I am very pleased that Practical Law has published a piece I co-authored with Doug Clark and Eric Stasik that discusses anti-trust issues associated with Standard Essential Patents (SEPs) and considerations for counsel managing SEP licensing programs. The purpose of the article was to provide a high-level overview of the entire life-cycle of SEP management from creation to licensing/litigation.SEP Licensing - Dec19Jan20 PracticeNote
It consists of 5 short videos (between 4-9 minutes each). I hope viewers find it useful and informative.
As I noted previously, over the past five years or so, the IEEE has been captured by the implementer lobby and its advocates. But where did this trend originate from? It probably has its roots in its leadership. In 2012, IEEE announced the appointment of Konstantinos Karachalios as its Managing Director.
The announcement boasted Karachalios’ 25 years of experience with the European Patent Office (EPO). However, what it failed to mention, was his long track record of expressing anti-patent positions, which likely held up his promotion and expedited his departure from the EPO.
Very pleased that the first video of my talk for PatSnap’s Academy on SEPs is available. This video, at just under 9 minutes, covers basic terminology and a short history of SEPs.
In this part of the talk I review the publicly available statistics on SEP validity, critique the real party in interest doctrine at the PTAB, and offer a possible solution rooted in securities laws.
In this part of my talk I proposed the idea that just like suing for SEP infringement without following the relevant FRAND regime may prevent the SEP holder from seeking an injunction, engaging in serial nullifications of SEPs without following the relevant FRAND regime should prevent an implementer from using the FRAND regime as a defense to an injunction.
While most are unlikely to be familiar with the standards development organization IEEE-SA, everyone is familiar with its flagship standard IEEE 802.11, more commonly referred to by its brand name Wi-Fi, that is utilized by billions of people daily. Like all modern wireless standards, Wi-Fi relies on cutting edge proprietary technology to innovate and progress from version to version in order to improve users’ communication experience. That principle is well captured in IEEE-SA’s logo “advancing technology for the benefit of humanity”.
In 2014, IEEE-SA proposed radical changes to its patent policy, which governs treatment of proprietary technology contributed into IEEE-SA standards. The vast changes amended more than half of the preexisting policy, and were geared towards devaluing patented technology contributed to IEEE-SA standards (also known as Standard Essential Patents or SEPs), and facilitating its infringement.
If you follow statements of antitrust agencies the world over – even as far away as China and Korea – you would think that there is a crisis going on in SEP licensing. Some agencies have shown interest in the theoretical concept of “stacking” of SEP royalties. For example, a 2016 Speech by the European Commissioner for Competition Margrethe Vestager represented that “Patents and standards are very important in the world of mobile devices. One recent study shows that 120 dollars of the cost of each smartphone comes from paying royalties for the patents it contains.” While high royalties do not (and should not) create a presumption of anticompetitive behavior, it is not unreasonable where there are high royalties for a competition regulator to at least be curious whether there is anticompetitive conduct underlying such reality. Unfortunately, what has happened is the reverse: competition regulators have assumed a high royalty regime, where in fact royalties for handsets are relatively low. Aggregate SEP royalties are lower even than the 6-8% predicted by a leading manufacturer in 2009.
Well it finally happened. Notwithstanding the settlement with Apple, the district court overseeing the FTC’s case against Qualcomm issued a blistering, 233 page opinion against Qualcomm’s SEP licensing practices. Some have argued that this ruling is just one more step in Apple’s long play attempts to kill SEP licensing – the technology that has put the “phone” into the iPhone. To better understand this claim it is worth looking back at Apple’s history with respect to SEPs.
After a period of skeptical acquiescence, anti-trust regulators seem to have come around and embraced patent pools for standard essential patents (SEPs.) The European Commission, no slouch when it comes to regulating SEPs, even remarked that the creation of patent pools “should be encouraged.” Indeed, one recent study purporting to be the first to empirically analyze the costs and benefits of patent pools estimates that pools save licensees hundreds of millions of dollars in transaction costs.
Notwithstanding the EC’s encouragement, anti-patent advocates, Google & Apple Unified Patents, has decided to engage in a social media and costly litigation campaign to kneecap two high efficiency video coding or HEVC patent pools. Filing 3 IPRs and 10 IPRs against patents belonging to HEVC Advance and Velos, respectively. At a cost of between $300,000 to $600,000 per IPR, these IPRs cannot come cheap – even if much of the work is done in-house. Accordingly, it is worth asking why is Unified trolling HEVC Advance and Velos, especially since there has yet to be any litigation by the owners of the HEVC patents that were IPR’ed.