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Wireless Standard Essential Patent Issues & Strategies
Feb 08, 2013
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Wireless Standard Essential Patent Issues & Strategies
1. Wireless Standard Essential Patent: Issues & Strategies 1Q. 2013©2013 TechIPm, LLC All Rights Reserved www.techipm.com
1. Essentiality Analysis for Standard Essential PatentA standards essential patent is defined as patent that contain one or moreclaims that are infringed by the implementation of a specification forstandardized technology. Thus, if a product is implemented following thestandard specifications, it should infringe some essential patents. LTE Patent Claim Mapping ExampleClaim Specification 1. An apparatus for transmitting a random 3GPP TS 36.211 V8.9.0 (2009-12)access signal comprising: 5.7.2 Preamble sequence generationa CAZAC root sequence selector coupled to aCAZAC root sequence generator, wherein the The random access preambles are generatedCAZAC root sequence generator generates at from Zadoff-Chu sequences with zeroleast one CAZAC root sequences, and correlation zone, generated from one orwherein the CAZAC root sequence selector several root Zadoff-Chu sequences. Theselects a preamble root sequence from the at network configures the set of preambleleast one CAZAC root sequences. sequences the UE is allowed to use.2. The apparatus of claim 1 wherein:the CAZAC root sequence generator is a prime-length Zadoff-Chu sequence generator.©2013 TechIPm, LLC All Rights Reserved www.techipm.com 2
2. InterDigital’s Standard Essential Patents: Dilemmas to US Patent System -1Recently, ITC (U.S. International Trade Commission) started investigation forInterDigital‟s complaint against major foreign smartphone manufacturesincluding Samsung that the accusers infringed its 3G and 4G standard essentialpatents. This is not the first time alleging infringement of standard essentialpatents and asking ban for importations of infringed products. However,considering the current debate that increasing activities of patent trolls andintensive smartphone patent infringement litigations caused the current patent system in crisis, InterDigital‟s litigation will be a hard-to-decide case for ITC.Generally, it is not presumed that holding a patent means its owners have market power in the context of antitrust violation analysis (35 U.S.C. Section 271(d);Illinois Tool Works Inc. v. Independent Ink, Inc., 547 U.S. 28 (2006)). However,a standard locks in a specific industry because the products should becompatible with the standard specifications.©2013 TechIPm, LLC All Rights Reserved www.techipm.com 3
2. InterDigital’s Standard Essential Patents: Dilemmas to US Patent System -2Thus, holding a standard essential patent can be considered as having amarket power because all products compatible with the standard specificationsshould infringe the standard essential patents. For example, the EuropeanCommission recently announced its preliminary view that Samsungs seekingof injunctive relief basis on its 3G mobile communication standard essentialpatents can be considered as abuse of exclusive IPRs prohibited by EUanti-competition laws.To avoid the antitrust issue with the standard essential patents, therefore, apatentee should license the patents on „fair, reasonable and non-discriminatory(FRAND)‟ terms. Thus, when a patentee tries to obtain an injunction from courtsor ITC for enjoining potential infringers of the standard essential patents, it canbe considered as contractual violation with respect to FRAND terms. In parallelwith the current movement to limit the IPRs of standard essential patents,several US government agencies (DOJ, USPTO, FTC) insisted that, in someinstances, standard essential patents cannot be used for block sales or importsof infringed products.©2013 TechIPm, LLC All Rights Reserved www.techipm.com 4
2. InterDigital’s Standard Essential Patents: Dilemmas to US Patent System -3Furthermore, after the U.S. Supreme Court decision in eBay v. MercExchange(547 U.S. 388 (2006)), federal courts are very cautious in granting injunctiverelief, especially for NPEs. Therefore, even if ITC does not need to reflect courts‟ decisions and follow other administration agencies‟ policy suggestions,InterDigital‟s case will be very burdensome to ITC‟s rulings considering the factthat injunction is its only relief.©2013 TechIPm, LLC All Rights Reserved www.techipm.com 5
3. LTE Patent PoolAccording to GSA (Global mobile Suppliers Association) there were 87manufacturers for 666 LTE-enabled user devices as of January 2013.LTE user devices are Modules, Tablets, Notebooks/netbooks, PC Cards,Smartphones, Routers, Femtocells, and USB dongles.Among 87 manufacturers, only 13 manufacturers – Apple, Ericsson, Huawei,LG, Motorola, NEC, NSN, Qualcomm, RIM, Samsung, Sharp, TI, and ZTE –were LTE standard essential patent shareholders based on TechIPms LTEpatent analysis.Recently, AT&T, Clearwire, HP, DTVG Licensing, KDDI, NTT DoCoMo,SK Telecom, Telecom Italia, Telefonica, and ZTE formed LTE patent pool,of which only ZTE is the LTE standard essential patent shareholder.©2013 TechIPm, LLC All Rights Reserved www.techipm.com 6
4. LTE Royalty Rates for Bilateral Licensing -1Qualcomm revealed that the company had put royalty rate at 3.25 % for LTEpatent licensing.Nokia expects Nokia‟s rate for devices that deploy LTE as the only wirelesscommunication standard to be in a range of 1.5 % from the sales price of anend-user device. To avoid unfavorable effects of royalty stacking, Nokia will notcharge royalties higher than 2.0 % from the sales price of an end-user devicefor IPR that is essential to wireless communication standards irrespective of thenumber of wireless standards deployed in such a device.Ericsson said all of its LTE agreements will be made according to Ericssonsproportional share of the standard IPR that relates to the relevant productcategory. Ericsson likewise honors the same industry practice by ensuring amaximum cumulative rate on LTE technology not exceeding a single-digit rate.Ericsson´s fair royalty rate for LTE is therefore expected to be around 1.5 % forhandsets.©2013 TechIPm, LLC All Rights Reserved www.techipm.com 7
4. LTE Royalty Rates for Bilateral Licensing -2Huawei believes it will hold 15-20% of all essential patents relate to LTEstandard, therefore, a royalty rate with some flexibility, but not to exceed 1.5 %,is expected.ZTE will license its LTE essential patents for mobile communication terminalswith a maximum 1 % from the sales price of an end-user device. However, ZTEwill not be restrained to this amount, if ZTE is involved in any licensingnegotiations. While in multi-mode terminals, ZTE will follow similar principle insetting the royalty rate for LTE essential patents, which will be determined inbilateral negotiation.Motorola expects that its essential patent royalty rate for LTE systems andequipment (e.g. infrastructure and subscriber handsets) will be approximately2.25 %.©2013 TechIPm, LLC All Rights Reserved www.techipm.com 8
5. Samsung Galaxy S III: Center of LTE Patent War -1Samsung Galaxy S III is the bestseller smartphone that was sold more than 40million units worldwide. In the US, Samsung Galaxy S III is now connecting itscustomers through 4G LTE networks. As the market dominance of SamsungGalaxy S III increases, it is also placed on the center of LTE patent war.Ericsson filed patent infringement complaints against Samsung in ITC (USInternational Trade Commission) and the District Court for the Eastern Districtof Texas. The complaints claimed that, among other claims, Samsung Galaxy SIII infringed its LTE patents. TechIPm‟s essentiality analysis confirms that twopatents claimed in the lawsuits are LTE standard essential patent candidates:US6445917 (Mobile station measurements with event-based reporting): thispatent provides a perfect mapping between the claims at issue and the LTEstandard specification. It relates to measurements in the process of handoveroperation as described in TS 36.331 Sec. 5 and TS 36.300 Sec. 10.1.3.©2013 TechIPm, LLC All Rights Reserved www.techipm.com 9
5. Samsung Galaxy S III: Center of LTE Patent War -2US8169992 (Uplink scrambling during random access): this patent relates tocontention based random access procedure utilizing CRC scrambling for RNTIas described in TS 36.213 Sec. 6, TS 36.300 Sec. 10.1.5, TS 36.321 Sec. 5.1,and TS 36.212 Sec 5.3.InterDigital filed patent infringement complaints against Samsung in ITC andthe District Court for Delaware. TechIPm‟s essentiality analysis confirms that one patent claimed in the lawsuits is a LTE standard essential patent candidate:US7941151 (Method and system for providing channel assignment informationused to support uplink and downlink channels): this patent relates to providingchannel assignment information to support uplink and downlink transmissionsutilizing the DCI and CRC scrambling for RNTI as described in TS 36.213 Sec.7 & 8, TS 36.300 Sec. 11.1, and TS 36.212 Sec 126.96.36.199.©2013 TechIPm, LLC All Rights Reserved www.techipm.com 10
6. Standard Essential Patent Strategy: Lesson from Samsung’s ITC Litigation against Apple -1Generally, it is not presumed that holding a patent means its owners havemarket power in the context of antitrust violation analysis (35 U.S.C. Section 271(d); Illinois Tool Works Inc. v. Independent Ink, Inc., 547 U.S. 28(2006)). However, a standard locks in a specific industry because the productsshould be compatible with the standard specifications. Thus, holding a standardessential patent can be considered as having a market power because allproducts compatible with the standard specifications should infringe thestandard essential patents.To avoid the antitrust issue with the standard essential patents, therefore, apatentee should license the patents on „fair, reasonable and non-discriminatory(FRAND)‟ terms. Furthermore, a patentee should be careful when he or shetries to obtain an injunction from courts or ITC for enjoining potential infringersof the standard essential patents. For example, the European Commissionrecently announced its preliminary view that Samsungs seeking of injunctiverelief basis on its 3G standard essential patents can be considered as abuse ofexclusive IPRs prohibited by EU anti-competition laws.©2013 TechIPm, LLC All Rights Reserved www.techipm.com 11
6. Standard Essential Patent Strategy: Lesson from Samsung’s ITC Litigation against Apple -2In recent Samsung‟s ITC case, Samsung sued Apple for 3G iPhones‟infringement of Samsung‟s 3G standard essential patents. Samsung insistedthat, because Apple‟s iPhones use Intel‟s standard compatible basebandmodem chip, Apple‟s iPhones should infringe Samsung‟s 3G standard essentialpatents. Considering the fact, however, that injunction is the only relief for ITClitigation it would be better bring a suit in a district court exploiting standard essential patents‟ easy-of -proof characteristic (patentee should demonstrate to apreponderate degree that the accused products meet every limitations of theclaim at issue) and the monetary damage options.Furthermore, a patent used by Samsung in the ITC litigation turned out to benot a 3G standard essential patent: it was proposed and accepted during thestandardization process, but never included in the final standard specifications.This fact shows the importance of alliance in standardization and IP creationprocesses. Samsung should have checked the status of proposal during thestandardization process and/or the essentiality of related patents afterward foramending the relevant claims during the patent prosecution process.©2013 TechIPm, LLC All Rights Reserved www.techipm.com 12
7. Apple’s Defense Strategy against Samsung’s Patent LitigationsThe Mannheim court, a German patent court, recently postponed its final rulingfor Samsung due to invalidity possibility of Samsung‟s 3G patents used inlawsuit against Apple. Most of Samsung‟s 3G patents used in the litigation arefiled during its participation in the 3GPP‟s UMTS standardization, especially after 1999 publication of the initial WCDMA standard specifications. Apple isexploiting the initial WCDMA standard specifications combined with otherprior arts such proposals presented by other participations during the 3GPP‟sUMTS standardization process: Samsung‟s sequential and accumulativeinventions should be obvious!For example, in ITC litigation, Apple alleged that the asserted claims ofSamsung‟s US7706348 are invalid in light of initial WCDMA standardspecifications and a well-known technical book: “Reed-Muller codes were theonly codes that had ever been used for encoding TPCI information in the initialWCDMA standard specifications. … MacWilliams‟ book is considered to be theBible of error correcting codes (to a person of ordinary skill in the art). … 1999Standard and MacWilliams text together disclose all of the elements of theasserted claims, and therefore render those claims invalid for obviousness.”©2013 TechIPm, LLC All Rights Reserved www.techipm.com 13
8. Steelhead Licensing LLC’s Patent US5491834: FRAND Defense against the Lawsuit? -1Recently, Steelhead Licensing LLC, an NPE, sued several mobile phonemanufactures (Apple, HTC, LG, Motorola , RIM etc.) and Telcos ((AT&T,MetroPCS, Sprint, T-Mobile) for infringement of US5491834, which wasacquired from BT (British Telecommunications). A key issue with this patentlitigation will be whether US5491834 is a standard essential patent for somemobile communications standards.TechIPm‟s preliminary research for US5491834 shows that it is a potentiallyessential patent for 3G WCDMA standard. As the title, mobile radio handoverinitiation determination, suggests it relates to handover determination betweencells in a cellular radio system handling communications between mobileterminals and base stations. The preamble of the claim 1 also shows thepurpose of the invention: a handover determination system for a mobile radionetwork including a plurality of cells, each cell having associated with it a basestation for supporting communications with a mobile unit, the systemcomprising.©2013 TechIPm, LLC All Rights Reserved www.techipm.com 14
8. Steelhead Licensing LLC’s Patent US5491834: FRAND Defense against the Lawsuit? -2A potential part of the standard specifications that covers handoverdetermination is 3GPP TS 25.331 V3.21.0 (2004-12: Radio Resource Control(RRC) protocol specification). Especially, Sections 8.4(measurement procedures for Intra-frequency measurements) and 14.1.6(report quantities in intra-frequency measurements) describe the claim terms:means for monitoring a quality of a signal respectively transmitted betweeneach of a plurality of candidate base stations and the mobile unit: uponreception of a MEASUREMENT CONTROL message the UE shall performactions ……means for producing an indication of the rise or fall in the saidquality as a function of time: the quantities that the UE shall report to UTRANwhen the event is triggered…..©2013 TechIPm, LLC All Rights Reserved www.techipm.com 15
8. Steelhead Licensing LLC’s Patent US5491834: FRAND Defense against the Lawsuit? -3control means for initiating a handover from a serving base station, supportingcommunications with the mobile unit, to another base station, the initiationbeing based on the rise/fall as a function of time in the said quality of thesignals associated with the plurality of candidate base stations being monitored:the UTRAN may request a measurement by the UE to be setup…..said mobile unit including the means for monitoring and the means forproducing, the mobile unit further comprising signalling means for addressingthe serving base station with an indication of the need for a handover to beinitiated: cells in the active set are involved in soft handover.said signalling means being arranged to address the serving base station withan indication of the level of priority of a handover and/or with an indication ofthe possibility of a handover contingent upon the proceeding results ofmonitoring the quality of the transmitted signal: quality measurements is themeasurements of downlink quality parameters … cells that the UE is monitoringare grouped in the UE into …..©2013 TechIPm, LLC All Rights Reserved www.techipm.com 16
9. Standard Essential Patent Claim Drafting Strategy: Lesson from Samsung’s ITC Litigation against Apple -1In recent Samsung‟s ITC case, Samsung sued Apple for 3G iPhones‟infringement of Samsung‟s 3G standard essential patents. Samsung insistedthat, because Apple‟s iPhones use Intel‟s& amp; Qualcomm‟s standardcompatible baseband modem chip, Apple‟s iPhones should infringe Samsung‟s3G standard essential patents.US7486644 is one of Samsung‟s 3G standard essential patents exploited in thelitigation. It describes coding process of E-AGCH (Enhanced Absolute GrantChannel) in the HSUPA enable base stations, as specified in 3GPP TS 25.212Sec. 4.10. Claims l and 5 are directed exactly to the standard specification, andthus US7486644 is the HSUPA standard essential patent with respect to thestandard compatible base station modem products.©2013 TechIPm, LLC All Rights Reserved www.techipm.com 17
9. Standard Essential Patent Claim Drafting Strategy: Lesson from Samsung’s ITC Litigation against Apple -2The disputed issue in the litigation, however, was that, even if US7486644 isthe standard essential patent for transmitters, it cannot also be the standardessential patent for receivers like Apple‟s accused products. Apple argued thatTS 25.212 does not specify what a receiver must do in order to receive a signaland, therefore, the receiver does not need to follow decoding process exactlyreciprocal to the encoding process. Thus, Apple‟s iPhones perform thedecoding process in different ways that do not have to practice the assertedclaims 9 and 13 of US7486644, which describe exactly reciprocal way to theencoding process.This case provides a valuable lesson for drafting patent claims for wirelessstandards:(1) There must be separate claims for each receiver and transmitterindependently.(2) If the standard specification only describe a component, for example atransmitter, the claims and their terms should be construed such that cover notonly exactly reciprocal way but also other possible ways to practice.©2013 TechIPm, LLC All Rights Reserved www.techipm.com 18
10. Standards Essential Patent Ex-Post DevelopmentA typical way to develop the essential patent is to participate in thestandardization process and try to get IPRs for the standards in parallel(strategic alignment between standardization and IPR).Without the strategic alignment between standardization and IPR process,however, there is an alternative way to develop the essential patent portfoliothrough patent engineering process:Step 1: Audit the existing patents to compare with standard specifications.Step 2: Investigate the embodiments of the patent which are relevant to thespecifications.Step 3: Design the claim terms to be essential to the implementation of thespecification.Step 4: File the essential patent candidate through continuation or reissueprocess.©2013 TechIPm, LLC All Rights Reserved www.techipm.com 19
Thank you! • If you have any questions please contact Dr. Alex G. Lee at email@example.com©2013 TechIPm, LLC All Rights Reserved www.techipm.com 20
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