TPN: How many patents are actually essential?
As the world enters the 5G era, fair, reasonable, and non-discriminatory (FRAND) access to the patents behind the revolutionary technology will become one of the most important issues in IP.
It’s surprising then, that we know so little about which patents are and aren’t standard-essential to 5G. The need for better data was a theme which emerged during yesterday’s virtual Technology Patent Network (TPN), hosted by WIPR.
Speaking during the webinar session on “Key Considerations for a FRAND Patent Licensing Strategy”, Ken Seddon, CEO of the LOT Network, said there was a “tremendous lack of transparency about how many standard-essential patents (SEPs) are out there, and who owns them”.
The confusion is not over how many patents have been declared standard-essential—in the case of 5G, Seddon noted that it was 95,000 assets in total—but rather how many of them actually are.
After all, as moderator Ryan Richardson, director at Sterne, Kessler, Goldstein & Fox, noted, it’s only “very few patents” which are ultimately proven to be valid and essential to a standard.
Hongming Liu, senior IP counsel at Tencent America, agreed, remarking that any company in a standard-setting organisation (SSO) could declare their patents essential, just like “I could declare myself to be from Norway, there’s nothing to stop me from doing that”.
“Anywhere between 25-50% of assets declared essential end up not being so, so we can’t have great confidence about who really owns the essential patents,” Seddon argued.
As CEO of the LOT Network, Seddon announced that four member companies—Google, Daimler, Honda, and Microsoft—had committed to fund a “deep analysis” of all the patents declared essential to 5G standards in the hope of developing a database or almanac.
FRAND venues
One of the biggest debates in FRAND licensing is about venue—which are the best courts in which to bring FRAND disputes, and which courts should get to set the terms of a global licence?
Andrew Schwaab, shareholder at Greenberg Traurig and president of the Silicon Valley Intellectual Property Law Association, said it was important to bear in mind the contrasting approaches taken by courts in different jurisdictions.
If you’re interested in keeping the details of certain agreements or other information confidential during a FRAND dispute, then the US and the UK are the most amenable venues, Schwaab said.
“But if you want that information public, then you might consider a forum like Germany, where they tend to analyse those things on the record,” he added.
In the future, big SEP owners would likely “tend to prefer jurisdictions like the US, which are very complex and difficult to be beaten in”.
“On the other side, German courts like Dusseldorf, they’re more interested in getting to the heart of the matter, they’re more likely to cut some of these big players down to size and help move things forward a little faster,” Schwaab added.
Liu predicted that we might start to see more SEP cases litigated in China, owing to the technical expertise available to the judiciary.
“In China, they can set up specialist IP courts pretty easily in different cities,” the Tencent lawyer said.
“These courts don’t just hire judges, they hire full-time experts in the field, so people I’ve spoken to in China say you can get quite a good result,” he added.
TPN North America was held as a virtual event, after the San Jose conference was postponed due to the outbreak of COVID-19.
While greatly disappointing, the decision has been taken in the best interests of the health of the public and all attendees.
The event will be rescheduled for a US location later in the year.
The virtual event also featured David Sanker, partner at Morgan, Lewis & Bockius, discussing Patenting Artificial Intelligence: Use of Patents or Trade Secrets.
Elsewhere, Mehul Shah, patent attorney at Nagra, and Peter Jovanovic, senior legal counsel, IP at Dell, discussed Best Practice for In-House IP Counsel: Invention Harvesting.
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