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Steve Schulz
That would not solve the problem, because the risk is about undisclosed existing ...
expendable crewman #1
Wouldn’t it be better if the standards committee just patented the standard. ...
Collaborative Advantage: How Apple-Samsung will impact standards development
Steve Schulz
8/28/2012 9:13 PM EDT
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 dueling
Jury foreman in Apple vs. Samsung had 'light bulb moment'
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DataMuncher
8/29/2012 3:03 PM EDT
It seems that even when Steve's suggestions are followed, commercial exingencies drive companies that participate in SDOs to do stupid things, at least with respect to the standards org intentions.
Samsung seems to have bithered through ETSI's well-defined IP, trying prosecute what should have been FRANDed patents ex-posfacto to the standards setting. Whether intentional or accidental, both Samsung and South Korean courts look like dunces when it comes to understanding what they signed up for.
While Samsung seems to have claimed ignorance to FRAND requirements, Motorola/Google makes a more malicious claim that standards-org-based legal agreements to offer FRANDs are unenforceable.
I would argue that even the most robust IP policy for standards seems not to mitigate the risk of litigation if the stakes get high enough.
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Steve Schulz
8/29/2012 3:35 PM EDT
Although the Si2 IP Policy's track record has been ideal these last 7 years, we would agree that the broad topic of patents are never truly zero risk. At the end of the day, it is the perceived odds / value of winning vs. the risks incurred that will drive behavior.
That being said, having an up-front signed legal agreement among all parties is pretty strong evidence in any court; the odds of winning against such evidence are virtually non-existent. So this seems to pass the smell test for substantial risk mitigation for "submarine patents" in standards.
Yet even putting that first point aside, hopefully you would agree that the latter two points nonetheless provide vast improvements to full awareness and efficiency throughout the standardization process and would benefit all.
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Bert22306
8/29/2012 4:13 PM EDT
I would have thought that if the 3G license was paid by Intel, and Apple use the Intel chip, then that should be enough, no? The fee has been paid.
Perhaps it's not always so. I too have been stuck with this sort of problem, but happily let our legal types work it out.
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Steve Schulz
8/30/2012 4:01 PM EDT
Generally, it is reasonable to assume that if Intel had a valid license, then Apple could freely use the component purchased from Intel. After all, why else would Intel make a product customers could not use?
Nonetheless, the full legal answer is in fact dependent upon the specific terms of the actual license. There could conceivably be any number of special restrictions or conditions - technically, the rights are subject to whatever the two parties agreed to at the time.
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GEORGE.WILLINGMYRE
8/30/2012 4:39 PM EDT
Steve, I would like to review the si2 patent policy but could not find it. Is it public? Does si2 maintain a database of disclosures and license assurances? Thanks George Willingmyre GTW Associates
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Steve Schulz
8/31/2012 10:38 AM EDT
Yes, a slide summary of Si2's IP Policy is publicly available at: http://www.si2.org/?page=1584
Also, Si2 does maintain all RAND License and Exclusion Certificates received. Rather than having to search through a database, Si2 affixes these certificates to the specification document itself so any IP positions are obvious when someone downloads a specific standard. We also have detailed tracking pages on applicable licenses in the downloads section of our website. Feel free to contact Si2 for more specific questions, we're happy to help.
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Steve Schulz
8/31/2012 10:44 AM EDT
Also, here is Si2's (comprehensive) Anti-trust policy, which is a complement to the IP Policy:
http://www.si2.org/?page=351
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DataMuncher
9/2/2012 3:22 PM EDT
Steve,
Based on the discounting of Samsung's already FRANDed 3G patents in the Apple vs. Samsung decision, it appears that IP frameworks like yours offer some benefit when things get to the litigation stage. Yet, it appears that rogue companies like Samsung appear willing to violate their previous FRAND agreements with standards bodies and sue over essential patents, even after being stung by previous decisions
http://www.appleinsider.com/articles/12/08/30/samsung_to_sue_apple_over_lte_patents_partner_with_microsoft_to_avoid_android_lawsuits.html
Does your organization have dealings with Samsung ? If so, are they sharing information their essential patents and committing to RAND, or are they hiding ?
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Steve Schulz
9/4/2012 1:38 PM EDT
We work with Samsung at both the technical level and as an elected member of Si2's Board. Our experience has been positive, with no patent issues and willingness to commit to Si2's IP Policy in multiple projects.
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expendable crewman #1
9/5/2012 10:19 AM EDT
Wouldn’t it be better if the standards committee just patented the standard. This would cut off any members coming in later and trying to patent a piece of the standard. The members that came up with the standard could then share in the IP however they saw fit.
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Steve Schulz
9/5/2012 1:35 PM EDT
That would not solve the problem, because the risk is about undisclosed existing patents held by participating members. If such an essential patent has already been granted, it would block the proposed patent. In fact, any essential patents related to the standard's field of use, even those by cooperating companies that agree to license on RAND terms, would block approval of the proposed patent.
In addition, attempting to patent the standard would involve prohibitive expense and years of delay, and then you still have a potential anti-trust problem should those shared IP owners not license on RAND terms. It is much better to deal with it up front.
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