Standards and Patent Pools: 2007 and Beyond LEI 25 th  Annual CLE Conference Vail, Colorado January 9, 2008 Gil Ohana Wilm...
What We’ll Discuss <ul><li>2007: Year in Review </li></ul><ul><ul><li>Cases  </li></ul></ul><ul><ul><li>Antitrust Policy <...
2007: Year in Review Cases Ohana, LEI Conference, Jan. 9, 2008, Page  <ul><li>Qualcomm v. Broadcom </li></ul><ul><li>TrueP...
2007: Year in Review Qualcomm v. Broadcom */ Ohana, LEI Conference, Jan. 9, 2008, Page  */   Qualcomm Inc. v. Broadcom Cor...
2007: Year in Review Qualcomm v. Broadcom Ohana, LEI Conference, Jan. 9, 2008, Page  <ul><li>JVT patent disclosure form im...
2007: Year in Review TruePosition v. Andrew Corp. */ Ohana, LEI Conference, Jan. 9, 2008, Page  */   True Position, Inc. v...
2007: Year in Review TruePosition v. Andrew Corp. Ohana, LEI Conference, Jan. 9, 2008, Page  <ul><li>Andrew asserts affirm...
2007: Year in Review TruePosition v. Andrew Corp. Ohana, LEI Conference, Jan. 9, 2008, Page  <ul><li>On motion for summary...
2007: Year in Review TruePosition v. Andrew Corp. Ohana, LEI Conference, Jan. 9, 2008, Page  <ul><li>Andrew argues that Tr...
2007: Year in Review MPEG-LA v. Alcatel-Lucent */ Ohana, LEI Conference, Jan. 9, 2008, Page  */   MPEG-LA LLC v. Alcatel L...
2007: Year in Review MPEG-LA v. Alcatel-Lucent Ohana, LEI Conference, Jan. 9, 2008, Page  <ul><li>According to complaint: ...
2007: Year in Review Golden Bridge v. Nokia */ Ohana, LEI Conference, Jan. 9, 2008, Page  */   Golden Bridge Technology, I...
2007: Year in Review Golden Bridge v. Nokia Ohana, LEI Conference, Jan. 9, 2008, Page  <ul><li>Ruling on motion to dismiss...
2007: Year in Review Golden Bridge v. Nokia Ohana, LEI Conference, Jan. 9, 2008, Page  <ul><li>On summary judgment, Judge ...
2007: Year in Review Broadcom v. Qualcomm */ Ohana, LEI Conference, Jan. 9, 2008, Page  */   Broadcom Corp. v. Qualcomm, I...
2007: Year in Review Broadcom v. Qualcomm Ohana, LEI Conference, Jan. 9, 2008, Page  <ul><li>District Court Opinion: Rulin...
2007: Year in Review Broadcom v. Qualcomm Ohana, LEI Conference, Jan. 9, 2008, Page  <ul><li>Third Circuit Reverses </li><...
2007: Year in Review Broadcom v. Qualcomm Ohana, LEI Conference, Jan. 9, 2008, Page  “ We hold that (1) in a consensus-ori...
2007: Year in Review Antitrust Policy Ohana, LEI Conference, Jan. 9, 2008, Page  <ul><li>SDOs respond to concern with “hol...
2007: Year in Review Antitrust Policy Ohana, LEI Conference, Jan. 9, 2008, Page  <ul><li>VITA Letter (October 2006) and IE...
2007: Year in Review Antitrust Policy Ohana, LEI Conference, Jan. 9, 2008, Page  <ul><li>April 2007 Joint DOJ/FTC IP repor...
2008 and Beyond Events Ohana, LEI Conference, Jan. 9, 2008, Page  <ul><li>DC Circuit hears Rambus’ */  appeal of Federal T...
2008 and Beyond Predictions Ohana, LEI Conference, Jan. 9, 2008, Page  <ul><li>More cases:  </li></ul><ul><ul><li>Standard...
Best Practices Patent Disclosure Issues Ohana, LEI Conference, Jan. 9, 2008, Page  <ul><li>Periodic company inventory of s...
Best Practices Patent Disclosure Issues Ohana, LEI Conference, Jan. 9, 2008, Page  <ul><li>Standards Diligence for Acquisi...
Best Practices Training for Participants Ohana, LEI Conference, Jan. 9, 2008, Page  <ul><li>Both “defensive” and “offensiv...
Standards and Patent Pools: 2007 and Beyond Questions? Gil Ohana Wilmer Cutler Pickering Hale and Dorr Palo Alto, CA +1 65...
Standards and Patent Pools: 2007 and Beyond For copy of presentation and all materials cited, please send e-mail to: [emai...
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Gil Ohana - Standards and Patent Pools

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Gil Ohana - Standards and Patent Pools

  1. 1. Standards and Patent Pools: 2007 and Beyond LEI 25 th Annual CLE Conference Vail, Colorado January 9, 2008 Gil Ohana Wilmer Cutler Pickering Hale and Dorr LLP Palo Alto, CA +1 650 858 6025 [email_address]
  2. 2. What We’ll Discuss <ul><li>2007: Year in Review </li></ul><ul><ul><li>Cases </li></ul></ul><ul><ul><li>Antitrust Policy </li></ul></ul><ul><li>2008 and Beyond </li></ul><ul><li>Best Practices for Standards Development </li></ul>Ohana, LEI Conference, Jan. 9, 2008, Page
  3. 3. 2007: Year in Review Cases Ohana, LEI Conference, Jan. 9, 2008, Page <ul><li>Qualcomm v. Broadcom </li></ul><ul><li>TruePosition v. Andrew </li></ul><ul><li>MPEG-LA v. Alcatel Lucent </li></ul><ul><li>Golden Bridge v. Nokia </li></ul><ul><li>Broadcom v. Qualcomm </li></ul>
  4. 4. 2007: Year in Review Qualcomm v. Broadcom */ Ohana, LEI Conference, Jan. 9, 2008, Page */ Qualcomm Inc. v. Broadcom Corp., No. 05-CV-1958B (S.D. Cal., March 21, 2007). Wilmer Hale represents Broadcom. <ul><li>Qualcomm sues Broadcom for infringing two video </li></ul><ul><li>compression patents </li></ul><ul><li>Judge rules patents “reasonably may be essential” </li></ul><ul><li>to implement H.264 video streaming standard </li></ul><ul><li>Broadcom asserts waiver as affirmative defense </li></ul><ul><ul><li>Defense based on Qualcomm’s failure to disclose </li></ul></ul><ul><ul><li>patents to JVT working group </li></ul></ul>
  5. 5. 2007: Year in Review Qualcomm v. Broadcom Ohana, LEI Conference, Jan. 9, 2008, Page <ul><li>JVT patent disclosure form imposes on participants broad obligation to disclose patents “associated with” or “affecting the work of” JVT </li></ul><ul><li>Judge rules that Qualcomm participated in JVT, but failed to disclose patents </li></ul><ul><li>Jury advises, and Judge decides, that Qualcomm waived right to enforce patents based on failure to disclose. </li></ul>
  6. 6. 2007: Year in Review TruePosition v. Andrew Corp. */ Ohana, LEI Conference, Jan. 9, 2008, Page */ True Position, Inc. v. Andrew Corp., 507 F.Supp.2d 447 (D. Del. 2007). <ul><li>TruePosition holds patents on technology for locating cell phone user based on triangulation between multiple base stations </li></ul><ul><li>Andrew makes cell towers and related infrastructure </li></ul><ul><li>TruePosition sues Andrew for patent infringement </li></ul>
  7. 7. 2007: Year in Review TruePosition v. Andrew Corp. Ohana, LEI Conference, Jan. 9, 2008, Page <ul><li>Andrew asserts affirmative defenses and counterclaims based on TruePosition’s conduct at ETSI, leading standards body for cellular technology based on GSM standard </li></ul><ul><ul><li>Fraud </li></ul></ul><ul><ul><li>Unfair Competition (California Bus. & Prof. Code § 17200 et seq.) </li></ul></ul><ul><ul><li>Equitable and promissory estoppel </li></ul></ul><ul><ul><li>Implied license </li></ul></ul>
  8. 8. 2007: Year in Review TruePosition v. Andrew Corp. Ohana, LEI Conference, Jan. 9, 2008, Page <ul><li>On motion for summary judgment, Judge rules common law and unfair competition claims are not preempted by Federal patent law </li></ul><ul><ul><li>Allegation goes to bad faith conduct in the marketplace, not before PTO </li></ul></ul><ul><ul><li>Preemption decision consistent with other rulings in Delaware ( e.g., Nokia v. Qualcomm ) and elsewhere ( Samsung v. Ericsson (E.D. Tex.)) </li></ul></ul>
  9. 9. 2007: Year in Review TruePosition v. Andrew Corp. Ohana, LEI Conference, Jan. 9, 2008, Page <ul><li>Andrew argues that TruePosition failed to disclose essential patent as required by ETSI rules. TruePosition responds that it could not know whether or not non-infringing alternatives existed </li></ul><ul><ul><li>Judge rejects TruePosition argument as inconsistent with its claim for lost profits, which is premised on absence of non-infringing alternatives </li></ul></ul><ul><ul><li>TruePosition “cannot have its cake and eat it too.” </li></ul></ul>
  10. 10. 2007: Year in Review MPEG-LA v. Alcatel-Lucent */ Ohana, LEI Conference, Jan. 9, 2008, Page */ MPEG-LA LLC v. Alcatel Lucent, Delaware Chancery Court ((New Castle County), filed October 29, 2007) <ul><li>MPEG-LA manages patent pool formed to hold patents essential to implement MPEG family of video compression standards </li></ul><ul><li>Alcatel and Lucent both hold essential patents </li></ul><ul><li>Alcatel joins pool, Lucent does not </li></ul><ul><li>Alcatel acquires Lucent </li></ul>
  11. 11. 2007: Year in Review MPEG-LA v. Alcatel-Lucent Ohana, LEI Conference, Jan. 9, 2008, Page <ul><li>According to complaint: </li></ul><ul><ul><li>MPEG patent pool contributors agree to place after-acquired patents into pool </li></ul></ul><ul><ul><li>To avoid effect of this provision, shortly before Alcatel’s purchase of Lucent closes, Lucent puts its essential patents into a trust </li></ul></ul><ul><li>MPEG-LA sues to require Alcatel to comply with commitment it made to MPEG-LA to contribute after-acquired patents to pool. </li></ul>
  12. 12. 2007: Year in Review Golden Bridge v. Nokia */ Ohana, LEI Conference, Jan. 9, 2008, Page */ Golden Bridge Technology, Inc. v. Nokia Inc., No. 6:06-CV-163 (E.D. Tex., Sept. 11, 2007) <ul><li>Golden Bridge Technology (GBT) developed and patented a new technology (CPCH) for cell phones </li></ul><ul><li>GBT joined 3GPP, developer of WCDMA 3 rd Generation cellular standard </li></ul><ul><li>CPCH first included as an optional feature of the standard, then removed </li></ul><ul><li>GBT alleges that removal of CPCH caused by conspiracy of companies seeking to avoid licensing GBT patents </li></ul>
  13. 13. 2007: Year in Review Golden Bridge v. Nokia Ohana, LEI Conference, Jan. 9, 2008, Page <ul><li>Ruling on motion to dismiss, Judge rules that facts Golden Bridge alleged could be per se violation of Sherman Act </li></ul><ul><ul><li>Group boycott would “always or almost always tend to restrict competition and decrease output” </li></ul></ul><ul><ul><li>Exclusion from standard means exclusion from market </li></ul></ul><ul><li>Decision on motion to dismiss causes concern in standards development community </li></ul><ul><ul><li>Suggests that any decision to exclude particular technology from standard can be basis for antitrust liability </li></ul></ul>
  14. 14. 2007: Year in Review Golden Bridge v. Nokia Ohana, LEI Conference, Jan. 9, 2008, Page <ul><li>On summary judgment, Judge rules: </li></ul><ul><ul><li>No factual evidence of agreement between 3GPP participants to remove CPCH </li></ul></ul><ul><ul><li>Decision to remove CPCH made using open, transparent, consensus-based processes </li></ul></ul><ul><li>But, Judge refuses to revisit earlier application of per se liability standard </li></ul><ul><ul><li>Motion to dismiss decision may be used by “losers” in standards development process to argue that “winners” conspired to reject their technology </li></ul></ul>
  15. 15. 2007: Year in Review Broadcom v. Qualcomm */ Ohana, LEI Conference, Jan. 9, 2008, Page */ Broadcom Corp. v. Qualcomm, Inc., 501 F.3d 297 (3d. Cir. 2007). Wilmer Hale represents Broadcom. <ul><li>Facts: </li></ul><ul><ul><li>Qualcomm claims to own patents essential to implement 3G wireless standard (UMTS) </li></ul></ul><ul><ul><li>Under ETSI rules, Qualcomm committed to license patents on fair, reasonable, and non-discriminatory (FRAND) terms </li></ul></ul><ul><li>Dispute: </li></ul><ul><ul><li>Broadcom alleges that Qualcomm monopolized technology markets for UMTS by falsely promising to license its putatively essential patents on FRAND terms </li></ul></ul>
  16. 16. 2007: Year in Review Broadcom v. Qualcomm Ohana, LEI Conference, Jan. 9, 2008, Page <ul><li>District Court Opinion: Ruling on Qualcomm’s motion to dismiss, rejects antitrust claim </li></ul><ul><ul><li>Resolving claim in Broadcom’s favor would impose on Qualcomm a duty to deal with its competitors </li></ul></ul><ul><ul><li>Any time a standard includes patented technology, patentee enjoys monopoly power, and accepting Broadcom’s argument would expose any owner of essential patents to antitrust liability </li></ul></ul><ul><ul><li>Broadcom’s “inducement” argument may give rise to liability under other legal theories, but inducement did not create Qualcomm’s monopoly power </li></ul></ul>
  17. 17. 2007: Year in Review Broadcom v. Qualcomm Ohana, LEI Conference, Jan. 9, 2008, Page <ul><li>Third Circuit Reverses </li></ul><ul><ul><li>Inclusion of patent in standard can lead to “hold up” by patentee, permitting patentee “to extract supracompetitive royalties from the industry participants” </li></ul></ul><ul><ul><li>Courts and antitrust agencies share “growing awareness of the risks associated with deceptive conduct in the private standard-setting process” </li></ul></ul><ul><ul><li>FRAND commitment “is a factor—and an important factor—that the [SDO] will consider in evaluating the suitability of a given proprietary technology vis-à-vis competing alternatives.” </li></ul></ul>
  18. 18. 2007: Year in Review Broadcom v. Qualcomm Ohana, LEI Conference, Jan. 9, 2008, Page “ We hold that (1) in a consensus-oriented private standard-setting environment, (2) a patent holder’s intentionally false promise to license essential technology on FRAND terms, (3) coupled with an [SDO]’s reliance on that promise when including the technology in a standard, and (4) the patent holder’s subsequent breach of that promise, is actionable anticompetitive conduct.”
  19. 19. 2007: Year in Review Antitrust Policy Ohana, LEI Conference, Jan. 9, 2008, Page <ul><li>SDOs respond to concern with “hold-up” by </li></ul><ul><li>developing new rules that permit, encourage, or require </li></ul><ul><li>participants disclose specific licensing terms “ex ante,” </li></ul><ul><li>during standards development </li></ul><ul><ul><li>Effort to avoid the indeterminate nature of RAND and disputes </li></ul></ul><ul><ul><li>about what terms are reasonable </li></ul></ul><ul><li>In two business review letters, Antitrust Division of </li></ul><ul><li>Justice Department assesses legality of rules that permit </li></ul><ul><li>or require ex ante disclosure of licensing terms </li></ul>
  20. 20. 2007: Year in Review Antitrust Policy Ohana, LEI Conference, Jan. 9, 2008, Page <ul><li>VITA Letter (October 2006) and IEEE Letter (May 2007) */ recognize danger of hold-up after standard issues </li></ul><ul><li>Antitrust Division will not take enforcement action </li></ul><ul><li>against SDOs that adopt rules that permit (IEEE) </li></ul><ul><li>or require (VITA) unilateral ex ante disclosure of </li></ul><ul><li>licensing terms </li></ul><ul><li>Letters take no position on “collective negotiation” </li></ul><ul><li>of royalties between patentee and multiple licensees in standards development process </li></ul>*/ Letter, Thomas Barnett to Robert Skitol, available at http://www.usdoj.gov/atr/public/busreview/219380.pdf ; Letter, Thomas Barnett to Michael Lindsay, available at ttp://www.usdoj.gov/atr/public/busreview/222978.pdf.
  21. 21. 2007: Year in Review Antitrust Policy Ohana, LEI Conference, Jan. 9, 2008, Page <ul><li>April 2007 Joint DOJ/FTC IP report */ : </li></ul><ul><ul><li>Joint ex ante negotiation may bring significant benefits </li></ul></ul><ul><ul><li>in avoiding hold up after standard is adopted, and will </li></ul></ul><ul><ul><li>be evaluated under rule of reason. </li></ul></ul><ul><ul><li>Joint negotiation may raise antitrust concerns </li></ul></ul><ul><ul><li>when there are no viable alternatives to a particular </li></ul></ul><ul><ul><li>patented technology. </li></ul></ul><ul><ul><ul><li>Open question: Is not going forward with a standard (or </li></ul></ul></ul><ul><ul><ul><li>choosing to exclude feature enabled by patented technology) </li></ul></ul></ul><ul><ul><ul><li>itself an “alternative technology”? </li></ul></ul></ul>*/ Antitrust Enforcement and Intellectual Property Rights: Promoting Innovation and Competition, available at http:// www.usdoj.gov/atr/public/hearings/ip/222655.pdf .
  22. 22. 2008 and Beyond Events Ohana, LEI Conference, Jan. 9, 2008, Page <ul><li>DC Circuit hears Rambus’ */ appeal of Federal Trade Commission decision that Rambus’ alleged failure to disclose essential patents violated antitrust law </li></ul><ul><ul><li>Whether “shared expectations” of participants can be looked at to supplement terms of ambiguous IPR policy. </li></ul></ul><ul><li>Federal Circuit decision in CSIRO v. Buffalo </li></ul><ul><ul><li>Some amicus briefs encourage Federal Circuit to address application of eBay v. MercExchange standard for injunctive relief when patentee has committed to license patents through participation in standards development </li></ul></ul>*/ WilmerHale represents Rambus.
  23. 23. 2008 and Beyond Predictions Ohana, LEI Conference, Jan. 9, 2008, Page <ul><li>More cases: </li></ul><ul><ul><li>Standards-based defenses and counterclaims have proven successful when asserted in infringement cases </li></ul></ul><ul><ul><li>With increasing importance of standards, patents that may be essential to implement standards become more valuable </li></ul></ul><ul><li>Emerging theories </li></ul><ul><ul><li>Delayed disclosure of essential patents </li></ul></ul><ul><ul><li>Compliance with non-discrimination requirements </li></ul></ul><ul><ul><li>Reasonableness of non-royalty terms </li></ul></ul><ul><ul><li>“ Stacking” of multiple RAND royalties charged at different levels of distribution </li></ul></ul>
  24. 24. Best Practices Patent Disclosure Issues Ohana, LEI Conference, Jan. 9, 2008, Page <ul><li>Periodic company inventory of standards participation </li></ul><ul><ul><li>Which SDOs? </li></ul></ul><ul><ul><li>What are IP policies? </li></ul></ul><ul><ul><li>Do we have processes in place to comply with disclosure obligations? </li></ul></ul><ul><ul><li>Have we agreed to default licensing obligations that implicate competitively significant patents? </li></ul></ul><ul><ul><ul><li>Particularly important for companies that participate regularly in consortia, special interest groups, and other less formal SDOs where default licensing is common </li></ul></ul></ul>
  25. 25. Best Practices Patent Disclosure Issues Ohana, LEI Conference, Jan. 9, 2008, Page <ul><li>Standards Diligence for Acquisitions </li></ul><ul><ul><li>Has target been active in standards development? </li></ul></ul><ul><ul><li>Has target complied with disclosure obligations? </li></ul></ul><ul><ul><li>Are target’s patents subject to licensing commitments given through participation in standard-setting? </li></ul></ul><ul><ul><li>Has target transferred patents to evade disclosure or licensing obligations? </li></ul></ul>
  26. 26. Best Practices Training for Participants Ohana, LEI Conference, Jan. 9, 2008, Page <ul><li>Both “defensive” and “offensive” </li></ul><ul><ul><li>Familiarize participants with IPR policies of SDOs in which they participate and process for making patent disclosures </li></ul></ul><ul><ul><ul><li>Role of participants in standards disclosure versus company IP lawyers in disclosure process </li></ul></ul></ul><ul><ul><li>Antitrust training to avoid group boycott issues </li></ul></ul><ul><ul><li>Detecting and responding to risk of patent ambush </li></ul></ul><ul><ul><ul><li>When is it appropriate to ask another participant about its patent position and licensing intentions? </li></ul></ul></ul><ul><ul><ul><li>What can I do with the information once I receive it? </li></ul></ul></ul>
  27. 27. Standards and Patent Pools: 2007 and Beyond Questions? Gil Ohana Wilmer Cutler Pickering Hale and Dorr Palo Alto, CA +1 650 858 6025 [email_address]
  28. 28. Standards and Patent Pools: 2007 and Beyond For copy of presentation and all materials cited, please send e-mail to: [email_address]

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