About Tim Pohlmann

Dr. Tim Pohlmann is founder and CEO of IPlytics GmbH. Before he founded the IPlytics in 2014 we worked as a research associate at the "Law and Economics of Patents Group"​ CERNA, MINES ParisTech and as an associate at Berlin Institute of Technology. He furthermore cooperates with the Fraunhofer ISI and Northwestern University of Chicago. Dr. Pohlmann's expertise covers the empirical analysis technology trends and market competition such as e.g. patent strategies, the interplay of patents and standards, the pooling of patents, technology licensing, patent trolls and standard setting for ICT.

Patent Transaction Trends in Cloud Computing

Cloud Computing describes a type of Internet-based computing that provides access to shared computer processing resources. Cloud users store and process data to run diverse sets of software applications on shared computing systems. Cloud computing allows to run performance intensive processes on demand. This avoids up-front infrastructure costs and possibilities to scale up or scale down systems as to user traffic. Pay as you go models enable users to quickly get applications up and running.

The number of applications that run on cloud infrastructures is constantly growing. Market research reports predict worldwide cloud computing spending to drastically scale in the upcoming years.[1] In this regard the number of solution providers has been constantly increasing and the market develops to be more and more competitive.

Companies increasingly compete on innovative technologies that e.g. enable the efficient scaling up of a virtual machine, the quick deployment of data or the rapid recovery of applications. Such innovative technologies are exceedingly patented to allow patent owners to secure future technological areas, to demand royalty payments from other service providers or, equally likely, to ward off claims made against cloud providers by aggressive patent-holders.

We have used IPlytics Platform to perform an extensive keyword[2] search in worldwide filed patents’ titles, abstracts and claims to identify the strongest patent holders in the cloud computing space. In total our search identifies over 26,000 granted cloud computing patent families. 95% of these patent families have been filed in the past four years (2013-2017). Results show that the landscape of cloud computing patent owners is very diverse. Figure 1 illustrates that the three strongest patent holders IBM, Microsoft and Google altogether filed more than 5,000 patent families that have been granted in the past years. Sony, SAP, Samsung and Cannon are the only non-US companies among the top patent owners.

Figure 1: Number of granted cloud computing patent families up until January 2017

Not only the filing of new patent families has been increasing, but also the trade of patents has been growing in the recent years. Figure 2 illustrates the number of patent family transfers between 2011 and 2016. Numbers of yearly patent transfers peaked in 2015 with about 790 transferred unique patent families.

Cloud computing patent transfers

Figure 2: Number of reassigned cloud computing patent families as to main industry of the buying entity and as to year of reassignment

To ensure “bare” patent transfers among independent companies we differentiate the applicant and new owner company with regard to the highest parent company. We cleaned out cases, where the former and new owners were subsidiaries of the same parent corporation. Such reassignments are likely to result from fiscal optimization and strategic motives at the corporation group level. We label them as “internal” transfers if they take place between established entities of the same group, and as “acquisition” if they immediately follow the acquisition of the initial patent owning entity by the group.

Figure 2 only takes into account “bare” patent transactions and differentiates the patent transfer deals as to the buyer’s main industry of operation. The main industry refers to the main business service or product marketed by the applicant. The largest buyers in the software industry are SAP, Microsoft, McAfee and Adobe, the largest buyers in the Hardware industry are Intel, HP, Ricoh Company and Lenovo. The largest buyers in the Internet industry are Google, Amazon and Facebook, the largest buyers that are in the licensing and assertion business PAEs (Patent Assertion Entities) are Intellectual Ventures, Rovi Corporation and Dynamic Invention.

While the upsurge of patent acquisitions has consistently been increasing among the Hardware, Software and Internet industries, the share of patent family acquisitions by PAEs especially increased in 2015 and 2016. Figure 3 illustrates monthly patent transfers to PAEs. On average these transfers have been increasing since 2011 by 130%.

Cloud computing patent transfers to PAEs

Figure 3: Linear trend average of monthly reassigned patents transferred to PAEs

PAEs often acquire patents in technological areas that will likely become strategically important for future markets. The increasing number of patent acquisitions in general and the acquisitions by PAEs in particular, hint to an increasing strategic use of cloud patents.

The results of the cloud patent analysis show that even cloud technologies, which are rather considered to fundamentally rely on shared environments following public standards are subject to increasing patent filings and patent acquisition activities.

About IPlytics

IPlytics Platform is an IP intelligence tool that augments the analysis of technology landscapes and a company’s competitive position. IPlytics Platform goes beyond patent data by linking and processing over 80 million patents to 60 million scientific articles, 2 million standards/SEPs and 3 million company information on one single platform. The tool helps users to perform analyses in the fields of patent valuation, landscaping, licensing, transfer or litigation. The intuitive graphical user interface allows to easily navigate, analyze and drill down into information, enabling in-depth technology analyses or a long-term monitoring of market segments.

IPlytics GmbH  Zossener Str. 55-58, Staircase D  10961 Berlin, Germany  +49 (0)30 5557 4282  Contact: Dr. Tim Pohlmann pohlmann@iplytics.com  www.iplytics.com

[1] Forbes 2016, “Roundup Of Cloud Computing Forecasts And Market Estimates, 2016”; Gartner 2016, “Gartner Says by 2020 “Cloud Shift” Will Affect More Than $1 Trillion in IT Spending”.

[2] Title_abstract_claims:((“cloud computing”~2) OR (“cloud computer”~2 ) OR (“cloud computers”~2) OR (“cloud server”~2) OR (“cloud servers”~2) AND (granted:(true))

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IAM magazine publishes study on Standard Essential Patents

IAM magazine standard essential patents

IAM magazine standard essential patents

The current January issue 75 of the IAM magazine has published an article on the landscape of standard essential patents. The study reveals the latest trends of patent files around standards using the IPlytics Platform tool.

Future technologies such as Internet of Things, smart cars, smart home and smart energy will increasingly rely on patented technology standards such as LTE, Wifi, NFC, RFID and Bluetooth. The number of patents that claim an invention on these standards is consequently constantly increasing. So called Standard Essential Patents (SEPs) can be extremely lucrative in terms of royalty income, but also in terms of being strong bargaining chips in cross-licensing negotiations. Accordingly, also the number of SEP litigation cases as well as the number of SEP transfer deals has been become more frequent. In recent years, standard essential patents are increasingly the subject of lively debate among market observers, but are they worth all the fuss?

standard essential patent trend

standard essential patent trend

Indeed, the IAM article provides evidence that declared SEPs are cited more often, are subject to larger patent families, are transferred more often and are litigated more frequently. While companies such as Qualcomm, Nokia and InterDigital still hold the largest SEP portfolios, emerging Asian companies such as Huawei, ZTE or Datang Mobile are catching up quickly. The analysis further confirms that declared SEP portfolios are by large still active and valid. Most of the declared SEPs either cite the relevant standards projects as prior art or are cited by other declared SEPs. Both measures indicate that declared SEPs have a close technical relationship with the respective standardized technology.

standard essential patent licensing

standard essential patent licensing

The study makes use of data from the IPlytics Platform tool, connecting information on:

  • 80 million world-wide patents documents
  • 2 million world-wide standards documents
  • 300,000 declared standard essential patents (licensing statement, FRAND commitment, reciprocity statement, etc.)
  • 450,000 patents referencing standard as prior art
  • 15,000 patents that are subject to a patent pools
  • 42,000 patents that are subject to US litigation

The article concludes with proving an action plan on how to deal with the interrelation of patents and standards. IPlytics CEO Tim Pohlmann states:

“The interplay between patents and standards is higher on the agenda than ever before. Senior managers and directors at patent-owning businesses which are active in fields where standards matter, or will matter in the future, should bear some key considerations in mind”:

  • The number of declared SEPs is constantly increasing. IP directors should consider royalty costs for products that comply with technology standards.
  • Not only has the number of declared SEPs been increasing, but so too have the number and diversity of rights holders. This is reflected in the increasing geographical variety of rights holders, as well as the increasing variety of business models. IP directors should conduct foresight screenings on the existence of relevant SEPs to identify possible licensing costs or legal problems at an early stage. The risk potential for the launch of new technologies or products can thus be quantified and valued during the early stages.
  • While litigation around declared SEPs is rising, the market for declared SEPs has evolved in recent years. Senior managers should bear in mind that buying SEPs may be a way to enter new markets. SEPs may be good bargaining chips in licensing negotiations, which could avoid costly court disputes.
  • The results of the analysis suggest that companies should pursue a common strategy for patenting and standardization in order to ensure that they are aware of the existence of SEPs and are exploiting patented inventions in technology fields where standards matter.
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IPlytics receives StarTUp label given by TU Berlin president Prof. Dr. Christian Thomsen

IPlytics was awarded with the StarTUp label at the 7th Alumni Angel Night of the Technical University of Berlin. The event took place in the center of the atrium of the University. For the 7th Alumni Angel Night nine companies were awarded with the startup label. At the event TU startups had the chance to present their solutions to investors, but also investors were able to present their strategy and interests in new business ideas. The networking event attracted young as well as established companies to mingle and exchange ideas. In this regard IPlytics had the chance to give a live presentation of its patent analysis, patent valuations, patent mapping, and patent landscaping solution IPlytics Platform.
IPlytics CEO Tim Pohlmann and Präsident Prof. Dr. Christian Thomsen

IPlytics CEO Tim Pohlmann and TU Berlin president Prof. Dr. Christian Thomsen

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IPlytics exhibits at the IP Service World Munich 2014

The IP Service World is Europe’s leading trade fair for IP management and IP products. This years exhibition took place in Munich and provided experts from around the world an ideal platform for information exchange and networking with internationally active IP service providers and enterprises. IPlytics presented new products and services at the exhibition booth. As a co-sponsor IPlytics moderated a roundtable discussion on the topic of patent value indicators. Furthermore CEO Dr. Tim Pohlmann gave a lecture on patent and standard information analysis in the age of Internet of Things. The interaction of patents and technology standards has increased in recent years and in particularly for new technology fields. IPlytics offers an online based patent analytics platform tool to analyze market developments, technology trends and a company’s competitive position for patenting and standardization. In this regard IPlytics integrates patent analysis, patent valuations, patent mapping, patent landscaping and a mapping of technology standards and products, such as an identification of standard essential patents, patent licensing terms or patent pools. IPlytics Platform helps companies making the right R&D investment decisions by providing actionable and trustworthy insights on relevant IP assets. A company that is interested in a certain technology is able to map all relevant patents to patent holders and standardized technologies. Current standardization projects are often an indicator of the development of future technologies and thus provide a vivid picture on how the market will evolve.

IPlytics on Patents and Standards for Internet of Things Technologies @IP Service World

IPlytics on Patents and Standards for Internet of Things Technologies @IP Service World

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Professor Blind and IPlytics CEO Tim Pohlmann discuss at the Standards Your Innovation Bridge Conference in Brussels

 

Professor Blind and IPlytics CEO Tim Pohlmann were invited speakers at the first EU Conference On Standards: Your Innovation Bridge hosted and organized by CEN/CENELEC in Brussels. The goal of the conference was bringing together experts from industry, research and policy organizations to explore and discuss the role of standards and patents in research and innovation. Several speakers presented their experiences in linking the patent and standard world to show how each one is benefiting from the other. Professor Blind Chairman of CEN-CENELEC STAIR, moderated Breakout Session 4 Horizon2020 and discussed how standards and innovation relate in the closing expert panel. The discussions revealed that standards and patents are two different tools with different goals and strengths. Knowing when to use which is key in understanding how to monetise research and development expenditures. In this regard IPlytics CEO Tim Pohlmann held a presentation on the topic: “Understanding the Interplay of Patents & Standards to Leverage Market Potential“.

Standards Your Innovation Bridge Conference Tim Pohlmann, Ged Owens and Laurent Tonnelier

Standards Your Innovation Bridge Conference (l. to r. Tim Pohlmann IPlytics GmbH, Ged Owens EPO and Laurent Tonnelier mobilead)

In the follow-up panel discussion Ged Owens from the European Patent Office and Laurent Tonnelier from mobilead discussed with Tim Pohlmann the future perspectives on the interplay of IPR and standards. Pohlmann’s presentation revealed that patents and standards more and more overlap. In this regard the number of standard essential patents has not only been increasing, but develops to be relevant for sectors beyond information and communication technologies (ICT). In view of the industry 4.0 (Internet of Things), companies are more and more challenged by critical technology investment decisions that concern standards and patents at the same time. In order to make the right technology investment decisions, an innovative company needs to identify which technologies will be relevant in the future, which technologies are protected by intellectual property rights and which standards or specifications are to be adopted. In this regard Laurent Tonnelier stated that “standard setting initiatives are mirrors of how technology will look like in the future. Very often companies participate in standard setting projects that are unrelated from their todays core businesses. This interest in developing a standard reflects a company’s interest in future technologies and related product markets.” Ged Owens further noted that “patenting and standardization are both tools to foster innovation”.

IPlytics is a Berlin based company that offers an online based patent analytics platform tool to analyze market developments, technology trends and a company’s competitive position for patenting and standardization. IPlytics Platform integrates patent analysis, patent valuations, patent mapping, patent landscaping and a mapping of technology standards and products, such as an identification of standard essential patents, patent licensing terms or patent pools. IPlytics Platform helps companies making the right R&D investment decisions by providing actionable and trustworthy insights on relevant IP assets.

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Blind and Pohlmann publish LES Article of the Month

Just today, the Licensing Executives Society International (LES International) announced to publish Knut Blind’s and Tim Pohlmann’s article on trends for standard essential patents as the article of the month. LESI is a not for profit and non-political umbrella organization having 32 national and regional member societies, interested in technology transfers or licensing of intellectual property rights. LESI publishes a quarterly journal called les Nouvelles. The journal is designed to advance the knowledge of the LESI members and others in improving their skills, techniques and knowledge in licensing and protecting Intellectual Property.

Blind and Pohlmann publish LES Article of the Month

Blind & Pohlmann, LES Nouvelles Article of the Month March 2014

Blind and Pohlmann have been asked to write an article about new trends in the area of patents that read on technological standards. In this regard Blind and Pohlmann have founded the company IPlytics that builds up data on over 80 million patents, over 300,000 patent declarations, over 1,5 million standard documents and about 900 standards organizations.  IPlytics offers an online based patent analytics platform tool to analyze market developments, technology trends and a company’s competitive position for patenting and standardization. IPlytics Platform integrates patent analysis, patent valuations, patent mapping, patent landscaping and a mapping of technology standards and products, such as an identification of standard essential patents, patent licensing terms or patent pools. IPlytics Platform helps companies making the right R&D investment decisions by providing actionable and trustworthy insights on relevant IP assets.

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IPlytics CEO Tim Pohlmann at the law and economics meeting for patenting in ICT markets

The German law and economics association GRUR invited experts on the topic of patent thickets, patent litigation and the role of standard essential patents (SEPs) in antitrust issues. The main discussion dealt with the question on how to treat standard essential patents in court cases e.g. if courts should grant an injunctions for SEPs. In this regard standard essential patents play a special role since companies that contribute to standard setting and get their patented solutions integrated in a worldwide adopted standard may abuse their monopoly power by being able to block whole technologies. One decision where a German court granted an injunction for an SEP last year has made the case to trigger this discussion. Back then Apple had to stop sales of its iPads and iPhones that use LTE technologies patented by Motorola. IPlytics CEO Tim Pohlmann and colleagues from the TU Berlin and CERNA ParisTech have conducted an EU study on patents that read on technology standards in 2011. A follow on study will be publish next year.

KIT  Tagung Patente und Standards

KIT Tagung Patente und Standards

Other topics discussed at the meeting dealt with the increasing litigation cases during the last years. In Europe, Germany has one of the most popular court systems for companies to fight on patent infringement. The experts especially saw problems due to an increase of patenting in general, broad patent claims and an increasing appearance of so called patent trolls that make use of opportunistic strategies to enforce patent rights. IPlytics CEO Tim Pohlmann presented first data analysis of the patent analysis tool Open Patents and Standards Platform (OpenPSP). By increasing transparency on patents for certain markets, IPlytics aims to help companies to strategically make use of patents and technology standards.

 

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IPlytics wins ICT innovation prize 2013

Dr. Tim Pohlmann is currently busy trying to transfer the subject of his doctoral thesis into the business model of his startup IPlytics. The idea is to develop a market intelligence tool that analyzes market developments, technology trends and patenting on a single, unified platform called OpenPSP. The awarding of IPlytics for this year’s ICT-innovation prize shows that this business idea has a lot of potential. Tim Pohlmann together with his team received the award today at the International Consumer Electronics Fair (IFA) in Berlin. With the ” ICT Innovation Prize” the BMWi awards the best business plans out of more than 300 applications. The Federal Ministry of Economics and Technology (BMWi) supports startups that have innovative ideas for information and communications technologies (ICT).

 IPlytics small(von links: IPlytics team and Stefan Schnorr (BMWi)

Berlin Startup IPlytics increases transparency in the patent thicket!

In recent years, numerous patent disputes have caused damages and menace to many industries. Only this year Apple had to temporarily stop the selling of its iPhones and iPads in Germany over the patent dispute with Motorola. Just a few month ago, the Samsung Galaxy Tab was banned to be commercialized in the whole European market on the basis of patent infringement.

When companies fight for patent infringement quite often hundreds of million Dollars are at stake. However, not all companies have the means to fight in court. Many innovative firms thus state that there is a need for transparency in the dense thicket of patents to prevent patent disputes beforehand.

The Berlin-based startup IPlytics has taken on the task to shed light on the patent thicket. Several years of research at Professor Knut Blind’s Chair of Innovation Economics have brought up new methods for measuring and understanding patent activities in the ICT sector. IPlytics’ market analysis combines economic methods with IT-driven algorithms to process new information on R&D activity, technology trends and market developments. The main product and service of Iplytics is the online platform OpenPSP (Open Platform Patents and standards ). OpenPSP is an online platform that collects and connects current data on patents, products and technology standards with the help of web robots. OpenPSP makes use of data sources that are often freely available in the Internet, but distributed all over the web and difficult to access. With the help of data processing technologies OpenPSP provides its users structured up-to-date information on one single unified platform. The data linking is based on new methods of economic correlation, regression and indicator analysis and combines them with text mining algorithms. OpenPSP is thus the first solution that is able to connect patent data with technical standards, as well as with market-specific information.

In recent years, especially Germany has developed to be an arena of patent litigation. The German patent system is seen as patent holder friendly with a high likelihood of patent enforcement. However, the innovative SME sector feels threatened by the increasing number of patent litigation. Quite frequently, so called patent trolls buy up German patent portfolios to sue for patent infringement in entire industries. Nevertheless, the infringement of patents in the IT industry is in many cases unintentional. The scope of patents is often very wide and patent infringement is difficult to detect in the dense thicket of patent claims. Though, once a company has established its product on the market it is often too late to late to row back. Companies should therefore conduct precautionary measures in advance.

Intelligent patent software solutions save lengthy searches and help innovative companies to hedge early. IPlytics provides a new service to support a company’s innovation and technology management. OpenPSP increases transparency on market developments and on the existence of patents, standards and technologies. Foresight screenings of patenting and standard setting help companies to identify possible licensing cost or legal problems in early periods. The risk potential for the launch of new technologies or products can thus be quantified and valued in early stages.

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WIPO Egypt Mission: Exploring the effect of IPR on Egypt’s ICT sector

Our competence team, Professor Knut Blind (TU Berlin / Fraunhofer FOKUS), Dr. Sacha Wunsch-Vincent (WIPO) and Dr. Tim Pohlmann (TU Berlin / MINES ParisTech) just returned from a very successful mission to Cairo, Egypt. The goal of the mission was to meet with local authorities, companies, start-ups or Universities and discuss how Intellectual Property Rights (IPRs) influence Egypt’s ICT (Information and Communication Technology) industry. Egypt already has numerous programs to fund innovative programs such as University-Industry collaborations, training of young students or funding of start-up projects. Our mission showed that Egypt has a high number of talented and well educated young citizen that have good language skills, qualified University degrees and a very innovative mind.

8495416664_cc9d5d9551_h

In terms of IP however, there is still a lack of awareness. Different systems to register ideas or software co-exist to the patent office or the still separated trade mark office. Most young entrepreneurs have little knowledge about how to protect their innovations which in some cases even led to a notion of hiding ideas and avoiding openness. Also the Egyptian market still seemed to be not lucrative in terms of technology rivalry. Most firms and especially multinational entities (MNEs) file patents abroad, even though the innovation was initially created and developed in Egyptian labs.

The ministry of ICT as well as several public organizations, local and international firms are located in the smart village, a high-tech business center. The smart village occupies an area of 450 Feddans (units), including communication center buildings, business service centers, conference centers, and technological incubator centers. Today the smart village constitutes an attractive location for ICT businesses, becoming a focal point for over 500 corporations and over 100,000 employees.

Foto (2)

The initiative of the project

There is great interest in better understanding the effects of intellectual property (IP) protection in developing countries, both on specific measures of social and economic performance and on the economic development process more broadly. Many economists have argued against a “one-size-fits-all” approach in designing and implementing an IP regime. At the same time, national policymakers in developing countries lack credible empirical guidance in tailoring their IP systems to national capacities and needs. This is in considerable contrast to developed countries, where national IP offices, other branches of government, and academic economists have produced insightful evidence on the economic implications of different dimensions of IP protection.

To respond to the need for more empirical research, Members of the World Intellectual Property Organization (WIPO) Committee on Development and Intellectual Property (CDIP) have initiated a Project on Intellectual Property and Socio-Economic Development that consists of a series of economic studies seeking to narrow the knowledge gap facing policymakers in developing countries.

The goal of the project

Under this CDIP project, the government of Egypt, via the Ministry of Communication and Information Technology (MCIT), has requested the Chief Economist to assess the Economic Impact of Intellectual Property in the ICT Sector in Egypt. Broadly speaking the research question is concerned with “How IP impacts ICT innovation in Egypt”. A firm survey will be designed to collect information related to IP aiming to study closely the current situation in Egypt, and identifying the positive and negative impacts of IP on firms in the ICT sector, and determining the channels through which these impacts take place.



[1] See Document CDIP/5/7, available at http://www.wipo.int/meetings/en/doc_details.jsp?doc_id=131717.

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ITU Patent Roundtable

The ITU (International Telecommunication Union) has for the first time organized a public event to discuss the tensions on the interplay of IPR and standards (ITU Patent Roundtable). The ITU is a UN agency which is among other standard projects responsible for the H.264 video coding standard (MPEG4). The ITU invited all interested parties, mostly from the ICT industry (Apple, Motorola Mobility, Qualcomm, Microsoft, Google, Nokia, Ericsson, etc.) but also from international organizations (EPO, USPTO, WIPO, EC, DOJ or FTC) and academia (Knut Blind, Tim Pohlmann, Rudi Bekkers and Robert Barr) to discuss recent disputes on SEPs (standard essential patents) and F/RAND licensing. In light of recent litigation on SEPs (Apple vs. Samsung, Motorola vs. Microsoft and Motorola vs. Apple) the main topic of the conference was to discuss if the F/RAND licensing of SEPs is a broken system.

Injunctive relief and SEPs:

One major topic dealt with the question if SEP holders should be allowed to impose injunctions if possible licensors are not willing to pay a reasonable license. The notion of antitrust authorities (DOJ or the DG competition) is very clear: A F/RAND commitment should be a constrain to injunctive relief. Someone who commits to license under F/RAND and then refuses to licenses just requests higher fees. Injunctions would thus be a vehicle to increase royalties. SSOs which select patented technologies as an industry wide standards give the right holder a certain market power. In the view of antitrust authorities the market for a SEP license is a market of its own. Thus, SEP holders would have a monopoly market power. F/RAND is a mechanism to constrain market power. While F/RAND may constrain injunctive release the question is how to constrain? The antitrust authorities further stated that circumstances where injunctions are possible should be narrow and only be an option to licensees that are not willing to pay at all. Also, even the possibility to impose an injunction could increase royalties even in the absence of a court decision. These fees would then also be subject to an anticompetitive price.

While these statements seem to leave little room for interpretation the situation is often more complex. First of all firms that declare their essential patents to SSOs (Standard Setting Organizations) in most cases do not commit to license under F/RAND but only state that they are prepared to grant a license or that they will enter license negotiations in good faith to offer FRAND terms (e.g. as to the ETSI IPR policy). While in the US most courts would not allow injunctions for SEPs, the situation in Europe is very different (see the injunctive relief decision of a Munich court in the case of Motorola vs. Apple). It seems that there is no legal certainty and courts may decide on a case by case basis which may even result in different decisions between countries. Some of the participating firms requested more precise IPR policies of SSOs to answer the question: To what extent can we say there is willingness to enter negotiations? It must be more than a statement it must be a FRAND offer! However the fear is that some companies would not participate in standard setting when the enforcement of SEPs is limited upfront.

The discussion showed that firms face a complex system of different SSOs and different policies. There seemed to be a need for a basic level of common understanding since it is often difficult to interpret what SSOs’ IPR policies actually mean.

Current situation and future development of F/RAND:

The second part of the discussion dealt with the F/RAND system in general. Most of the participants actually agreed that the F/RAND system is not a broken system and works very well even though F/RAND may not be a very specific contract. There are many examples of successful license agreements under the name of F/RAND and many examples of successful standard setting in light of high patenting (GSM, UMTS, WiFi, etc.). However, there are many recent challenges due to drastic changes of the business environment. While standard setting in the early 90ies was done by a couple of big players that all had similar incentives and business models, the market has changed in recent years. New market participants who license SEPs may not earn money from selling devices to payments from phone calls, but make returns from patent license, advertisement or constructive applications. It is thus increasingly difficult to determine a reasonable license and to determine if fees should be measured to a unit, a component or a whole product. Many firms however demand for a common understanding of F/RAND. The opinion of the ITU is to not intervene in bilateral license negotiation but that a clarification could be a significant contribution of ITU. The ITU wants to take a lead to promote effective RAND and to provide a neutral platform to facilitate discussion on F/RAND where all members have equal rights.

Reasons for an increase of SEP litigation:

Litigation is very costly for all involved parties and will only be pursued if the technology or product in question has a certain value. One reason of increasing SEP litigation thus is the increasing importance of ICT standards. ICT products increasingly rely on technology standards (e.g. the UMTS, LTE standard or the Wifi standard to allow faster internet connections) to ensure interoperability. Thus technology components often indispensably work together and as a result may even lead to an interrelation of SEP and non-SEP.

In recent years standards setting has evolved from a mere coordination on common specifications to the joint development of complex technology platforms. Firms promote their best and most innovative solution to be accepted as an industry wide standard and SSOs select best quality technologies (patents). Competition thus also takes place at the standard setting level. Increasing competition may result in more litigation.

Another reason is the increase of essential patents and the increase of multiple rights holders in general. However, in most cases the increase of essential patents is due to an increased in the number of standards that are subject to essential patents, not to an increase of patents per standard. This means there is an increasing demand for technology standards in the market.

A further reason is that SEPs are increasingly transferred due to trades of patents, patent portfolios (Nortel auction) or whole companies (Motorola Mobility). Recent examples are: Ericsson sold SEPs to Research in Motion, Nokia sold SEPs to MOSAID, Sisvel and Vringo, IPcom acquired Robert Bosch SEPs, Highpoint acquired SEPs originating from AT&T, and HTC acquired SEPs from both Google and Hewlett Packard. Acacia acquired SEPs from Adaptix, Intel acquired SEPs(?) from InterDigital, and Apple acquired SEPs from Novell. Intellectual Ventures teamed with NVIDIA to acquire SEPs from IPWireless.

The change of patent ownership changes cross licensing agreements. Firms may find themselves in the position to suddenly pay more for the same patents compared what they have been paying before. Cases of disagreement may lead to litigation (Motorola vs. Microsoft).

Furthermore the ICT industry is subject to short product life cycles where market players and market shares have changed in a quick manner in the last ten years. Standard setting however is a long term process. In many cases incumbent firms hold the largest number of SEPs, while their market share decreases (e.g. Nokia, Microsoft, etc.). Litigation may thus be subject to a clash of long terms versus short term investments.

The main question however remains: Is patent litigation a sign for increasing competition or a sign for future problems?

The workshop triggered some very interesting and important discussions, however failed to really formulate the problems that may be at play. It has however to be mentioned that many of the participating firms are currently in litigation and are thus not able to state their opinion in public. There are many disputes, discussion and workshops to come to find the answers of many of the discussed questions.

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