Much has been written about the potential impact to handset vendors arising from the high-profile, high-tech, and high-drama Apple-Samsung lawsuit. However, the significant and relevant impact of this lawsuit on the development and adoption of standards has been widely overlooked. Patent protection and management is an integral business concern for any consortium setting, even more so when an entire industry relies upon the safety and integrity of the resulting standards in addition to the safety of their protected IP. Let’s explore the major risks and available solutions.
At issue in the trial are five Samsung patents relating to certain 3G standards developed under ETSI, in particular two that are deemed essential to implementation of the 3G standards. While Samsung claimed that Apple violated their 3G patents (which were licensed to Intel, provider of the 3G silicon in the iPhone), Apple claimed those patents were invalid on the grounds that they violated U.S. Anti-Trust law. The rationale is that these patents were not disclosed during the 3G standard development process, and were not subsequently licensed satisfying “reasonable and non-discriminatory” (RAND) terms.
This raises the question of what (if anything) could be improved in the standardization process to reduce such high-stakes risks. While the 3G standards were developed under ETSI, it should be pointed out that ETSI has a reasonably solid and clear IP policy with an IP tracking database that is typical of, or even better than, the average standards development organization (SDO). Nonetheless, there are three primary areas in which SDOs can generally improve.
First of all, the typical disclosure policy is, in effect, an “opt-in” process, in which a member is merely requested to speak up about any known essential patent claims in a timely fashion. However, the consequences of inaction are vague, since post-facto requests may also go unanswered and there is no real legal or financial obligation to act.
Next, the best time to re-draft a standard to avoid essential patents is definitely not years after it has been published and adopted, but rather while it is still in draft form and the standards development group is actively working on the document.
Third, without an explicit and structured legal review built into the standards development process, there is increased risk of infringement by the resultant standard on essential patents owned by the member companies.
Fortunately, all of these problems can be solved. Rather than an “opt-in” approach, all members could instead agree a priori to “default” RAND licensing terms (within the scope of that standard), unless they so choose to explicitly exclude a particular IP. Second, the time frame for granting or excluding IP could be moved up, prior to the specification’s approval. This way, everyone knows the legal IP status before voting, so re-drafting a standard to avoid any excluded IP is much faster and less costly to industry. Finally, it is not all that difficult to establish an IP review period of pre-determined duration before approving a specification, or to create an automated email notification system for any quantity of employees at each member company, providing status updates all throughout the review process for maximum awareness and appropriate action.
Such an IP management process would be safer for members’ IP, safer for adopters of the standards, and less costly or confusing should re-drafting it ever become necessary. Furthermore, the use of “Reciprocal RAND” licensing terms in the adoption phase could then extend that safety net well beyond the participating members as adoption continues to grow.
Some may question whether putting such a comprehensive IP policy into practice would be accepted within our industry, or too difficult and/or costly to manage. In fact, Si2 has applied such an IP policy for over seven years, where it has been a resounding success, due in great part to the fact that we partnered with our member companies’ legal departments to create it.
The principles listed above (plus a few more) have enabled a stronger and safer IP process that makes IP management both early and explicit. I would encourage all SDOs to consider a more comprehensive IP policy to minimize the future risks to open standardization, evidenced by such infamous lawsuits as Apple-Samsung, RAMBUS, SCO Unix, and very likely many more to come in the years ahead. --Steve Schulz is president and CEO of Si2Related materials:What were they thinking: Apple, Google, Oracle and Samsung duelingJury foreman in Apple vs. Samsung had 'light bulb moment'
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