A NAASTy Alternative to RAND Pricing Commitments

Marc Rysman, Boston University, Department of Economics, and Tim Simcoe, University of Toronto, Rotman School of Management

3/02/2008
(Original Publish Date: 6/30/2007)

Voluntary standard setting organizations (SSOs) typically require participants to disclose their patents during the standard-setting process, and will only endorse a standard 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 inherently ambiguous and thus extremely hard to adjudicate. As an alternative, we propose a policy of Non-Assertion After Specified Time, or NAAST pricing. Under our proposal, technology producers would be compensated, vendors would have access to standards and uncertainty due to litigation would be largely eliminated.