Posts Tagged: "standard essential patents"

With respect to patents subject to a commitment to license on a Fair Reasonable and Non-Discriminatory (FRAND) or Reasonable and Non-Discriminatory (RAND) basis, 2023 saw many interesting developments. This includes several new pool-based licensing programs being launched, and others gaining traction, various interlocutory decisions, the dismissal of some antitrust suits, and, as always, the specter of possible government intervention.

Following a panel that examined the international landscape for standard essential patents (SEPs), IPWatchdog’s Founder and CEO, Gene Quinn, and Chief Operating Officer, Renee Quinn, presented The Honorable Randall Rader with the IPWatchdog Masters™ Hall of Fame award and a sketched portrait to add to the Wall of Fame at IPWatchdog’s headquarters. Judge Rader served as a circuit judge on the U.S. Court of Appeals for the Federal Circuit from 1990 through 2010, and as the court’s Chief Judge from 2010-2014. He has won numerous awards and now works an arbitrator, mediator and consultant with the Rader Group. In his explanation of the origins of the IPWatchdog Masters™ Hall of Fame in 2022, Quinn said he wanted an IP Hall of Fame that included only “real IP professionals; people who mean something to me, people I want you to hear from.”

On  April 27, 2023, the European Commission published its proposal for how the licensing of standard essential patents (SEPs) should be governed in the EU. The draft regulation states that the initiative aims to incentivize participation by European firms in the standard development process and the broad implementation of such standardized technologies, particularly in IoT industries. The developments are of interest to any business that develops, implements or markets connective technologies.

Yesterday, the United States Patent and Trademark Office (USPTO) held a “public listening session” to hear from industry leaders on the topic of standard essential patents. The event was specifically related to the USPTO’s effort to obtain stakeholder input on questions regarding proposed international standards that were presented in a recent Federal Register Notice, as well as strategies identified in the White House’s National Standards Strategy for Critical and Emerging Technologies.

A recent decision out of the Eastern District of Texas granted the plaintiff patent owner summary judgment with respect to the defendants’ counterclaim that the plaintiff breached licensing related obligations owed to the Institute of Electrical and Electronics Engineers (IEEE) by not communicating with the defendants prior to suing for infringement…. While the result is reasonable, the explanations provided by the court raise several questions.

IPWatchdog will host the 5th Annual Standards, Patents and Competition Masters™ program on November 14-15, 2023. The program will take place at IPWatchdog Studios in Ashburn, Virginia, approximately 10 minutes from Dulles International Airport. The purpose of this high-level, interactive, limited enrollment program is to discuss what is happening in the Standard Essential Patents (SEP) industry today, from FRAND, to bilateral licensing, patent pools, multi-jurisdiction enforcement strategies and more.

While the 5G program launch is a step into the right direction, the biggest challenge will be the new royalty rate. The 5G program is targeted at automotive OEMs, who if they join within the next 6 months (or before they ship their first 5G vehicle, whichever is later) will get access to all members’ cellular SEPs for a discounted rate of $29 per vehicle. After the 6 months the rate increases to $32 per vehicle for late joiners. While the whole automotive market will be happy about a SEP market share of 80%-83% (table 1), the new royalty rates will likely be discussed with a lot more controversy.

On Wednesday, July 5, the United Kingdom Intellectual Property Office (UKIPO) released a summary of the responses it has received to its request for views on whether the country’s system for standard essential patents (SEP) is functioning properly. The goal of the request for comments and the subsequent report is to determine whether the UK government needs to make policy changes in this area. The Office received comments on a variety of topics related to SEPs, including the balance of the system, competition, transparency, patent litigation, and more. While both SEP holders and implementers reported problems in the system, the UKIPO found that there was little consensus among stakeholders as to the efficiency of the system and whether government intervention was needed.

The European Commission (EC) is at it again, threatening to regulate standard essential patent (SEP) licensing relationships, despite a lack of evidence that such regulation is appropriate. The economically harmful nature of this regulatory framework (and its prior draft) has been highlighted by many expert commentators, including contributors to IPWatchdog (see here, here, and here) and Truth on the Market (see here and here). Fortunately, the EC’s proposed regulatory framework is still open for public comments. Mindful of that opportunity, on May 23, Mercatus Center scholars Christine McDaniel, Satya Marar, and I filed a public interest submission with the European Commission, focusing on three sets of problems posed by the framework. I summarize our submission below.

The European Union is reportedly considering sweeping new regulations for the licensing and litigation of standard essential patents (SEPs), which make fair-minded observers wonder whether any sane adults are in charge at the European Commission (EC). The EU’s proposed new regulatory regime is scheduled to be released on April 26 by the Directorate for the Internal Market, Industry, Entrepreneurship and SMEs (DG GROW) of the European Commission (EC). And recently leaked drafts suggest that proposal will contain sweeping new regulations that will effectively put an end to the licensing and litigation of SEPs as it exists today.

In late March, news broke that the European Commission was drafting sweeping regulations on the licensing of standard essential patents (SEPs). Commentators predict the draft will be released in late April and, although this is an early draft that will likely evolve, below we offer the following initial observations. In its current form, the new regulatory framework would encourage increased transparency in SEP licensing through several new policies and procedures. In particular, the regulations would establish a “competence center” at the European Union Intellectual Property Office (EUIPO) to act as a sort of clearinghouse for SEP issues (both technical and economic). The EUIPO does not currently have patent expertise; EP patents are the purview of the European Patent Office (EPO), which is separate from the European Union and includes non-EU members.

Wi-Fi 6 shares new technologies with LTE and 5G that are subject to heavy patenting. The firms and institutions that currently monetize their standard essential patents (SEPs) against LTE and 5G will likely be looking to increase their royalty income from Wi-Fi 6 and 6e. This could mean that the recent disputes over LTE and 5G standardization participants’ fair, reasonable, and non-discriminatory (FRAND) SEP licensing commitments will spill over into Wi-Fi. Current Wi-Fi litigation trends suggest that this is already afoot, and the recent licensor-friendly changes in the IEEE IPR rules are feared to only fuel this trend.

Patents essential to standards are surrounded by discussion, dispute and litigation. A key focus of this activity is how to decide on what is a fair, reasonable and non-discriminatory (FRAND) rate for using standard-essential patents (SEPs), and arrive at a number that both licensor and licensee can accept. In other words, we need a “path to success”. To accomplish this, I think what is needed first is a good method or approach to doing the calculation of a rate, a method which both parties can agree on. Once the parties have agreed on how to calculate, the licensing negotiations will likely be streamlined and there might be an easier and speedier path to success.

The past year has proven a difficult one for many. Russia’s invasion of Ukraine and the death of the UK’s longest reigning monarch are among the things for which the year will be remembered. But amid those dark days, one less known event shines like a tiny candle of hope: the end of the Whisky War. For 50 years, Canada and Denmark have been in dispute over the ownership of Hans Island: a battle in which the principal weapons have been strong drink and a sense of humor….. The standard essential patent (SEP) wars may feel like they have been going on for almost as long as the Whisky war. They are not as close to resolution, but 2022 has seen some progress.