Excerpts of "recommendations" from 4 studies of IPR issues in standards setting referenced in paper "Patent policies and standards setting: The issues. What is going on? Why should I  care? http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2435313

Table 1  “Encouragements to  SSOs to  further consider” excerpted from Study on the Interplay between Standards and Intellectual Property Rights (IPRs) April 2011[1]

 

clear and binding IPR policies including irrevocable and worldwide licensing commitments;

 

legal certainty in case of the transfer of essential patents to third parties;

 

reasonable incentives for good faith IPR inquiries and disclosure;

 

transparent, complete and accessible IPR databases;

 

cooperation with patent offices on identifying prior art.

 

.

Table 2  Excerpts from presentation Six “Small” Proposals for SSOs Before Lunch[2]

Establish procedures that seek to identify, in advance, proposed technology that involves patents which the patent holder has not agreed to license on F/RAND terms and consciously determine whether that technology should be included in the standard;

Make it clear that licensing commitments made to the standards body are intended to bind both the current patent holder and subsequent purchasers of the patents and that these commitments extend to all implementers of the standard, whether or not they are a member of the standards body

Give licensees the option to license F/RAND-encumbered patents essential to a standard on a cash-only basis and prohibit the mandatory cross-licensing of patents that are not essential to the standard or a related family of standards, while permitting voluntary cross-licensing of all patents

Place some limitations on the right of the patent holder who has made a F/RAND licensing commitment who seeks to exclude a willing and able licensee from the market through an injunction.

Make improvements to lower the transactions cost of determining F/RAND licensing terms. Standards bodies might want to explore setting guidelines for what constitutes a F/RAND rate or devising arbitration requirements to reduce the cost of lack of clarity in F/RAND commitments.

Consider ways to increase certainty that patent holders believe that disclosed patents are essential to the standard after it is set. The number of “essential” patents encumbered by F/RAND licensing commitments at certain standards bodies has increased exponentially in recent years.

 


 
Table 3 Recommendations excerpted  from   National Academy of Sciences Report, 
“Patent Challenges for Standard-Setting in the Global Economy: 
Lessons from Information and Communications Technology”[3]

FRAND

Recommendation 3:11

The committee urges SSOs to become more explicit in their IPR policies regarding their understanding of and expectations about FRAND licensing commitments. SSOs should clarify the various effects of a FRAND commitment by formulating certain statements of principle. These principles could include, among other conditions for compliance with FRAND, guidance regarding royalty demands that could be a disproportionate share of product value when many patents are necessary to comply with a standard and the relevant product includes multiple technologies.

Recommendation 3:2

The committee recommends that SSOs include statements in their policies that implementers and the consumers of their products and services are the intended third party beneficiaries of licensing commitments made by SSO participants. Although the enforceability in all courts of such a term may not be guaranteed (the law in this regard is still evolving), inclusion of such statements would inform courts of the intent of SEP owners  participating in SSO working groups. It would also provide greater confidence to potential  implementers, and promote greater certainty in the event of a dispute.

Recommendation 3:3

SSOs should clarify in their policies that  prospective licensees may request a license to some or all FRAND-encumbered SEPs owned or controlled by a patent holder. Licensors may not tie the FRAND commitment and the availability of the requested SEPs to a demand that a licensee accept a package or portfolio license that includes non-SEPs or SEPs for unrelated standards. Nor

may the licensors tie the FRAND commitment and SEPs availability to a requirement that the licensee agree to license back unrelated SEPs or non- SEPs.

Recommendation 3:4

SSOs should clarify in their policies that a holder of FRAND-encumbered SEPs may require a licensee to grant a license in return under FRAND terms to the SEPs it owns or controls (and those of its affiliates as specified in the SSO’s policy) covering the same standard or, as specified by the SSO, related standards.

Recommendation 3:5

It should be understood that SSOs’ IPR policies do not affect the freedom of parties to voluntarily enter portfolio or cross licenses beyond the scope of the

standard. This includes situations where  prospective licensors offer to license SEPs in a package, such as a fixed pool.


 
Patent Disclosures

Recommendation 4:1

SSOs that do not have a policy requiring FRAND licensing commitments from all participants should have a disclosure element as part of their IPR policy.

 

Recommendation 4:2

SSOs with disclosure policies should articulate their objectives and consider whether they sufficiently serve these objectives. In particular, such SSOs

may consider separating patent disclosure from licensing commitments and better define their preferred timing and specificity of disclosures.

Recommendation 4:3

SSOs should make disclosed information available to the public.


 

Recommendation 4:4

SSOs should consider measures to increase the quality and accuracy of disclosure data. Such measures might include updating requirements or greater coordination with patent offices.

Transfer of Patents with Licensing Commitments and Transparency of

Patent Ownership

Recommendation 5:1

Where they have not already done so, SSOs should develop meaningful policies by which  successors in interest are bound to whatever licensing commitment (e.g., FRAND) the SEP owner made to the SSO in question under that

organization’s IPR policy. This requirement should apply whether SEPs are individually disclosed or are covered by a blanket disclosure. These obligations should cascade through succeeding transfers.

Recommendation 5:2

Legislation, case law, or other legal mechanisms should tie licensing commitments to FRAND-encumbered patents needed to implement SSO standards. This should be done in ways that ensure the commitment automatically runs with the patents.


 

Recommendation 5:3

It may be difficult to identify patent transfers, because under current U.S. law they need not be recorded. Accordingly, public recordation with the patent office of transfers of all patents should be required by legislation or regulation.

The committee believes that this approach of recording all patent transfers is a practical and effective way of enabling transparency for transfers of SEPs, which may not always be identified as such. The record should identify the real party in interest.

Recommendation 5:4

Bankruptcy concerns are especially complex and raise uncertainty about consistency of licensing commitments. SSOs should develop guidelines to ensure that the licensing assurances made to them remain with the patent in bankruptcy proceedings and support legislation, if necessary, to the same end.


 

Recommendation 5:5

Competition authorities and international policy negotiators should, through legislation or regulation, find means to reduce inconsistencies across national legal jurisdictions in patent-transfer issues, including in bankruptcy processes.


 
Injunctive Relief for SEPs Subject to FRAND

Recommendation 6:1

 

SSOs active in industries where patent holdup is a concern should clarify their policies regarding the availability of injunctions for FRAND-encumbered

SEPs to reflect the following principles:

 

Injunctive relief conflicts with a commitment to license SEPs on FRAND terms and injunctions should be rare in these cases;

 

Injunctive relief may be appropriate when a prospective licensee refuses to participate in or comply with the outcome of an independent adjudication of FRAND licensing terms and conditions; and

 

Injunctive relief may be appropriate when a SEP holder has no other recourse to obtain compensation.

The committee could not reach unanimous agreement on appropriate venues for adjudicating FRAND disputes. However, a majority of the committee members endorse the following:

 

Majority Recommendation 6:2

SSOs should clarify that disputes over proposed FRAND terms and conditions should be adjudicated at a court, agency, arbitration or other tribunal that can assess the economic value of SEPs and award monetary compensation.

 

A minority of committee members endorse this alternative recommendation: Courts,

agencies, arbitration bodies or other tribunals (including the USITC) that consider patent

essentiality, FRAND determination, or public interest factors should be presented with  the facts and render injunctive relief decisions based on existing law such as the Ebay decision and/or ITC Section 337.

The committee also could not reach unanimous agreement on the scope of any limitations that a FRAND commitment might place on SEP holders’ rights to seek injunctive relief. However, a majority of the committee members endorse the following recommendation in that regard:

 

Majority Recommendation 6:3

SSOs should clarify that, before a SEP holder can seek injunctive relief, disputes over proposed FRAND terms and conditions should be adjudicated at a court, agency, arbitration, or other tribunal that allows either party to raise any related

claims and defenses (such as validity,  enforceability and non-infringement)

 

A minority of committee members endorse this alternative recommendation: SSOs should clarify that a SEP owner that has made an offer and offered to negotiate, with a prospective licensee, a license that will embody FRAND terms should be allowed to include injunctive relief in its pleadings when a FRAND dispute is brought to a court, agency, arbitration, or other tribunal that can consider equities, party conduct, reciprocity, and FRAND factors (including FRAND rates and terms).


 

 

 
Table 4  excerpted from EU commissioned study: Patents in standards: 
A modern framework for IPR-based standardization  
Ref. Ares(2014)917720 - 25/03/2014[4]

Improvements to the patent declaration system

 

· Updating patent declarations at key events, such as the adoption of the standard, the granting of the SEP, the invalidation or expiry of the SEP, the transfer of ownership;

· More precise and thus informative patent declaration, notably as regards information to substantiate essentiality;

· Checking essentiality of declared patents as a matter of routine;

· Entering licensing information in SSO database;

· Limiting the use of blanket disclosures, currently allowed by some SSOs;

· Notification of transfer of SEP ownership by recordation;

· Increased collaboration between SSOs and patent offices by linking the respective databases; to improve the usefulness of SSO databases in a cost efficient manner and also to allow patent

examiners better access to prior art material.

Promotion of patent pools

 

· Strengthening the relation between SSOs and pools;

· Providing incentives to SEP holders to participate in patent pools;

· Encouraging entities such as universities and SMEs to participate in patent pools.


 

Providing efficient dispute resolution mechanisms

 

· The benefits and costs of providing such dispute resolution mechanisms and of the different types of dispute resolution mechanisms (arbitration, mediation, "med-arb", mini-trials);

· The integration of dispute resolution mechanisms into the standardization process and the incentive for participants to use them;

· The substantive and procedural aspect of setting up such dispute resolution mechanisms.


 

Clarifying FRAND royalty rate and royalty base

 

· The royalty rate which could be defined in relation to its economic value, its ex ante value before standard adoption or the incremental value over competing technologies;

· The royalty base which could refer to the final product or to the component implementing the patent and the related question on the step in the value chain where licensing occurs.

Transfer of SEP ownership

 

Safeguards such as the commitment to licence on FRAND terms oblige directly only the initial patent owner having declared the patent as essential. In case of a subsequent transfer of the

ownership of this patent the subsequent owner must be bound as well. This can be done by defining or strengthening SSO rules that bind subsequent owners of SEPs to the initial FRAND

commitments or by promoting the use of a License-of-Right system to ensure that commitments to licence SEPs on a reasonable and non-exclusive basis are tied to the patent itself, whoever its owner.


 

Improved guidance on inclusion of patented technologies

 

The benefit of such guidance would lower the number of SEPs and increases the quality of the remaining SEPs thereby providing incentives for real innovators to engage in R&D and reduce unnecessary costs (both royalties and otherwise) associated with over-inclusion of technologies and complexity of standards. It may also reduce the costs associated with oligopolistic competition in the upstream market for necessary

technologies and promote the adoption/uptake of the standard.

 


 

 

 

 

[1] Study on the Interplay between Standards and Intellectual Property Rights (IPRs) April 2011   http://ec.europa.eu/enterprise/policies/european-standards/files/standards_policy/ipr-workshop/ipr_study_final_report_en.pdf

[2] Renata Hesse Deputy Assistant Attorney General, Antitrust Division, US Department of Justice, “Six “Small” Proposals for SSOs Before Lunch”  Remarks as Prepared for the ITU-T Patent Roundtable Geneva, Switzerland  October 10, 2012  See http://www.justice.gov/atr/public/speeches/287855.pdf

[3] “Patent Challenges for Standard-Setting in the Global Economy: Lessons from Information and Communications Technology” October 15, 2013  http://www.nap.edu/catalog.php?record_id=18510

 

 


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