Abstract

The mobile evolution has transformed into a digital revolution. People around the world, along with hundreds of objects surrounding them, will be connected to networks as well as to one another, through significantly faster, more robust and secure wireless communications. A range of industrial sectors will ride on this transformative digital wave, from automotive, healthcare and energy, to urban infrastructure, agriculture and entertainment. To facilitate this inevitable change, reliable networks running on technology standards enabling them, will be needed. This brings to center stage the critical role of the patent system that incentivizes technology innovation, and the antitrust laws that ensure that market competition facilitating innovation is safeguarded. It is no secret that SSOs have played a key role in changing the landscape of the information and technology industry; their membership comprising of Standard Essential Patent (SEP) holders on one hand and implementers on the other. While the SEP holders are involved in research & development (R&D) and look to maximize their earnings from licensing out their SEPs, the implementers look to seek licenses from SEP holders on terms that are Fair, Reasonable and Non-Discriminatory (FRAND), in order to use the patented technology in the manufacturing of standard-compliant end-use products. However, at least in theory, an SEP holder can always engage in opportunistic behaviour in charging higher royalties from the implementer for licensing out the technology once the technology is locked into a standard, than the real worth of the technology at the time of creation of the standard by the SSO. It was to address these concerns that the Institute of Electrical and Electronics Engineers introduced a few changes to their IPR policy in early 2015.

Highlights

  • The mobile evolution has transformed into a digital revolution

  • Shapiro has said that ‘[t]he need to navigate the patent thicket and hold-up is especially pronounced in industries such as telecommunications and computing in which formal standard setting is a core part of bringing new technologies to market.’34 once the technology involving patents is locked into a standard and investments towards the development of standard compliant products have been made, working around the technology, or switching over to an alternative may become difficult for the technology implementers, leading to an increase in the bargaining power of the standard essential patent (SEP) holders

  • The patent policy was a series of important developments that eventually led to the changes to the patent policy being implemented by IEEE. It started off with the IEEE’s attorney highlighting the insufficiency of the 2007 patent policy in dealing with the problem regarding the vagueness of FRAND—especially since the SEP holders had only twice made use of the opportunity to disclose the most restrictive terms—out of a possible forty occasions in which an Letter of Assurance (LoA) committing to license on FRAND terms was issued.57. This was followed by the Board of Governors of IEEE-SA giving its approval to the changes in December 2014.58 in February 2015, the Antitrust Division of the US in a Business Review Letter sent by the Department of Justice (DOJ) to the IEEE, communicated their intent to not

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Summary

Introduction

The mobile evolution has transformed into a digital revolution. People around the world, along with hundreds of objects surrounding them, will be connected to networks as well as to one another, through significantly faster, more robust and secure wireless communications. A range of industrial sectors will ride on this transformative digital wave, from automotive, healthcare and energy, to urban infrastructure, agriculture and entertainment To facilitate this inevitable change, reliable networks running on technology standards enabling them, will be needed. The SSOs formed in the US are best considered ‘quasi-formal’ groups that are typically large, international organizations that ‘share many of the characteristics of formally-recognized groups.’ Their significance is to enable virtually all products on which people depend in modern society to interoperate with one another and to encourage informed consumer choice, higher efficiency, and further innovation.

Importance of Standards Setting
IEEE-SA 2015 IPR Policy Change and the WiFi Standard
Developments Leading to the IEEE-SA’s IPR Policy Change
Key Changes to the IEEE IPR Policy
Royalty Rate
Injunctive Relief
Reciprocal Licensing
Major Reactions to the IPR Policy Changes
Policy Implications and the Post 2015 Era at IEEE
Shift in US Antitrust Enforcement vis-à-vis SSO IPR Policies
Findings
Conclusion

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