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11.29.17

IAM Celebrates (With the Patent Cartel) a System of Unjust Monopolisation of Industry Standards Through Unethical Patent Thickets

Posted in Asia, Europe, Patents, RAND, Standard at 7:55 pm by Dr. Roy Schestowitz

Many of these are software patents

ITU Microsoft

Summary: Once again, quite frankly as usual, lobbying by large corporations pays off and companies that are not multi-billion dollar entities will suffer for they cannot participate in the market (anticompetitive patent thickets)

THE policy regarding patents in China has made Asia increasingly friendly to patent trolls. Korean and Japanese companies, for example, are being dragged into Chinese courts (much of their production was outsourced to factories in mainland China).

Days ago we saw IAM saying that “NPEs [patent trolls] armed with former [Chinese] Huawei and [European patent troll] Sisvel patents attack [Korean] Samsung in China, in possible privateering campaigns”. Well, “privateering” is putting it far too politely. The word they’re looking for is trolling. The patent arsenal from Europe now travels to China, the most fertile ground for patent trolls, in order to attack Samsung, one of the world’s biggest technology companies. “An article published in China,” IAM writes, “has turned up two previously unreported patent infringement suits against Samsung in the country’s courts, both filed this year. In one case, an apparent Chinese NPE is asserting a patent formerly owned by Huawei against the South Korean company. In the other, a Texas NPE is suing Samsung with a former Sisvel patent. Taken together, the cases indicate that there may be much more NPE activity – foreign and domestic – than meets the eye in China.”

Further down SIPO is mentioned. To quote: “Li further reports that Samsung challenged both patents before SIPO’s Patent Reexamination Board (PRB), which evidently upheld the Dunjun patent, while invalidating the Dual Sim patent. Both decisions can, of course, be appealed.”

What we are seeing here is actualisation of our predictions. Does China want to be known for patent trolls or for manufacturing (or both)?

Meanwhile, the Japanese government, according to this IAM blog post, recognises the problem with SEPs (standard-essential patents), not just with trolls. One should refrain from using the terms FRAND or SEP. They basically masquerade or conceal an anticompetitive injustice that’s hinged on patents. Here is what IAM wrote:

The ADR scheme was also described by the government as a “licensing award system for SEPs”. In short, it proposed that when two parties could not agree on an SEP licence agreement, the prospective licensee would be able to request mediation by the JPO, which would determine a FRAND royalty rate in a mandatory process, “with due care of not unfairly haring the interests of the patent holders”. Major global rights owners raised numerous objections, branding it as a form of compulsory licensing.

This has become a hot topic because companies like Qualcomm, which IAM again glorified a few days ago, want to create industry standards everyone must pay Qualcomm to merely implement. There are many software patents in the mix, even though such patents are no longer potent anywhere but China.

As Benjamin Henrion stated earlier today: “After the glyphosate, another vistory of (patent) lobbyists is to remove the “licence for all” from the Commission FRAND paper, and to insult Open Source licensing…”

The context to all this was a stream of IAM tweets that said: “Commission Communication on SEP licensing has now been published. On a first, skim, read it looks like SEP owners have got most of what they could have reasonably hoped for [] There doesn’t seem to be any prescriptions about what kind of licensing approach should be followed – ie no mention of the “license for all” regime that implementers were calling for. This is crucial. Looks like SEP owners have got their way. [] If detailed reading of the SEP licensing Communication confirms the initial impression, there has bene a big turnaround in the Commisison [sic] over th elast two weeks. SEP owners will be celebrating.”

IAM’s chief, Joff Wild, later wrote this blog post about it (updated throughout the evening). It is very disappointing that the European Commission seems to be in bed with the patent cartel/thickets, basically the likes of Qualcomm which it’s supposed to investigate. To quote Wild:

The European Commission’s long-awaited Communication on the licensing of standards essential patents was finally published this morning and, on an initial read, it looks like SEP owners have a fair amount to be pleased about – especially given how things were looking a couple of weeks back, when it seemed as if extensive lobbying from the implementer side was about to bear fruit. A subsequent delay in agreeing the final text of the Communication provided a hint that implementers might not get all they were after and today’s publication seemingly confirms that.

[...]

My guess is that SEP owners are going to be feeling a great deal of relief today. The Commission has acknowledged that while the rapid and efficient diffusion of technology at the lowest cost possible is vital, those who do the innovating need to be incentivised to carry on – and that means they have to feel they will receive adequate reward for the investments they make.

Is this any worse than the Commission turning a blind eye to EPO abuses?

Writing behind a paywall IP Watch has covered this as well (under the headline “European Commission Announces Guidance On Copyright Enforcement, SEP Licensing”).

To quote:

The European Commission today announced plans to ratchet up the fight against counterfeiting and piracy, and to introduce more clarity in licensing standard-essential patents (SEPs). The first involves guidance on the 2004 EU directive on the enforcement of intellectual property rights (IPRED); the second recommendations for making the relationship between patent owners and technology users more “balanced and efficient.”

The likes of Qualcomm certainly got their way here; interesting timing given the immense scrutiny this company comes under. Earlier today we learned that Apple has just countersued Qualcomm for patent infringement [1, 2, 3], further escalating a long battle against the SEP cartel set up by Qualcomn. It is very disappointing to see that in addition to the constant deception from sites like IAM we have public officials who play along with patent cartels and protectionism. They really ought to know better. Corporate lobbyists got their way again. IAM gave them a platform (we covered that).

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