SEP and FRAND Licensing Checklist: A Practical Checklist

Document type: Checklist Practice area: Intellectual Property — Patents Jurisdiction: United States, with international context Last reviewed: 5 September 2026

Part 1 — Implementer: before any demand

Exposure mapping:

Which standards do our products implement? Cellular, Wi-Fi, video codecs, Bluetooth, NFC, positioning, audio.
Which releases or versions of each.
At what level — do we implement, or does a purchased component?
Which products, in what volumes, at what average selling prices.
Which standard features are mandatory versus optional, and which optional features do we actually use?
What have we already paid — existing SEP licenses, pool licenses, royalties embedded in component prices.

Supply chain:

For each standardized function, identify the component and the supplier.
Ask each supplier in writing whether it is licensed, by whom, and for what scope.
Obtain the license terms where possible.
Analyze exhaustion: does the license cover these products, this field, and downstream use?
Read every supply agreement's IP indemnity, and specifically the standards-essential patent carve-out.
Confirm the notice and tender obligations under any indemnity that does apply.

Governance:

Model SEP royalties as a cost of implementing the standard.
Name an owner who holds the relationship and maintains the exposure map.
Establish a response protocol for incoming demands.
Identify SEP counsel before you need them.

Part 2 — Implementer: the first three weeks

The response must contain:

A statement of willingness to take a license on FRAND terms. In terms.
A request for claim charts mapped to specific standard sections.
A request for the essentiality basis — which sections, mandatory or optional.
A request for the rate basis and any comparable licenses relied on.
An offer to enter a confidentiality agreement, with a draft attached.
A question about the licensing level and whether our suppliers are licensed.
A named contact and a proposed engagement schedule.

The response must not contain:

A general denial without analysis.
A refusal to discuss until every patent is proven infringed.
A demand that the patent holder sue.
Silence.

Part 3 — Implementer: essentiality and valuation

Essentiality:

Map each charted claim element by element to the specific standard section cited.
For each section: mandatory or optional? Do we implement it?
Does the claim require more than the standard requires?
Assess validity for patents surviving the essentiality screen.
Extrapolate to the portfolio — the charted patents are presumably the holder's best.
Document the analysis; it supports both the counter-offer and the top-down denominator.
Budget four to six months and a six-figure spend for a substantial portfolio.

Comparable licenses:

Identify publicly reported licenses to this or comparable portfolios.
Obtain the holder's licenses under the confidentiality agreement.
Normalize each: scope, field, term, geography, cash versus cross-license, lump-sum versus running, litigation context.
Identify similarly situated licensees and any rate differences — the non-discrimination argument.

Top-down:

Establish the aggregate royalty burden for the standard, with sources.
Build the denominator from an essentiality-adjusted count, not declared counts.
Build the numerator on the same methodology.
Compute the share; adjust for relative technical importance with a stated basis.

Apportionment:

Identify the smallest salable patent-practicing unit and its price.
Be prepared to express the same number at either base with an equivalent rate.
Reconcile the two methodologies — a counter-offer supported by both is far stronger.

Part 4 — Implementer: the counter-offer and security

In writing, with a specific rate and structure.
Methodology stated; analysis attached or summarized.
Addresses the holder's rate basis directly.
Proposes term, scope, and geography.
Delivered promptly after receiving the requested information.
Not zero and not nominal without justification.

Security:

Escrow, letter of credit, or bond in the amount of your own offer for the disputed period.
Notify the patent holder in writing.
Render an account of past use where the framework requires it.
Recognize this is the strongest available evidence of good faith and the most effective defense against an exclusion order.

Part 5 — Patent holder: preparation

Do your own essentiality analysis before asserting.
Select representative patents across the portfolio and chart them element by element.
Confirm each mapped section is mandatory.
Confirm the claim does not require more than the standard.
Assess validity honestly.
Estimate the genuinely essential proportion — you will be asked.

Rate basis:

Assemble and normalize your comparable licenses.
Prepare a top-down cross-check.
State the apportionment reasoning explicitly.
Audit your license history for discrimination exposure — different rates to similarly situated licensees is discoverable and unanswerable later.

Licensing level:

Device or component, consistent with your existing licenses.
Determine whether the target's suppliers are already licensed and what that does to the claim.

Part 6 — Patent holder: notice and negotiation

The first letter must contain:

The standard, the release, and specific patents.
Claim charts for representative patents.
The essentiality basis.
A specific rate and the basis for it.
An offer of a confidentiality agreement, with a draft.
A proposed engagement schedule and a contact with authority.

Through the negotiation:

Respond to counter-offers substantively and promptly.
Enter the confidentiality agreement without unreasonable conditions.
Explain why the implementer's methodology is wrong, with analysis.
Move when the implementer moves.
Document every exchange.
Do not seek an injunction against a demonstrably willing licensee — it rarely works after eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006) and it creates antitrust exposure under 15 U.S.C. § 2.

Part 7 — Forum selection and the multi-jurisdictional race

For each candidate jurisdiction:

What relief is available — injunction, damages, rate determination, exclusion order?
How fast?
What framework applies for assessing willingness?
Will the court set global terms, and would refusing a global determination be held against us?
Anti-suit exposure — could filing here draw an injunction elsewhere, and could we obtain one?
Where are the products sold and manufactured — where would an injunction actually bite?

Sequencing:

Recognize that filing first frequently determines the framework.
Model the full escalation sequence — injunction action, rate action, anti-suit, anti-anti-suit — before filing anywhere.
Engage counsel in each candidate jurisdiction in advance; anti-suit practice moves in days.
Assign one person accountable for cross-jurisdictional consistency; everything filed anywhere is an exhibit everywhere.

Part 8 — Rate-setting litigation

Evidence:

Full license portfolio obtained in discovery.
Each license normalized, with the comparable subset identified and exclusions explained.
Discrimination analysis for similarly situated licensees.
Top-down: aggregate burden with sources; essentiality-adjusted denominator with methodology and sample; numerator on the same basis; relative value adjustment with a stated basis.
Apportionment: the smallest salable patent-practicing unit and its price; the entire market value rule addressed if a device base is used.

Experts:

A technical expert on essentiality — a distinct skill from ordinary infringement work.
An economist on the rate, the base, and stacking.
A licensing expert on industry practice and how comparables should be read.
Confirm all three are consistent with each other and with positions in other forums.

Part 9 — The ITC

Recognize the statutory schedule; the Commission does not stay for a parallel case or an IPR.
Recognize the remedy is an exclusion order, not damages, and the standard is public interest, not eBay.
Prepare the public interest submission addressing public health and welfare, competitive conditions, production of like articles, and consumers.
Build the submission from the willingness record: the response date, the confidentiality agreement offered, the essentiality analysis performed, the counter-offer, and the security.
Assess a domestic industry challenge, including the requirements for a licensing-based domestic industry.
Plan for the Presidential review period and any bond during it.

Part 10 — Patent pools

Is there a pool for this standard?
Check the contributor list — a pool license covers only contributors, and assuming otherwise is the most common misunderstanding.
Is the published rate reasonable relative to your own analysis?
For an implementer: take the pool license where one fits. It is cheaper than bilateral negotiation, it benchmarks the rate, and it is evidence of willingness.
Use the pool rate as a comparable in bilateral negotiations with non-contributors.
For a patent holder: assess whether joining trades an acceptable per-patent rate for lower transaction costs and higher collection.
Confirm the pool's structure is defensible: essential patents only, independent evaluation, non-exclusive licensing, no downstream coordination, limited grantbacks.

Part 11 — License scope terms

Rate and structure:

Per-unit, ad valorem, or lump sum; the base stated explicitly; tiering; caps and floors; currency and timing.

Scope:

Which patents — asserted, all SEPs for the standard, all SEPs, or the whole portfolio.
Which standards and future releases.
Which products, defined by category so the license survives product changes.
Geography — global is usually what both sides need.
Have-made rights and contract manufacturer coverage.
Affiliate coverage and what happens on acquisition.
Downstream coverage and exhaustion for customers.

Term and release:

Term and what happens at expiry.
Release for past sales, with the period stated.
Covenant not to sue on unlicensed patents for the same functionality.

Licensee protections:

Most-favored-licensee, with the comparison methodology defined.
Adjustment if the portfolio shrinks materially.
Transferee obligations — a buyer of the patents takes subject to the license.
Reasonable audit scope and frequency.
Confidentiality with carve-outs for auditors and litigation.

Licensor protections:

Reporting and audit rights; late payment interest; termination for material breach with cure; treatment of validity challenges.

Dispute resolution:

Arbitration of rate adjustments and audit disputes; governing law, noting the SSO policy's own choice of law.

Part 12 — Arbitration

Consider proposing it from either side — a refusal is increasingly offered as evidence of unwillingness, and the proposal costs nothing.

If agreed, settle:

Scope: patents, standards, geography.
Methodology: comparables, top-down, or both; the base; apportionment.
Whether essentiality is determined or assumed.
Arbitrator qualifications.
Binding and non-appealable?
Interim measures: no injunctions during the arbitration; security during it.
Confidentiality and what may be disclosed to other licensees.

Part 13 — If you are the component supplier

Decide whether to seek a license at all, and price the decision.
If seeking one, request downstream coverage expressly — customers care about exhaustion.
Price the indemnity you give. Cap it, exclude standards-essential patents, or build it into the component price. An unqualified SEP indemnity is an open-ended obligation measured by a base you do not control.
Coordinate with customers before responding to any demand.
Maintain records of exactly which standard sections, optional features, and releases you implement.
Recognize that the licensing level question is unsettled across jurisdictions and take a considered position.