IEEE patent policy changes aim to curb the upsurge in litigation

0

An intense debate, reignited by an International Telecommunication Union roundtable in 2012 on endemic patent litigation and the “stifling innovation” use of intellectual property, as well as the growing lack of patents from standards bodies, prompted the IEEE Standards Association (IEEE) last year to review parts of its patent policy that had raised concerns, chief executive Konstantinos Karachalios told an Oxfirst webinar February 17.

The changes aim to remove certain ambiguities. Perhaps predictably, however, some setback has occurred among the industries affected by the change.

Given the broad consensus in the patent world that “an overly ambiguous patent policy is worse than no policy at all,” the Institute of Electrical and Electronics Engineers (IEEE) in New Jersey last year re-examined parts of its patent policy that had caused concern, Karachalios wrote in a January article for Patent attorney. The changes aim to help alleviate endemic patent litigation reported by ITU from the UN and other standards bodies, Karachalios said.

Previous clarification efforts have failed

The IEEE uses patent policy to make more informed technology selections by developing information about the existence of essential patent claims (EPCs, also known as standards essential patents), said Michael Lindsay, outside counsel for the ‘IEEE, attorney for Dorsey & Whitney LLP, during the webinar. Such a policy also protects patent owners and users by clearly describing their obligations and providing assurance to those responsible for implementation.

The IEEE standards can include “the use of essential patent claims” and the body asks participants in the development of standards to identify potential essential patent holders, Lindsay said. If the IEEE receives notice that a proposed standard may require the use of a potential EPC, it asks the patent holder for license assurance on a Letter of Assurance (LOA) form approved by the Standards Council. of the IEEE, a request that must be made “without coercion.” “

As part of an application for license insurance, an applicant agrees to make a license for EPC available to an unlimited number of applicants worldwide, without compensation or at reasonable rates, with other terms. and reasonable terms that are “manifestly free from unfair discrimination, for any compliant implementation that practices the EPC for IEEE compliant use,” Lindsay said.

A patentee then has several possible response options, he said. He may deny knowledge of an EPC, submit an LOA committing to license his EPC royalty-free or at a reasonable royalty, or agree not to enforce the EPC. The patentee could also refuse to give any assurance as to his licensing intentions, or simply not respond.

LOAs are voluntary and participants in IEEE standards development are not required to provide license assurance to participate, Lindsay said. The IEEE does not prohibit patent holders from charging royalties, nor does it set reasonable rates, he said. Parties are free to seek injunctions and the IEEE does not determine the validity, essentiality or infringement of the patent.

In a 2007 update, the IEEE attempted to clarify what a “reasonable” royalty rate is, Lindsay said. The compromise language says that the LOA submitter can, but is not obligated to, disclose its maximum rates and other sample terms and conditions. However, he noted, companies did not use this option, leaving the meaning of “reasonableness” ambiguous.

This issue, and the 2012 ITU Roundtable on Growing Patent Litigation, led the IEEE to review its patent policy. The updated policy, which came into effect in March 2015, now provides more clarity on how to determine “reasonable” royalty rates, which products that implement a particular standard are eligible for a license, when Infringement injunctions are available and when reciprocal cross-licenses can be sought, Lindsay said.

Devalue essential patents?

The revised policy won a favorable review from the US Department of Justice’s antitrust division, Lindsay said.

However, the accreditation of the American National Standards Institute (ANSI) of the IEEE has been challenged on other grounds by seven tech companies – Qualcomm, Ericsson, Alcatel-Lucent, Siemens, Philips, Orange and Fraunhofer – Ericsson IP & Competition Director Dina Kallay said in a March 1 interview. Many other important tech players, including IBM and BlackBerry, Panasonic and GE, are also opposing the new policy, she said.

The callers argued that the updated policy was developed through a closed, ad hoc process dominated by users of the technology (licensees), Kallay said. The IEEE invited comments from the public, but those responses were verified by the closed group, which generally did not accept comments from tech makers, she said. At the end of the process, the group approved a patent policy that “clearly devalues ​​essential patents,” she said.

There were two main grounds for appeal, Kallay said. On the process side, the appellants argued that the IEEE failed to meet the global standards development standards of the World Trade Organization Agreement on Technical Barriers to Trade, she said. . The WTO TBT contains a code of good practice that explains how to create an “international standard” and requires, among other things, that the process be transparent, open and balanced.

The second ground for dispute concerned allegations that the text of the new IEEE policy was inconsistent with ANSI essential requirements, says Kallay. Among other things, the new policy severely limits injunction measures and sets a “reasonable rate” of royalty, something ANSI has always left open to bilateral negotiations, she said.

The IEEE policy states that companies are free to negotiate, but the changes mean that when the parties fail to come to an amicable agreement, courts evaluating essential patents subject to the new policy will consider them less valuable than ‘under existing patent law due to the severe restrictions of the new policy. on injunction measures, specific “reasonable rate” factors, the new definition of “compliant implementation” and other revisions, Kallay said.

The market is already seeing the results of the policy in many companies refusing to give LOAs, refusing to guarantee access to their standards-critical patents, Kallay said. Some companies, including Ericsson, choose to give their assurances under the pre-existing policy, she said. All of this creates uncertainty and leaves users of technologies implementing IEEE standards potentially vulnerable to patent challenges, she added.

Call refused

In its February 25 decision, the ANSI Executive Standards Council (ExSC) dismissed both grounds for appeal.

The assertion by Ericsson and others that the process used by the IEEE to develop revisions to its patent policy failed to reflect a consensus of all interested stakeholders was not convincing. because it was based on the “false premise” that the essential requirements apply to the development of a standard. -define the organization’s procedures, rather than the approval of standards, wrote the ExSC. In addition, the panel said, the WTO TBT Code of Good Practice and other cited documents do not require a different interpretation of the essential requirements.

In addition, the IEEE patent policy complies with essential ANSI requirements, the panel said. The fact that there are differences between the patent policy of the IEEE and that of the ANSI does not in itself mean non-compliance, he said. As long as a standards body’s custom policies align with the requirements of ANSI’s patent policy, “they will be considered compliant,” the ruling says.

Further, while the IEEE patent policy may be “stricter” than laws in the United States or abroad, “there is nothing in ANSI patent policy that prohibits it, ”the panel said.

Applicants have until March 17 to appeal the decision to the ANSI Appeal Board. Ericsson declined to say whether he was considering appealing.

The IEEE webinar slides are available here.

The ANSI appeals process is available here.

Image credits: IEEE


Source link

Share.

Leave A Reply