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Nortel and Practice Questions
“A statement to ETSI is not […] an allegation of essentiality however somewhat a commitment to make licenses accessible to the declared patents on FRAND terms and stipulations.”
A worrying trend has currently emerged whereby an alleged lack of transparency linked to the ecu Telecommunications standards Institute (ETSI) highbrow property rights database (IPR Database) is being used in support of antitrust allegations and to suggest radical adjustments to the reasonable, good value and non-discriminatory (FRAND) licensing framework for 3G, 4G and 5G instant know-how. however is there in reality this type of transparency difficulty or is that this yet an extra attempt to tilt stability of vigour in desire of implementers and excuse hold-out?
The role of ETSI’s IPR policy and IPR Database
before delving into these contemporary tendencies, believe first what ETSI supposed to achieve with its highbrow property rights policy (IPR coverage) and IPR Database. ETSI’s primary difficulty became ensuring that FRAND licenses could be accessible to implementers for any patents fundamental to training a common, such as the necessities developed during the 3GPP for 3G, 4G and 5G wireless communications. ETSI done this aim through its IPR coverage which become designed to establish doubtlessly essential patents in order that licensing commitments may be secured. These licensing commitments are then uploaded to ETSI’s IPR Database to facilitate implementers understanding if any patent delivered to their attention is accessible for FRAND licensing.
The IPR Database does not, although, point out if a license is required for any given patent. this is to say, ETSI’s IPR Database isn't, and changed into no longer meant to be, a real time, up so far repository of most effective fundamental, legitimate and unexpired patents essential to practice the requirements. See, for example, the “Disclaimer” on ETSI’s IPR Database (emphasis brought):
NO REPRESENTATIONS AND/OR WARRANTIES (whether categorical OR IMPLIED) ARE MADE via THE ETSI SECRETARIAT concerning ANY OF THE highbrow PROPERTY RIGHTS CONTAINED within the current IPR online DATABASE, including but no longer restricted TO THE ACCURACY, COMPLETENESS, VALIDITY, APPLICABILITY OR RELEVANCE OF THE information OR whether OR now not SUCH RIGHTS ARE primary AS PER THE DEFINITION OF THE ETSI IPR policy.
also noteworthy is that ETSI’s IPR coverage encourages so known as “over declaration” by using searching for disclosure of patents that “might be basic”, given it is in ETSI’s activity that extra patents be discipline to FRAND licensing commitments than less. further, ETSI encourages disclosure of probably elementary patents early in the standardization process which complicates essentiality determinations given the specifications text and patents claims are often in flux at that point.
Lenovo v. InterDigital
notwithstanding the aims underlying ETSI’s IPR policy and IPR Database Lenovo asserts, in a lately filed criticism, that InterDigital Communications (IDC) has engaged in anticompetitive habits, and breached its dedication to ETSI for, amongst other reasons, overstuffing the ETSI Database (emphasis introduced):
IDC compounded the misleading nature of its IPR Declarations by means of declaring lots of its patents as fundamental to the mobile specifications without regard to whether these patents are actually—or moderately might also develop into—simple, thereby creating a thicket of alleged SEPs meant to carry the charges and complexity, as a practical rely, for expertise licensees to investigate absolutely these claims of essentiality. In doing so, IDC tilts negotiations improperly in its favor through a large and disproportionate imposition of transaction prices upon implementers of the mobile specifications that are seeking to license mobile SEPs on FRAND terms.
A statement to ETSI isn't, besides the fact that children, an allegation or confirmation of essentiality but rather a commitment to make licenses attainable to the declared patents on FRAND terms and prerequisites to the extent they are or become, and stay, fundamental.
Lenovo’s criticism tacitly acknowledges that now not all patents for which licensing commitments were made are basic by means of noting InterDigital’s place concerning its share of patents “likely to be fundamental”:
IDC claims to dangle a portfolio of over 34,000 patents and patent applications worldwide. as a result of its manipulation of the usual-environment manner, its misleading FRAND commitments, and its over-announcement of patents to ETSI, IDC claims that lots of its patents are essential to the mobile standards, even though it is careful no longer to establish all such patents with particularity. as a substitute, IDC purports to control 7-10% of the patents “probably” to be standard to the 3G UMTS typical and well-nigh 10% of the patents “probably” to be essential to the 4G LTE normal.
For if InterDigital is announcing it controls 7-10% of the patents which are prone to be elementary based on studies through third-celebration analysts, that goes to be a long way less than the entire number of InterDigital patents within the ETSI Database in accordance with common prices of “over announcement” (which is a misnomer given the aforementioned purpose of ETSI’s IPR policy and IPR Database). additional, Lenovo’s acknowledgement of such third-birthday celebration studies inspecting essentiality undermines its position that reviewing ETSI’s IPR Database is vital to check relative shares of SEP possession.
apparently, and giving very little credit to the intelligence of arbitrators, Lenovo raises another straw man saying that “…IDC’s efforts to coerce Plaintiffs into arbitration is only an additional potential in which is seeks to take advantage of secrecy and its inflated counts of declared SEPs to extract non-FRAND royalties…”. however even though one were to anticipate, arguendo, that IDC would try to equate the variety of patents for which declarations were submitted to ETSI to its share of doubtless SEPs, which it doesn’t seem like doing, that façade would cease to be positive the second Lenovo cited that inclusion in ETSI’s IPR Database doesn't mean the patents are, really, basic.
notwithstanding simplest outlined once in its criticism, Lenovo frames such issues as being a rely of “transparency”, despite that term not having an permitted legal which means or knowing in the business:
Transparency in licensing of SEPs would, in contrast, allow prospective licensees to verify extra without problems the cost of IDC’s portfolio, as well as expose IDC’s non-compliance with its FRAND commitments and its sample and apply of violating its FRAND licensing responsibilities.
however is this definitely a depend of transparency given InterDigital’s patents, the licensing declarations submitted to ETSI (which support narrow down these InterDigital patents that should be would becould very well be fundamental), the standards, and prior artwork are all publicly accessible? With recognize to the licensing declarations, observe that not like the condition with ETSI, where patent numbers and necessities part numbers are offered, “blanket” declarations are standard within the IEEE and ITU, with patent house owners merely declaring that, to the extent they have any patents that could be primary, they are prepared to license on RAND or FRAND as the case may well be.
to use Lenovo’s own phrases, this sounds extra like a controversy of who should still endure the “transaction charges” of deciding on which patents deserve to be licensed and what the appropriate FRAND fees may still be. but what is incorrect with Lenovo having to do its own evaluation and taking its chances on situation of non-compliance with FRAND in court docket if not agreeing with InterDitigtal’s assessment, as compared to making InterDigital display its hand in pre-litigation negotiations without any commitment from Lenovo to acquire FRAND licenses? Taking Lenovo’s proposed approach to the logical next step, is InterDigital also responsible for analyzing third celebration patents given assessing its compliance with FRAND requires consideration of the total universe of primary patents?
The ‘SEPs skilled neighborhood’
An “knowledgeable community” installation by using the european fee “to deliver the fee with economic, prison and technical expertise and to help the fee to inform coverage measures that it will possibly take to make sure a balanced framework for easy, efficient and valuable licensing of SEPs”, additionally noted considerations with transparency in its January “Contribution to the talk on SEPs” (“Contribution”). particularly, the Contribution states that “there is a scarcity of transparency as to the possession and variety of true SEPs protecting an adopted commonplace, which makes it complicated for implementers to investigate what SEP licences they want for his or her commonplace-compliant items or services” and, in line with the consultants, “presenting more desirable transparency on the SEP landscape may be advisable to both SEP holders and implementers because it might also facilitate smoother SEP licensing negotiations and in the reduction of SEP litigation” (emphasis introduced). The Contribution notes, besides the fact that children, that “there's at the moment no clear facts” of a lack of transparency expanding licensing transaction fees and making FRAND licensing less efficient.
the place the experts really go off the rails is with admire to ETSI’s IPR Database. as an example, the Contribution notes that while ETSI’s declarations are extra distinct than these used through different general construction agencies, they “don't seem to be continually up-to-date to mirror adjustments within the SEP landscape” to replicate that “[p]atent applications can be rejected, patents may well be invalidated or expire or lose their essential personality, as requirements are permitted, supplemented or amended…” a bit enormously, the consultants make this observation regardless of acknowledging the purpose of the assertion process changed into “to make sure that all patents which are or might develop into simple to a common are available for licensing…” and that such declarations were “not meant to facilitate SEP licensing…”.
although the shortcoming of proof involving the impacts of transparency issues, and the purpose at the back of ETSI’s IPR coverage and IPR Database, the Contribution goes on to make a few proposals the significant majority of which vicinity extra burdens and tasks on patent owners. as an example, the Contribution proposes requiring patent owners to obtain third birthday celebration essentiality assessments, to publish additional info to ETSI (e.g. the effects of essentiality assessments), to update assistance offered to ETSI, to speed up prosecution for declared patents, and to habits prior art searches amongst other issues. surroundings aside the myriad problems such proposals would create, many of which can be touched on in the Contribution itself, the largest difficulty is the underlying and unsupported assumption that the FRAND licensing regime is meant to deliver implementers with full transparency, without any duty to reciprocate.
The huge Imbalance
concerning whom, as between patent owners and implementers, should shoulder the burden of assessing the essentiality and value of standards related patents (i.e. “the transaction expenses”), trust the incontrovertible fact that patent house owners have already made enormous investments into innovating and patenting those innovations, whereas implementer had been free to commercialize, and profit from, the technology with none obligation to enter into FRAND licenses.
also, price questioning is the excellent nature of the narrative that gigantic implementers by some means are dropping sleep over not being in a position to identify all the patents they want they could license but can't, as a result of the state of ETSI’s IPR Database. consider, for instance, that many tech organizations have an implicit (if now not specific) inner coverage fighting their employees from looking at, or commenting on, third-party patents with a view to in the reduction of the chance of willful infringement. greater practical is the view of the european “knowledgeable neighborhood”, that patent house owners customarily ought to make the first stream:
the lack of detail in a huge of majority of SDO declarations makes it problematic if not unimaginable for an implementer the usage of the standard to confirm the scope of licenses mandatory to avoid infringing applicable SEPs. in its place, implementers must do their due diligence on these questions regarding the potentially significant SEPs portfolios for my part, youngsters SEP holders are facing the identical questions. as a result, many implementers may also choose now not to proactively examine the rely and somewhat wait for SEP holders to notify them about their SEP portfolio and supply a note of infringement.
So, with the possible exception of industry giants like InterDigital, who can greater heavily depend on their licensing heritage, sheer portfolio size, and third-birthday celebration essentiality analyses to support their positions without settling on specific patents, implementers are smartly aware about those patents mentioned in ETSI’s IPR Database that are believed to be essential, particularly those they're being approached to license.
finally, accept as true with the guidelines of civil system in discovery jurisdictions as an analog which additionally searching for to boost transparency. Two remarkable distinctions from what's being proposed through the ecu “knowledgeable community” for FRAND licensing are: (1) the duty to reveal valuable information is reciprocal; and (2) a outcome is assured. To the extent any initiatives are undertaken to boost transparency, fairness dictates that those responsibilities should be reciprocal and designed to facilitate achieving FRAND licenses in consequence.
image source: Deposit PhotosAuthor: iqonceptImage identification: 39072457
Curtis Dodd is Chief intellectual Property Officer (CIPO) at Harfang IP. he's a veteran of patent monetization, enforcement and portfolio administration in the telecommunications and consumer electronics space with approximately twenty years of industry adventure. Amongst different roles, Mr. Dodd was counsel for Nortel Networks and lead the management of its 4G wireless portfolio (twice being named as an inventor). This portfolio bought to a consortium led through Apple and Ericsson in a multi-billion-dollar transaction in 2011. Mr. Dodd also labored for Wi-LAN as vp, Patents and tips, all over which period Wi-LAN generated tons of of tens of millions of dollars in licensing revenue from its core US Wi-Fi and CDMA patents and significantly grew its instant portfolio via acquisition. In 2011, Mr. Dodd joined Acacia and, as a Senior vp and Licensing govt, helped Acacia and its companions, including key trade avid gamers Nokia and Samsung, generate giant licensing income, and helped Acacia enormously raise its wireless place via a couple of colossal acquisitions. Most these days, as a Senior Licensing specialist for Fitch Even, Mr. Dodd assisted Longhorn IP in efficiently monetizing 3G and 4G LTE standards fundamental patents previously owned by means of ZTE and ASUSTeK.
For extra counsel or to contact Mr. Dodd, please visit his enterprise Profile page.
Chris Dubuc is the Founder and President of Harfang IP. He in the past headquartered Longhorn IP, an rising chief on the earth of patent licensing. in advance of Longhorn IP, Mr. Dubuc changed into Senior vice president at Acacia research neighborhood. previous to that, Mr. Dubuc become vice chairman of Licensing technologies at WiLAN. prior to now, Mr. Dubuc held various positions in engineering, income and product management with several groups developing and advertising and marketing items in the enviornment of wireless applied sciences, together with Nortel Networks, GE Fanuc and the Communications research core. Mr. Dubuc holds a couple of patents involving wireless know-how and has published assorted papers and articles in the enviornment of wireless expertise. Mr. Dubuc is a Senior Member of the IEEE and has been recognized as probably the most World’s 300 leading IP Strategist via intellectual Asset management journal (IAM). Mr. Dubuc holds a M.Eng. in techniques and laptop Engineering from Carleton tuition and an MBA from the college of Ottawa.
For more counsel or to contact Mr. Dubuc, please discuss with his firm Profile web page.
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