AIPPI 2018: The FRAND battleground and ‘life-or-death’ decisions
With the advent of 5G technology and the internet of things (IoT), patent pools are likely to become increasingly relevant, an industry conference heard.
Adrian Howes, head of IP and standards, IP regulatory affairs at Nokia, was speaking on a panel called “Standard-essential patents (SEPs)—maximising value before enforcement”, held yesterday, September 24, at the 2018 AIPPI World Congress in Cancún, Mexico.
He added that “5G is going to be very different, with a lot more licensees in new sectors and new licensors. Decisions are going to be made by SEP owners as to how they license and whether it is even worth licensing in certain areas”.
With more than 100,000 employees and €1.6 billion ($1.9 billion) in patent and brand licensing revenue, Nokia has invested €4.9 billion in research and development (R&D), with much of that going into 5G and other technology.
Nokia is attempting to educate and make people aware of licensing and how it works: the company has created a document that outlines to newcomers how licensing is done.
Peter Martinsson, European patent attorney at Ericsson, agreed that the IoT and 5G are complex given the many players across various industries.
In 2015, Ericsson (along with Qualcomm and others) launched Avanci, to jointly license patents in the IoT market. Two years later, in 2017, German car maker BMW became the first automobile manufacturer to take a licence with Avanci.
Ericsson has 24,000 employees dedicated to R&D, 45,000 patents and more than 100 licensing agreements.
Judge James Robart of the US District Court for the Western District of Washington also provided his views on the debate about FRAND licensing.
“How many of you would like a judge who most likely has no engineering training making a life and death decision for your company?” he questioned, before adding that a FRAND royalty rate needing to be connected to the value of the patent is a fundamental principle.
Robart claimed that this seems to be the “basic building block” of the FRAND royalty rate.
“If I were to pick one letter of FRAND that seems to be the battleground, it’s F for fairness. What is a fair royalty? You need to frame what fair means in that context,” he added.
Tadanobu Ando, general manager of IP at Japan’s largest mobile phone operator Docomo, provided the perspective of a service provider. The company actively pursues R&D and owns patents in numerous countries, including the US, China and Korea. According to Ando, 62% of the company’s patents are related to global technical standards.
All panellists were speaking in a personal capacity. Gertjan Kuipers, partner at Dutch law firm De Brauw Blackstone Westbroek, moderated the panel.
The 2018 AIPPI World Congress is taking place until September 26.
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