

The Court holds that the proprietor of a patent essential to a standard established by a standardisation body, which has given an irrevocable undertaking to that body to grant a licence to third parties on FRAND terms, does not abuse its dominant position by bringing an action for infringement seeking an injunction prohibiting the infringement of its patent or seeking the recall of products for the manufacture of which that patent has been used, as long as:

‒ prior to bringing that action, the proprietor has, first, alerted the alleged infringer of the infringement complained about by designating the patent in question and specifying the way in which it has been infringed, and, secondly, presented to that infringer, after the alleged infringer has expressed its willingness to conclude a licensing agreement on FRAND terms, a specific, written offer for a licence on such terms, specifying, in particular, the royalty and the way in which it is to be calculated, and

‒ where the alleged infringer continues to use the patent in question, the alleged infringer has not diligently responded to that offer, in accordance with recognised commercial practices in the field and in good faith, this being a matter which must be established on the basis of objective factors and which implies, in particular, that there are no delaying tactics.

The Court has held, inter alia, that the alleged infringer which has not accepted the offer made by the proprietor of the SEP may invoke the abusive nature of an action for a prohibitory injunction or for the recall of products only if it has submitted to the proprietor of the SEP, promptly and in writing, a specific counter-offer that corresponds to FRAND terms.

FRAND in India: India Judiciary and Competitive Commission of India differ

Debate on FRAND terms for SEP (Standard Essential Patents) is hotting up. Two important articles published today:
First from India by Vinod Dhall in Financial express ` Standard-setting, a reason for foreclosing competition?
Second "FRAND in India: The Delhi High Court's emerging jurisprudence on royalties for standard-essential patents" by J. Gregory Sidak (Criterion Economics), has been published online by the Journal of Intellectual Property Law & Practice (2015).

From interim orders it appears Delhi High court considered Royalty on final products as a better norm whereas CCI consider it as a bitter norm and favour royalty on chip sets.

Watch out as this decision will be critical to Innovate-In-India and/or Make-In-india.

China imposes $975 million fine against Qualcomm and caps royalty rates at 3.5 percent (4G) and 5 percent (3G).

As per reports, China's National Development and Reform Commission ("NDRC") published its decision in theQualcomm case, which resulted in a $975 million fine against Qualcomm for alleged violations of the Anti-Monopoly Law. The decision provides useful guidance with respect to the NDRC's views regarding several intellectual property licensing practices involving standard-essential patents ("SEPs").

Qualcomm charged excessive royalties. 

• First, Qualcomm engaged in portfolio licensing that included expired patents in the portfolio. In doing so, Qualcomm did not provide licensees with lists of patents covered by the licenses, and did not demonstrate that newly added patents were of the same value as patents that were expiring. Even if that were true, the NDRC said that it was unreasonable not to provide licensees with a list of patents when Qualcomm offered long-term or even non-fixed term licenses. 
• Second, Qualcomm required some licensees to provide royalty-free grantback licenses for relevant wireless communications patents that are not SEPs. The NDRC determined that this practice is not reasonable, and that Qualcomm should take into account the value of grantback licenses when negotiating licensing terms. Third, Qualcomm required licensees to pay royalties based on the price of the finished product, which the NDRC concluded misappropriated value based on unpatented components.  
• Finally, Qualcomm included in its license portfolio non-SEPs that some licensees did not want to license. The NDRC also noted that the practice of requiring royalty-free grantbacks could discourage licensees from technical innovation and have the effect of restricting or eliminating market competition.

Qualcomm unreasonably bundled the sale of non-SEPs with SEPs as a package at a constant licensing rate. 

The NDRC rejected Qualcomm's three reasons for bundling non-SEPs with SEPs: 

(1) it offered to license SEPs separately but licensees prefer the package of non-SEPs and SEPs; 

(2) it is difficult to differentiate non-SEPs from SEPs so licensees are at risk if they license only SEPs; and 

(3) bundling non-SEPs with SEPs does not restrict competition and licensees are free to license a competing technology. 

The NDRC did not accept these explanations, finding that some licensees were not offered a license to SEPs only; non-SEPs and SEPs can be differentiated on a patent list; and bundling non-SEPs with SEPs restricted competition in the market for non-SEPs, hampered innovation, and harmed consumers.

Qualcomm imposed a "no-challenge" requirement on the sale of baseband chips. 

The NDRC objected to Qualcomm's practice of requiring purchasers of base band chips to enter into an agreement that provided that the purchaser would not challenge the license agreement. It found that given the nature of the issues it identified in Qualcomm's license agreements, it was improper for Qualcomm to require licensees to waive their right to challenge the agreements.

The NDRC's decision orders Qualcomm to cease engaging in the identified practices:  (1) Qualcomm must provide patent lists, and it cannot require royalties for expired patents; (2) it cannot require grant backs without consideration; 

(3) it must cap royalty rates at 3.5 percent (4G) and 5 percent (3G), and apply those royalty rates to modified royalty base representing 65 percent of the net sales price of the overall terminal unit; 

(4) it cannot bundle non-SEPs without reasonable cause; 

(5) it cannot require acceptance of royalties for expired patents, grantbacks without consideration, bundling non-SEPs without reasonable cause, or "no-challenge" clauses as conditions for supplying base band chips. 

In addition, the NDRC imposed a fine equal to 8% of Qualcomm's revenue within China for 2013, which was 76.102 billion yuan, resulting in a fine of 6.088 billion yuan (US$975 million).

The NDRC's decision is available here.

IEEE amends it Patent (FRAND) Policy endorsing royalty payment on chip and not on the product.

Readers are familiar with court cases concerning royalty payments on essential patents for standards. Licensors like Qualcomm, Ericsson demand royalty of final product (mobile phone) whereas Indian Licensee feel royalty should be on the chip and not on the mobile or other form of finished products incorporating the chip. On February 8th the standard setting organisation IEEE voted to change patent policy and these changes largely relate to the commitment of IEEE members to license patents to users of IEEE standards on terms that are “fair, reasonable and nondiscriminatory” (FRAND). 
The contentious part says:

“Reasonable Rate” shall mean appropriate compensation to the patent holder for the practice of an Essential Patent Claim excluding the value, if any, resulting from the inclusion of that Essential Patent Claim’s technology in the IEEE Standard. In addition, determination of such Reasonable Rates should include, but need not be limited to, the consideration of:

• The value that the functionality of the claimed invention or inventive feature within the Essential Patent Claim contributes to the value of the relevant functionality of the smallest saleable Compliant Implementation that practices the Essential Patent Claim.
• The value that the Essential Patent Claim contributes to the smallest saleable Compliant Implementation that practices that claim, in light of the value contributed by all Essential Patent Claims for the same IEEE Standard practiced in that Compliant Implementation.
• Existing licenses covering use of the Essential Patent Claim, where such licenses were not obtained under the explicit or implicit threat of a Prohibitive Order, and where the circumstances and resulting licenses are otherwise sufficiently comparable to the circumstances of the contemplated license.

The vigorous pubic debate over the IEEE amendments highlights a rift in the standardization world between Patent Centric and Product Centric firms.  The business models that these firms have adopted are different, yet they have co-existed for decades.  Some have predicted that important contributors will leave IEEE as a result of the recent amendments. 

Qualcomm argument; 

Defining a “reasonable” royalty using controversial and unworkable valuation methodologies—including tying a royalty rate to the “smallest saleable component” of a standard-compliant device—all of which are intended to minimize licensing fees for SEPs.

Indian perspective

 IEEE endorsed a calculation based on the value of the chip inside the device, even if many other aspects of the device benefit from or use the contributed technology. This benefits local assembly of mobile phones and most other network based products and can enable Make-In-India.