The UN got Samsung, Apple, Google, Microsoft, Nokia, RIM, Intel, Sony, HP and Huawei together in a room in Geneva this week to discuss standards-essential patents in the hope that the companies can agree on a way in which those who own key patents can benefit from them without taking to court in battles like the one between Apple and Samsung.
The UN agency, the International Telecommunications Union (ITU), arranged the patent roundtable in the hope that the various companies could sort out the licensing of these patents that are essential to building industry-standard products. More than 140 participants attended the event.
The key issue for discussion is how to determine the “reasonable and non-disciminatory” (RAND) terms on which SEPs are licensed, basically, how much relief owners of SEPs should be given and what an appropriate royalty base for them should be.
Announcing the plans, ITU secretary general Dr Hamadoun Touré said: “We are seeing an unwelcome trend in today’s marketplace to use standards-essential patents (SEPs) to block markets. There needs to be an urgent review of this situation: patents are meant to encourage innovation, not stifle it.”
“Acknowledging patent holders and user requirements, as well as market needs, is a balancing act. This timely multi-stakeholder roundtable will help press for a resolution on some of the critical issues,” he added.
A number of reports, including this one from The Guardian, note that Google’s Motorola and Samsung have been under scrutiny by legislators in the US and Europe for not sharing SEPs that relate to 3G and the H.264 video codec.
Intellectual property expert Florian Mueller of FOSS Patents writes: “The current SEP mess is a threat to the credibility of the IP regime as a whole (even though SEPs are only a minority of all patents).”
FOSS Patents explains: “Certain stakeholders wish to use their SEPs not only for rent-seeking but even more so to extort cross-licenses involving non-standard-essential patents, and in order to have this opportunity (to the detriment of competition and innovation), they argue that they should be allowed to be a little bit pregnant.”
FOSS Patents suggests: “A company like Apple can’t allow others to abuse SEPs in order to force Apple to relinquish its crown jewels in the form of comprehensive cross-license agreements involving SEPs and non-SEPs on terms that don’t meet Apple’s strategic needs.”
Google, on the other hand: “Wants to get away with Android’s proven wide-ranging infringement of third-party rights, and it either wants to get so much leverage out of Motorola’s SEPs that it can solve the problem through a cross-license on favorable terms or it wants to at least create a situation in which non-SEPs are subjected to pretty much the same enforcement restrictions as SEPs.”
Foss Patents doesn’t hold out much hope that Google and Apple will come to agreement. “They can meet at a dozen roundtables and still won’t agree. Those are just two of the companies involved, but their diametrically-opposed strategic interests show that even the most skilled dealmakers wouldn’t be able to broker an agreement.”
The other companies involved include Microsoft, who backs the current system, and Nokia who argues that bans should be available to holders of standards-essential patents (SEPs).
Much of the day’s talks took place behind closed doors. At a press conference afterwards, the ITU said Apple, Cisco and Microsoft were not the only ones who had called for change, but it declined to provide more detail beyond saying there was a “heated debate”, according to a BBC report.
Officials indicated it would be at least a year before any major issues were decided.
FOSS Patents Mueller, believes it will ultimately be the regulators themselves and the courts which will determine the issues.