WITHOUT technical standards, life would be a lot more complicated. They make it possible, for example, for computers of all sorts to connect to the internet via Wi-Fi in homes, offices and coffee shops, and for mobile phones of different makes on different networks to communicate with one another.

A standard often relies on intellectual property created by many different companies. Disputes over what this intellectual property is worth have been surprisingly rare. Usually, companies agree to license their “standard-essential patents” (SEPs) on “reasonable and non-discriminatory”, or RAND, terms. If they didn’t, then standard-compliant products would be much more expensive—too expensive, perhaps, for anyone to make or buy.

But as patent wars have raged across the information-technology industry in the past few years, disputes about what RAND means have become more frequent—and much more likely to reach a court. Until last month, though, no court had had to calculate a RAND rate. As the Free exchange column in this week’s print edition explains, James Robart, an American judge, has now done just that, by imagining what the outcome might be if the two sides sat down and negotiated in good faith. The judge calculated that the SEPs at issue were worth much less than their owner, Motorola Mobility (now owned by Google) had claimed: a matter of a few cents per unit rather than, in effect, several dollars. But the result was less important than the method:

Suppose, he said, that the two sides negotiated in good faith: what might the result be? As a guide, he took a judgment in a patent-infringement case from 1970, Georgia-Pacific v United States Plywood. This sets out 15 factors that might be used to calculate reasonable royalties (they have been applied in several disputes, but not until now to SEPs). The list includes royalties already being paid for the patent at issue and for similar patents; the holder’s normal licensing policy; and the technology’s value to those using it, including licensees. To fit the Georgia-Pacific factors to SEPs, Judge Robart made several amendments to the list. His hypothetical negotiators would not simply look at Motorola’s patents in isolation. They would consider RAND royalties already being paid for other SEPs, thus limiting the risk of royalty-stacking. And a reasonable royalty would not be inflated by the existence of the standard. Microsoft should pay only the value of what Motorola had contributed. This limits the risk of hold-up.

Judge Robart’s full reasoning runs to 207 pages­—far too long to summarise adequately in a column or a blog post. But here’s just one point there wasn’t room for on the printed page. Motorola had demanded that Microsoft, its opponent in court, pay a percentage (2.25%) of the final price of any product that relied on its SEPs (for example, an Xbox games console). It was thus claiming a higher royalty for more expensive products—and, Microsoft complained, a share of whatever value the software company added. Surely, said Microsoft, that can’t be right. By proposing a RAND rate measured in cents and not a percentage, the judge agreed.