Over the course of my 20+ years practicing law, I have had the honor of working with many individuals at the cutting edge of all aspects of intellectual property. I consider myself very lucky that most of these folks, in addition to being luminaries in the industry, are good people and have welcomed me into their professional world with open arms. To celebrate these individuals, I am inaugurating a series of interviews.
Previously we addressed some of the key omissions in Unified Patents’ article “FRAND SCAM.” This post discusses the article’s failure to address the heavy criticism of the royalty calculations in the TCL decision forms the basis for the key arguments in the article. For a long time industry analysts have criticized the TCL decision on a number of grounds (see, for example, this thoughtful article by Richard Vary at Bird & Bird):
Last month, Unified Patents, also known as a PTAB reverse troll, launched its new service called Unified Consulting. Citing from its website, Unified Consulting “can meet the needs of their companies through IP consulting and data service and support. U[nified] C[onsulting] provides innovative solutions to clients […].” Unfortunately, the solutions Unified advertises are to “problems” of Unified’s own making. To drum up its reverse trolling business, Unified misdirects its readers with an article titled “FRAND SCAM” that focuses on a vacated court case on fair, reasonable, and non-discriminatory (FRAND) licensing, without telling its readers that this case has since been by the Federal Circuit, that later court cases have contradicted its reasoning and analysis, and that industry analysts have heavily criticized it for some time. In this manner, Unified describes “problems” that do not actually exist to sell a solution that won’t actually work.
Previously we discussed a Unified Patents’ article, the “FRAND SCAM” fails to address many key points. But worse than these sins of omission, the article goes so far as to make some outlandish misrepresentations about the overturned TCL decision. For example, Unified incorrectly posits that the “court […] concluded […] that Ericsson had violated its FRAND obligations.” However, the TCL decision actually determined that Ericsson had met its FRAND obligations with respect to its course of conduct. The decision states: “Ericsson negotiated in good faith and its conduct during the course of negotiations did not violate its FRAND obligation.” (p3) The article also incorrectly claims that Ericsson agreed with TCL on the number of patents that were actually essential. However, as the TCL decision makes clear, “Ericsson made numerous challenges to the process that produced these numbers […]. Ericsson challenged the results of this process…” (p30) Ericsson challenged these numbers because TCL’s “experts” spent only 20 minutes per patent in their analysis, producing a vast over-counting of industry’s essential patents to Ericsson’s detriment. Indeed, this was the exact criticism that the UK court leveled on this type of exercise. Tellingly, a later study found the results of the 20-minute-per-patent review to be comparable to random guesswork.
As we have written previously, during the course of a United States litigation — whether, under the new, federal Defend Trade Secrets Act (DTSA) or the older state-adopted Uniform Trade Secrets Act (UTSA) — plaintiffs must typically provide a description of the trade secrets allegedly stolen. What constitutes an adequate identification of the stolen or misappropriated trade secrets depends on the nature of the trade secrets, the facts of the case, and the relevant jurisdiction.
There is no doubt that the number of patents declared as potentially essential to technical standards is not an indication of essentiality; its only purpose is to make those declared patents accessible on FRAND terms should they ever become essential. Tim Pohlman, founder of IPlytics a commercial technology consultancy, participated in an empirical study and report of essential patents commissioned by the European Commission (Tender No ENTR/09/015 (OJEU S136 of 18/07/2009)). In December 2016 his consultancy, released a 62 page report on SEPs commissioned by the EC. The report was the result an heroic effort to sort through and normalize patent declaration data for all widely adopted standards (See Fig. 1). This work was (and is) important and should not be under-valued. It has long been recognized (e.g., n.10), that patent declaration information “can be hard to find,  the links are often messy, and standards often see improved, updated releases.” On the back of the data the IPlytics team has been collecting about patents declared as potentially essential and 3GPP documents, they have been issuing privately-commissioned reports discussing their data as well as their analysis of the data in greater detail. Their recent reports on 5G have been widely discussed in the media and at conferences.
In my prior article addressing confidentiality agreements, I reviewed how to identify a company’s intangible assets and how to protect them with an NDA. This article will continue the discussion of preparing an NDA.
While companies are starting to better appreciate the role trade secrets can play in underpinning their intellectual capital, proactive trade secret management is still a very much neglected activity. This neglect can ultimately lead to the loss of valuable trade secrets and the loss of millions of dollars of value and legal fees. The widespread failure of many companies to take reasonable steps to protect their information should give managers and their company directors much pause. Fortunately, the law is starting to provide a clearer picture of what needs to be done, and there are many providers well versed in both best practices and productivity tools that will enhance a company’s trade secret protections. Read more
One of the most important developments in the world economy has been the increased importance of ideas and innovation. It is no exaggeration to say that they comprise the predominant source of economic value in the world today. The challenge with ideas and innovations is that they are intangible — and as such, they are hard to protect and even harder to value.