Posts Tagged: "Licensing"

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.

The European Union is considering a new regulatory regime for the licensing and litigation of standard essential patents (SEPs) that will destabilize the global telecommunications market. This proposed regulatory regime is unbalanced in favoring implementers over innovators, and thus it threatens to hamstring the explosive technological and economic growth in this vital sector of the modern innovation economy. Although the EU has finally awoken to the competitive and geopolitical threat posed by China, this regulatory proposal undermines efforts by the EU and the United States to sustain their global technological leadership.

Lenovo has been ordered to pay InterDigital a lump sum of $138.7 million for a global FRAND (fair, reasonable and non-discriminatory) license covering sales of cellular devices from 2007 to December 31, 2023, in the second full FRAND trial to be decided by the UK courts, following the landmark Unwired Planet case. (Interdigital Technology Corporation & Ors v Lenovo Group Ltd (FRAND Judgment – Public Version) [2023] EWHC 539 (Pat).) In his redacted judgment published on March 15, Mr. Justice Mellor found that neither InterDigital’s August 2021 license offer (which amounted to $337 million) nor Lenovo’s counter offer (which comprised a lump sum of $80 million +/-15% for all sales in the six-year term to the end of 2023 with a full release for all past sales for no additional consideration) were FRAND or within the FRAND range.

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.

In teaching Intellectual Property (IP) licensing for the Licensing Executives Society (USA & Canada), Inc., we often open with the first principle of contracts: the “contract” is the meeting of the minds between the parties. What did they actually agree to? The work of the written agreement is to memorialize that meeting of the minds. It is necessarily imperfect. Sir Ernest Gowers aptly describes the challenge of good writing generally, saying it is “the choice and arrangement of words in such a way as to get an idea as exactly as possible out of one mind and into another.” (Sir Ernest Gowers, Plain Words: Their ABC, Alfred Knopf, New York, 1955). In IP licensing, it is the difficult task of reducing to writing an idea from two or more minds such that it conveys to both what each conceived of as the agreement.

Companies rely on copyright protections to shield their software, data sets, and other works that are licensed to their customers; however, a reframing of what constitutes a “transformative use,” and the extent a license can restrict such fair uses, may whittle away all avenues of protections. On October 22, 2022, the Supreme Court of the United States heard arguments for Andy Warhol Foundation v. Goldsmith. The question before the Court is where does a copyright holder’s right to create derivative works stop and “fair use” of the work begin? Companies that license data sets or data feeds should pay close attention, as the Court’s decision could narrow contractual remedies. 

When it comes to how to best increase access to medicines in l0w and middle-income countries (LMICs), compulsory licensing gets most of the attention. Academic articles, non-governmental organization (NGO) campaigns, conferences and United Nations (UN)-endorsed technical symposia assert it is the best approach. Certain World Trade Organization (WTO) members are pushing for COVID-19 treatments and diagnostics to be included in the waiver of intellectual property rights under the Agreement on Trade-Related Aspects of IP Rights (TRIPs waiver), which revolves around compulsory licensing. Brazil has recently amended its IP laws to make compulsory licensing easier. Despite its high political profile, compulsory licensing has rarely been used (mainly by a handful African countries in the mid 2000s to address the HIV pandemic). Even then, IP-respecting treatments available from global procurement bodies have proven cheaper. No country has yet seen the need for a compulsory license for a COVID vaccine.

Tattoos have been around for millennia, but their popularity is increasing significantly. According to 2021 data, roughly 13% of Baby Boomers had at least one tattoo, compared to 32% of Generation X and 41% of Millennials. Other than disagreements about the appropriateness of visible tattoos in certain workplaces, tattoos generally cause few headaches for their owners, and certainly not legal headaches. That may no longer be the case, however, as tattoos become more common among celebrities and other high-profile individuals whose likenesses are commonly portrayed in digital media. While there has been relatively little litigation concerning tattoo copyrights, 2023 could be the year that changes.

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.

Some months ago, two courts in Germany granted injunctions against Oppo, one based on a standard essential patent (SEP), and another on a non-SEP related to Wi-Fi. Rather than cave to the demands of Nokia, Oppo has since decided to pull its products out of the German market. Since then, some commentators have claimed that this is another example of so-called “implementers” engaging in hold out. They point to the need for strong injunctive relief in order to force these “unwilling” licensees to the table.

A group of 25 experts in intellectual property law sent a letter to Assistant Attorney General (AAG) Jonathan Kanter today in support of a business review letter that the group said, “represented a legally sound and evidence-based approach in applying antitrust law to innovative commercial institutions.” The letter is also a response to an earlier letter sent to Kanter on October 17, 2022, by 28 former government enforcement officials, professors, and public interest advocates that urged the AAG to reconsider the business review letter. The Avanci business review letter was published by the Antitrust Division of the U.S. Department of Justice on July 28, 2020. In the letter, the DOJ said that Avanci’s licensing platform, which plans to license patent claims declared essential to implement 5G in cars, did not harm competition in the industry. Business review letters represent guidance by the DOJ to inform businesses how to best coordinate their practices to ensure they don’t violate antitrust laws.

On November 23, the U.S. Patent and Trademark Office (USPTO) and the U.S. Copyright Office published a joint notice of inquiry in the Federal Register announcing that the two agencies would be collaborating on a study regarding intellectual property legal issues related to digital assets known as non-fungible tokens (NFTs). The announcement follows the dramatic rise in mainstream attention on NFTs due to their wildly fluctuating value, which has in turn created a great amount of confusion surrounding IP rights to NFTs and the underlying digital files used to create them.

Companies that license intellectual property may not realize they are leaving money on the table in royalty underpayments and calculation errors made by their licensees. Forensic royalty audits can identify issues and correct royalty underpayments and IP valuations, but there are many aspects, not just financial, to consider. Beyond the costs and benefits associated with conducting a royalty audit, it’s also important to understand why and how licensees underreport and underpay royalties, and the key terms to scrutinize in your licensing agreement.