ITU To Hold High-Level Talks On “Innovation-Stifling, Rampant” Patent Litigation

The UN International Telecommunication Union (ITU) today announced it will hold a high-level meeting on the global surge in standards-related patent litigation which it said is stifling innovation in information and communications technology.

The high-level ITU Patent Roundtable will be held at the ITU in Geneva on 10 October 2012, and will include standards organisations, industry representatives, and government officials, the organisation said in a release. The ITU considers public interest groups to be represented by their governments.

To be addressed will be a “growing lack of adherence to standards bodies’ existing patent policies,” as “standards essential patent” litigation rises. Topics will include: potential improvements to existing policy frameworks, entitlement to injunctive reliefs, and definitions of what constitutes a royalty base, it said.

There will also be discussions on the relevance of current arrangements based on reasonable and non-discriminatory (RAND) patent policies.

“RAND-based policies have thus far been an effective way of managing natural tensions between patent holders, standards implementers and end-users,” it said. “However, the definition of what constitutes ‘reasonable’, and whether or not holders of SEPs are entitled to injunctive relief are now emerging as major points of contention.”

Standards are increasingly anticipating technologies rather than following them, the UN agency said, which affects the market. The ITU said it is the “pre-eminent global standards-making body,” and strives to balance both user and intellectual property requirements.

Patent litigation is particularly affecting the ICT industry, it said, as key protocols in devices sometimes encompass as many as hundreds of patents. “If just one patent holder decides to demand unreasonable compensation for use of its intellectual property (IP), the cost of the device in which that IP is implemented can skyrocket,” ITU said. In addition, shipments are being impounded and held at docks.

“There needs to be an urgent review of this situation: patents are meant to encourage innovation, not stifle it,” ITU Secretary-General Hamadoun Touré said in the release. “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.”

Related Intellectual Property Watch article: A Bigger, Meaner Patent War, (IPW, US Perspectives, 25 June 2012).

Below are quotes provided by ITU:

Amy Marasco, General Manager, Standards Strategy and Policy, Microsoft Corporation: “Microsoft is pleased that the ITU is organizing this global event to explore current issues related to RAND licensing commitments made to standards-setting bodies. We look forward to participating in this timely discussion.”

Knut Blind, Chair of Innovation Economics, Berlin University of Technology: “Standards and patents are crucial indicators of technological development, the central force driving growth in modern information and knowledge economies. However, complexity arises because, while patents restrict the use of technologies, international standards aim to make technologies globally-accessible. As a result, standards developers and patent holders are sometimes at odds, so I thank ITU for convening this roundtable to discuss the RAND-based IPR policies which should continue to mediate this fierce, but in general fruitful relationship.”

Feng Pan, Deputy Director-General, China Communications Standards Association (CCSA): “International standards should represent globally-agreed best practices for the cutting-edge of technology, reflecting innovation occurring across the world. As a consequence, international standards bring all countries up to speed with the latest technological developments, enabling further, internationally-harmonized ICT development. Standards thus often demand the inclusion of patented technology, and CCSA looks forward to ITU’s IPR roundtable where standards-developers and patent-holders can express their concerns with RAND-based policies and suggest means of balancing the relationship between standardization and intellectual property.”

Jongbong Park, Telecommunications Technology Association: “TTA is a standards developing organization (SDO) in the Republic of Korea and, given the imperative of cooperation and collaboration between national SDOs when developing international standards, TTA will definitely join other SDOs at ITU’s IPR roundtable to deliberate the IPR issues of critical importance to us all.”

Yoichi Maeda, CEO of Telecommunications Technology Commission: “TTC in Japan is pleased to send an IPR expert to ITU’s roundtable on RAND-based patent policies to exchange innovative ideas that can guide future discussions on whether current patent policies and existing industry practices adequately respond to the needs of various stakeholders.”

Florian Mueller, Analyst and author of Foss Patents blog: “Litigation over standard-essential patents is on the rise, worldwide. Judicial and regulatory decisions can help give meaning to FRAND, and this is the right time for leading standard-developing organizations to brainstorm about clear rules able to limit the scope of future disputes involving standards.”

Michel Goudelis, European Patent Office: “Patents are an exception to the general principle of free competition and enterprise and accordingly need to be granted very judiciously, applying a rigorous quality policy. That policy includes taking into account all relevant documents accessible and revealing the state of the art, including technical standards, in order to ensure the granting of legally safe and transparent patents commensurate with the inventions they protect. EPO has a long-standing involvement in the area of standardization. It is committed by its mission to the delivery of high-quality services, to transparency and to advocacy. Therefore, we have signed agreements with the leading Standardization Organisations, such as ITU, IEEE and ETSI, to include documentation from standard developing organizations in our patent searching activities. We also pursue a harmonized approach in this field across the major economic regions. A first step has been reached with the enhanced technical cooperation of the EPO with the patent offices of the US, China, Japan and Korea, where patent harmonization with a view to improving and securing quality is a key perspective. We are convinced that patent litigation frequency and intensity can be significantly reduced through the institutional cooperation between the standardization and the patent systems.”

Brian Scarpelli, Government Affairs, Telecommunications Industry Association: “TIA, a leading developer of voluntary industry standards and specifications for ICT industry, applauds ITU for convening a roundtable where reasonable and non-discriminatory (RAND) patent policies can be discussed with key stakeholders. TIA believes that RAND patent policies balance implementers’ need to access and use patented technology included in a standard with patent holders’ need to preserve their rights in a way that encourages them to innovate and contribute their inventive solutions to the standardization effort, making patented technology available to all on RAND terms and conditions. This roundtable is very timely, and we look forward to hearing from and engaging with others on this topic at October’s event.”

Thomas Goode, General Counsel, Alliance for Telecommunications Industry Solutions (ATIS): “Since ATIS’ inception over 30 years ago, it has maintained a patent policy that balances the interests of standards-essential patents (SEP) owners and standards implementers. ATIS believes that it is important to provide the opportunity and incentives for SEP owners to make their intellectual property available for inclusion in standards, while allowing implementers broad access to such technology. ATIS is aware that disputes have arisen with greater frequency, recently involving RAND/FRAND issues. While such disputes have generally not been directed toward ATIS standards, ATIS is pleased to take part in the discussions being hosted by the ITU on this subject.”