Posts Tagged: "royalty"

Speaking at IPWatchdog’s Patent Master’s Symposium today, Professor Kristen Osenga of The University of Richmond School of Law gave attendees a glimpse of her upcoming paper examining problems with the Institute of Electrical and Electronics Engineers – Standards Association’s (IEEE-SA) 2015 amendment to its intellectual property rights (IPR) policy. In reference to the title of the panel on which she was speaking, “Balance, Transparency & Reasonableness: Converging Approaches to SEP Licenses and FRAND Royalties,” Osenga explained that “balance transparency, and reasonableness simply were not part of the process” by which IEEE adopted the new policy. Osenga’s paper, which is due to be published on the Social Science Research Network (SSRN) by the end of 2019, will examine the actions leading up to the adoption of the 2015 amended policy, as well as the aftermath. Below is an abstract of the paper; many of the issues it will touch upon were also covered in Osenga’s 2018 paper, “Ignorance Over Innovation: Why Misunderstanding Standard Setting Organizations Will Hinder Technological Progress.”

On March 20, U.S. District Judge Gonzalo Curiel of the Southern District of California issued an order denying a motion by Apple, which was seeking partial judgment against Qualcomm on that company’s claim that it had fulfilled its fair, reasonable and non-discriminatory (FRAND) obligations for licensing its standard-essential patents (SEPs). As a result, Qualcomm can move ahead with its efforts to prove that its SEP portfolio licensing activities have met the company’s FRAND obligations and that Apple has forfeited its right to FRAND licensing because it hasn’t been a willing licensee.The court sided with Qualcomm in finding that Apple’s arguments regarding the unsuccessful licensing negotiations presented a definite and concrete controversy. Qualcomm had cited to a 2017 Eastern District of Texas case, Huawei Techs. Co. v. T-Mobile US, Inc., to show an instance where a court had found subject-matter jurisdiction in a case where a patent holder sought a declaration that it had complied with FRAND obligations. In the current case, Apple hadn’t stated unequivocally that it wouldn’t pursue a stand-alone breach of contract action, giving rise to a substantial controversy with sufficient immediacy and reality to justify declaratory relief. A favorable outcome to Qualcomm on this claim would afford additional relief, as Qualcomm could demonstrate that Apple had engaged in unreasonable holdout behavior, relieving Qualcomm of further FRAND obligations towards Apple.

Less than 48 hours before the 60th Annual Grammy Awards in New York City, the Copyright Royalty Board (CRB) ruled to increase royalty payments to songwriters and music publishers from music streaming companies by nearly 44 percent, the biggest rate increase granted in CRB history. These rates will go into effect for interactive streaming and limited download services like Amazon, Apple, Google, and Spotify for the years 2018-2022, and will transform how songwriters are paid by these interactive streaming services.

While Exmark invites a more flexible approach to apportionment, allowing, at least in some cases, a focus on the royalty rate to value the patented invention, the rate analysis itself must be properly supported. Indeed, Exmark serves as a cautionary reminder that any expert opinions on reasonable royalty damages must be closely tied to the facts of the case. Damages opinions that are purely speculative and unsupported by the facts of the case are likely to be found inadmissible. As a result, apportionment approaches will continue to be case-specific, variously focusing on the royalty base, the royalty rate, or a hybrid-model involving both elements.

On Friday, October 6th, Chicago, IL-based intellectual property owner Ironworks Patents LLC filed a patent infringement case against Cupertino, CA-based consumer tech giant Apple Inc. in the District of Delaware. Ironworks’ complaint alleges that Apple’s sale of various iPhone models infringe upon patents that Ironworks owns which cover programmable alert sounds and related technologies incorporated into Apple’s smartphones.