Posts Tagged: "SEP"

The FTC laid out Qualcomm’s predatory licensing tactics in its complaint. Instead of treating all companies the same, Qualcomm refuses to license to other chip makers so that it has a virtual monopoly on CDMA chips. And instead of licensing on FRAND terms, Qualcomm forces its customers to buy licenses they don’t need and massively overcharges them for those licenses… No one denies Qualcomm’s place in telecommunications history, but Qualcomm has been paid many times over at this point. Enough is enough.

On April 20, 2017, a group of auto and technology companies sent a letter to President Trump urging him to direct the Federal Trade Commission and other U.S. agencies to do something “to address patent abuse involving standardized technologies,” which the letter goes on to explain are vital to the “nation’s innovation and economic development.”… So what is going on that has these companies all hot and bothered? It is a contract issue, nothing more. It is merely paraded around as patent abuse in an attempt to both deceive, and to make it more likely the government will want to step in and tip the balance with an agency finger on the scale. After all, if it were a private contract matter it would be much more difficult to get the federal government to pick a side. So the decision is made to grossly misrepresent the heart of the problem and pretend it is something that it is not.

The U.S. Federal Trade Commission (FTC) will not be radically changing the analysis used to address antitrust issues presented by patent law issues. The news stems from comments made by FTC acting chairman Maureen K. Ohlhausen at the 32nd Annual Intellectual Property Law Conference sponsored by the American Bar Association (ABA). Ohlhausen would go on to explain that the recent updates to the IP Licensing Guidelines, which occurred in January 2017, were “modest”, provided the FTC with flexibility, and continue to recognize that “IP law grants enforceable rights.”

On March 3rd, Swedish telecommunications company Ericsson publicly announced its fair, reasonable and non-discriminatory (FRAND) terms and conditions for the licensing of standard essential patents (SEPs) for 5th Generation New Radio (5G/NR) as standardized by the 3rd Generation Partnership Project (3GPP). The decision to announce these terms publicly may be an indication that Ericsson is looking to avoid the fate of other mobile wireless chip makers, which have come under fire in recent months for their own licensing practices.

On Friday, January 20th, Cupertino, CA-based consumer tech firm Apple Inc. (NASDAQ:AAPL) filed a lawsuit against San Diego, CA-based semiconductor giant Qualcomm, Inc. (NASDAQ:QCOM) The lawsuit seeks $1 billion in damages which Apple alleges that Qualcomm is withholding from the iPhone developer in violation of an agreement between the two companies, including injunctive and other relief. The suit, which includes breach of contract claims, patent claims and antitrust claims, was filed in the U.S. District Court for the Southern District of California (S.D. Cal.).

Unlike other technologies (e.g. User interface) where the manufacturers have a choice to design around the technology of the patent, in case of SEPs, there is no possible way to avoid infringement and still comply with the standard. On the other hand, non-compliance with standard is a commercially non-viable option. This situation gives the SEPs holders a great leverage to assert their licensing terms. While there have been several cases and rulings in favor of SEP licensees that put some restrictions on the SEP holders regarding their FRAND licensing commitments as well as their abilities to exercise an injunction for infringement of SEPs, lack of clarity on FRAND terms still make the negotiations tough for a potential SEP licensee.

This year our panel of industry insiders is quite diverse, with commentary from Bob Stoll (Drinker Biddle), Ashley Keller (Gerchen Keller), Paul Morinville (US Inventor), Alden Abbot (Heritage Foundation), Marla Grossman (American Continental Group) and Steve Kunin (Oblon). Unlike last year where there was near unanimous agreement that the Supreme Court’s decision in Alice v. CLS Bank was the biggest moment of the year, this year our panel of industry experts focused on a variety of different matters. There was one recurring theme, however. The inability of patent reform to advance on Capitol Hill was undoubtedly one of the biggest stories of the year.

Both Korea and China are major players on the global patent stage, and the leading companies of these countries file and obtain thousands of patents annually. But it seems increasingly clear that the governments of these countries are attempting to support their domestic companies via antitrust enforcement to lower the price of access to patented technologies of foreign competitors.

It is important to emphasize that we are not claiming that the patent system as currently defined cannot be improved. Rather, we offer evidence on two interrelated predictions of the SEP hold-up hypothesis. First, if SEPs are holding up innovation, then products that are highly reliant upon SEPs should experience more stagnant quality-adjusted prices than similar non-SEP-reliant products. Second, if SEPs are holding-up innovation, then changes in the legal system (eBay) that weaken the excessive negotiating strength of SEP holders should accelerate reductions in quality-adjusted prices in SEP-reliant industries relative to non-SEP-reliant industries. We find no evidence for either prediction.