Bundling of RAND-Committed Patents

We assess the implications of the literatures on bundling and tying and on patent bundling in particular for whether a company that makes a RAND (reasonable and non-discriminatory) commitment on a patent may license that patent only in a bundle with patents on which it has not made a RAND-commitment. Patent bundling/tying is a common practice that often has sound efficiency justifications, but forcing a licensee to accept a license on a patent it does not want to obtain a RAND-committed patent that it does want can be a way of circumventing the RAND-commitment. Mixed bundling, where the licensor offers licensees the option of taking a license to RAND-committed patents only or taking a license to the full portfolio, is the most straightforward solution. However, we argue that a licensor can nonetheless offer a RAND-committed patent only in a bundle with patents on which it has not made a RAND-commitment, provided that the royalty would be RAND for the RAND-committed patents alone. The patent owner cannot deduct the value of non-RAND-committed patents from the license fee from the bundle and argue that it has honored its RAND-commitment as long as the difference is RAND for the RAND-committed patents.