What is a RAND license (RAND terms)?

Reasonable and non-discriminatory (RAND) terms, also known as fair, reasonable, and non-discriminatory (FRAND) terms, is a voluntary agreement between a standard-setting organization and the holder of standard-essential patents.

Reasonable in this context refers to the fee, or rate, that can be charged by a patent holder. A reasonable rate will foster adoption of the standard, not allow a patent holder to extract large royalties simply because a patent is standards-essential, take into account royalty “stacking” (the end product using patent may be subject to multiple patent licenses) and adequately compensate the holder of the patent.

Non-discriminatory primarily refers to making a patent available to license to all prospective licensees on similar terms, even if the potential licensee is a direct competitor. This creates a level competitive playing field, ensures that new entrants to the market can join on the same basis as existing competitors, and fosters the adoption of the standard.