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Menno Treffers

has lead standards development organizations and created patent license programs. He is chairman of the Wireless Power Consortium, an industry group that developed the Qi standard for wireless charging of mobile phones. As founder of Treffers Alliance Management, he helps clients predict the effect of intellectual property license terms on distribution channels and on the competition between products. Prior to founding Treffers Alliance Management, Menno worked with Koninklijke Philips and with One-Red LLC, where he was responsible for new business development and the DVD video disc patent license program. At Koninklijke Philips he developed the VEEZA patent license program for CD-R discs and contributed to the creation of various industry standards, such as Super Audio CD, Blu-ray Disc, and the Zhaga standards for LED light engines. Menno Treffers has a PhD in physics from Leiden University in The Netherlands.

Recent Articles by Menno Treffers

Emotions in the debate on royalty payments for the use of standards

The debate on royalty payments for standard essential patents has a surprisingly emotional, sometimes even hostile, undertone. Companies selling standards-based products have an obvious commercial interest in lower royalty rates, but for some participants in the debate the hostility goes deeper. Some people find the idea of having to pay royalties for the use of any standard objectionable and unreasonable.

The Royalty Rate for a Subset of Standard Essential Patents – What Is Reasonable?

How can a patent that is deemed essential for a standard not be infringed in a product that implements that standard? One possible explanation could be that the claim of essentiality is incorrect. That’s why it is important to document essentiality with a claim chart and ask an independent expert to verify that infringement of the patent claim is prescribed by the standard. But an independent verification is still no guarantee that court will agree that such a patent is really infringed by a product. Another explanation is that the patent is essential for an option in the standard and that the product does not implement this particular option. Most technical specifications of interface standards have options, describing alternative methods to implement the standard. Manufacturers can choose one of the options and will not infringe patents that are essential for implementing another option.

Inventions Make a Standard Competitive

When a standard faces competition, it is essential to be the first on the market with products and to establish the highest market share. The network effect will make it increasingly difficult for competing standards to get a foothold. Two competing standards will, therefore, be under pressure to gain market share in the early stages of adoption by getting to market first, with superior performance, and with the lowest price. In view of the network effect, getting to market first is usually the highest priority. But in the early stages of adoption, being a little bit later with superior performance is still viable.

A micro-economic estimate of the reasonable royalty rate for standard essential patents

The debate on RAND terms and conditions is mostly about the reasonability of the royalty rate, less about non-discriminatory part. So, what is a “reasonable rate”? Companies that manufacture products based on a standard will demand lower rates or royalty-free licenses, claim harm from patent hold-ups and from royalty stacking. These companies will argue that it is unfair when companies that contribute technology to the standard benefit from the lock-in of the standard because it is now unavoidable to use the essential patents in their products. On the other hand, companies that participated in standards development, and own essential patents because of that investment, claim that lower royalty rates will remove the incentives for future investments in standard setting and will stifle innovation. In the confusion generated by these lobbying interest groups, it makes sense to go back to the one thing everyone seems to agree on: Standards are good.