The Role of Technology Standards and Industry
         Cross licensing
         Cross-licensing Agreements


Ilian Iliev (...
Technology Standards and Industry Cross-licensing
Agreements

 Experience in other industries shows that standards-settin...
Why do companies enter cross-licensing agreements or
    technology standard patent pools?


    Considerations           ...
Example Technology Standards Body:
 ETSI (European Telecoms Standards Institute)
• C t d 1988, primarily around th GSM sta...
Other Examples of Technology Standards/Patent Pools

• Continua Alliance
     – Push for inter-operability between medical...
Can we identify industries or technologies ripe for
  technology standards or cross-licensing agreements? 1
        Key In...
Can we identify industries or technologies ripe for
   technology standards or cross-licensing agreements? 1

        Key ...
Low-Carbon Technology Energy Space –
Some Considerations

• Young/fragile business models: can be influenced at an
  early...
Implications for Low-Carbon Energy 2
The ‘Easy’ St
Th ‘E    ’ Steps to cross-licensing and standards agreements:
         ...
…and finally…

         Please contact Ilian with any questions you may have

                                 Thank You !...
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The Role of Technology Standards and Industry Cross Licensing Agreements

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Presentation given at a workshop on 'The Future of Technological Cooperation for Climate Change' hosted by Chatham House and the Center for American Progress in Washington DC on August 27-28, 2009. The presentation succinctly reviews the potential influence of cross-licensing agreements within the low-carbon energy sector.

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The Role of Technology Standards and Industry Cross Licensing Agreements

  1. 1. The Role of Technology Standards and Industry Cross licensing Cross-licensing Agreements Ilian Iliev (CEO), CambridgeIP 27th August, 2009 Chatham House and Center for American Progress Progress, Washington D.C., 27 th-28th August, 2009 Workshop: The Future of Technological Cooperation for Climate Change © 2009 Cambridge Intellectual Property Ltd. All rights reserved.
  2. 2. Technology Standards and Industry Cross-licensing Agreements  Experience in other industries shows that standards-setting bodies and cross-licensing agreements can accelerating technology innovation and diffusion, through e.g.: diff i h h – Decreased risk of litigation – Savings from duplication of R&D effort/building on others’ mistakes g p /b g – Decreased barriers to entry for newcomers – Specialisation and value chain diversification – U Unexpected and novel uses of t h l t d d l f technology Note: we’re not considering here the many risks– lock-in, patent trolls,etc.  What can we learn from other industries’ experience that can be adopted and adapted in the low-carbon energy technology area?  What are the starting points for engagement with private sector? © 2009 Cambridge Intellectual Property Ltd. All rights reserved. 2
  3. 3. Why do companies enter cross-licensing agreements or technology standard patent pools? Considerations  Rationale  Examples  Remain a  Remain a In a rapidly changing industry: remain at  Motorola: semi‐conductor cross‐licensing the head of technology change  Nokia: licensing of technology to Siemens  technology leader  Avoid litigation  Low‐cost/reasonable royalties for use of  Motorola: non‐discriminatory/blanket 5‐year  technology: cheaper to license than to risk renewable agreements to both competitors and  (defensive and  (defensive and litigation  others  offensive)  Accelerate  Expose your technology to greater  Nokia: licensing of technology to Siemens  number/type of users  / yp innovation  i ti Revenue generation Unilateral licensing out of key IP can  Motorola: semi‐conductor licensing was  generate significant revenues  generating $50mln p.a. in 1990s IBM: licensing out of IP that’s not being used:  g g 100s $mln p.a.  Protect value chain  Meet challenge to leadership outside of  Nokia licensing of S60 platform to counter  industry – retain leadership of the  Windows Mobile entry threat against big outsider industry g g industry  Symbian Foundation: royalty‐free licensing  S bi F d ti lt f li i entrants  model to protect against Google Android & Apple  ‘Increasing the pie’  Change model to redefine the market  Revenue sources for Smartphones are changing  boundaries & increase services accessible  from calls to data and content – even payment  on back of platform  services (e.g. Visa mobile payments solutions)  © 2009 Cambridge Intellectual Property Ltd. All rights reserved. 3
  4. 4. Example Technology Standards Body: ETSI (European Telecoms Standards Institute) • C t d 1988, primarily around th GSM standard setup i 1987 Created 88 i il d the t d d t in 8 – Initial patent pool by: Motorola, Nokia, Ericsson, other equipment manufacturers • Activities have expanded over a wide range of other standards, including standards 2G/GPRS/2.5G, 3G,Wi-Fi, and other telecoms standards • 300+ manufacturers, 80+ network operators, R&D services providers & regulators • Impact on industry • Accelerated diffusion of technology standards: ubiquitous technology! • Facilitating the emergence and maturing of new standards g g g • Moderator of IP conflicts (e.g. Sun Microsystems – ETSI – EU) • A stakeholder/knowledge diffusion forum – with non-OECD participation ETSI Membership by Type Users of Technology Government Bodies 5% University/Research  10% Bodies 6% Consultancies and  Service Providers Other 13% 8% Network Operators 12% Manufacturers 46% © 2008 Cambridge Intellectual Property Ltd. All rights reserved. 4
  5. 5. Other Examples of Technology Standards/Patent Pools • Continua Alliance – Push for inter-operability between medical diagnostics devices – Telecoms & electronics players cross over into E Health cross-over E-Health • STS Association: – Pre-paid metering (the 1st smart meter?) – Originating from South Africa: third world needs result in globall adopted technology – Underlying pre-paid meters globally and IEC standard pre paid • Nokia: Symbian/S60 Platform – Users of S60 are licensed under a non-discriminatory, capabilities based accreditation program: ‘A dit ti ‘Accredited S6 d l dit d S60 developer’ ’ – S60 Smartphones dominate the market • Semi-conductor industry cross-licensing agreements: y g g – In 1980s 95% of semi-conductor equipment was made in-house by chip manufacturers; – By 1990s only 7%: i e 90+% of the industry became ‘fabless’ i.e. fabless © 2009 Cambridge Intellectual Property Ltd. All rights reserved. 5
  6. 6. Can we identify industries or technologies ripe for technology standards or cross-licensing agreements? 1 Key Indicators   Other Industry Examples  Increasing patent  Semi‐conductor industry: increasing number of patent  complexity & Litigation  complexity & Litigation cross references, slow down in patenting rates cross‐references, slow‐down in patenting rates trends  Increasing speed of product  Telecoms: 1.5‐2 years product life cycle – much shorter  life cycle  lif l than the patent life‐cycle  than the patent life cycle Increased heterogeneity of  Telecoms: complex matrix of user capabilities/needs/tastes  client/user types  Fragmentation of market  Telecoms: spread of GSM/3G standard globally allows  f / by geography and local  access of large number of market niches; complex  conditions  combination of service providers/ manufacturers/ content  providers/ application developers serving unique niches  id / li ti d l i i i h Increased complexity of  Semi‐conductors: rapid speed of development and user  technology platforms  demand led to increasing complexity; Equipment  rd manufacturing increasingly done by 3 manufacturing increasingly done by 3 parties Telecoms: Move to smartphones has drastically increased  complexity of O.S. platforms – leading to Symbian Foundation/industry consortia Foundation/industry consortia © 2009 Cambridge Intellectual Property Ltd. All rights reserved. 6
  7. 7. Can we identify industries or technologies ripe for technology standards or cross-licensing agreements? 1 Key Indicators   Other Industry Examples  Increasing user autonomy g y Telecoms: Increasing  choices and number of segments give  (vis‐à‐vis distributor)  Operators key role – but also lead manufacturers to interact  directly with users  Major external threat: big  Telecoms: Microsoft Mobile led Nokia to push Symbian player from another  standard industry entering your  Entry of Apple Smartphone and Google Android: Symbian Foundation and royalty‐free licensing  space  space Major markets identified,  Telecoms: Key driver behind ETSI and GSM standard: to  but cannot be reached  allow national EU market leaders to expand internationally  under current business  under current business into other developed and developing markets  p p g Healthcare: Continua Alliance model  © 2009 Cambridge Intellectual Property Ltd. All rights reserved. 7
  8. 8. Low-Carbon Technology Energy Space – Some Considerations • Young/fragile business models: can be influenced at an early stage by early buyers through procurement requirements • Mixing of business models due to cross-over of technologies: e.g. Telecoms into Cleantech (SmartMeters); biotech into biofuels • Increasing litigation risk: e.g. Wind, PV • Large p g public sector role pprovides rationale/legitimacy for / g y influence • Discussions around a global patent pool: very compatible with requirements for technology standards body © 2009 Cambridge Intellectual Property Ltd. All rights reserved. 8
  9. 9. Implications for Low-Carbon Energy 2 The ‘Easy’ St Th ‘E ’ Steps to cross-licensing and standards agreements: t li i d t d d t • Need to ID candidate areas for industry cross-licensing agreements, for y g g instance: – PV: e.g. underlying technologies for PV production, business models similar to semi-conductors sector – Cl Cleaner C l e.g. hi h d IGCC t h l Coal: high-end technology, – Carbon Capture: e.g. Carbon separation processes – around broad, fundamental technologies (e.g. enzymes-based carbon capture) • Need to ID candidate areas for standards agreements – Wind: e.g. inter-changeability of components – gear/transmission, software systems, integration with grid – Smartgrid: e.g. communications protocols/software for smartmeters, hardware – Marine energy: e.g. stress-mitigation technologies • Need to ID critical mass of willing participants – Public sector: Universities, Research institutes, large scale buyers, SMEs, some Multinationals; adapt the Bayh-Doyle Act/ public sector funding ? – Private sector: procurement strategies (housing builders, utilities), SMEs, Multinationals with compatible IP strategies, other industry technology standards bodies © 2009 Cambridge Intellectual Property Ltd. All rights reserved. 9
  10. 10. …and finally… Please contact Ilian with any questions you may have Thank You ! Ilian Iliev (CEO and Founder) E-mail: ilian.iliev@cambridgeip.com GSM: 077 863 73965 Tel: 01223 370 098 © 2009 Cambridge Intellectual Property Ltd. All rights reserved. 10

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