Tagredj _Sisvel

Patent pool for GALILEO?
An efficient tool to solve IPR issues
for new innovative technologies

Dr Mustapha Tagredj
Chief Licensing Advisor to the board of Sisvel

ITN
Infrastruce, Telematics and Navigation
October 15, 2009
Lingotto Fiere – Torino

Copyright © 2009 Sisvel S.p.A. All Rights Reserved 1

Who is Sisvel?

• Founded in 1982 by Roberto Dini to spin-off from Indesit a
significant portfolio of television patents, Sisvel is a dynamic
and full service patent managing company
• Sisvel is a truly independent company with roots in the
industry: the initial shareholders of Sisvel were the most
important Italian manufacturers of television sets
• Sisvel is one of the oldest and, with a team of over 80
professionals, one of the largest administrators of IP Rights
• Sisvel is a European company, but operates as a multinational
with subsidiaries and offices on three continents


Sisvel Today
A Global Licensing Organization

SISVEL S.P.A. SISVEL Japan
None, Italy SISVEL Germany GmbH Tokyo, Japan
Stuttgart, Germany

SISVEL US, Inc.
Audio MPEG, Inc.
SISVEL (Hong Kong) Ltd.
Alexandria, VA
Hong Kong

Edico, Srl
Rome, Italy SISVEL Technology, Srl
None, Italy
3


Some current licensing programs
managed by Sisvel

In operation Facilitation

MPEG Audio


Increasing awareness
of IPR issues


From innovation to intellectual property

• Innovation results in intellectual property
• All rights resulting from intellectual activity in the industrial,
scientific, literary or artistic fields
 literary, artistic and scientific works
 inventions in all fields of human endeavour
 scientific discoveries
 industrial designs
 trademarks, service marks, and commercial names
 designations

6

Political Institutions are aware of the
significance of IP rights licensing
“With a world market estimated at being 11.4
billion euro in 2009, mobile TV offers Europe the
possibility of combining its strengths in the
mobile communications sector with the wealth
and differences that characterize the European
audiovisual sector.
I am prepared to give strong support to European
standardised solutions, such as DVB-H, on the
condition that they provide certainty about
technology licensing terms and conditions.
Without this certainty and predictability, it
will be impossible to invest with confidence in
new innovative technologies. Industry should
therefore foster work in this direction.”

Viviane Reding
(Telecommunications European Commissioner)


GALILEO
access rights and right of use
Access rights For project purposes For use purposes
(participants only)

To Background Royalty-free, unless
(held by participants otherwise agreed
prior to the grant
agreement)
before signature the Subject to agreement,
grant agreement royalty free or on fair
and reasonable
conditions?
To Foreground Royalty-free Third party rights?
(results generated by
project)


Benefits from a Patent
Pool for GALILEO


Overview of Patent Pools

 A “Patent Pool” is a portfolio of patents essential to the same
standard but owned by different parties
 The purpose of any Patent Pool is to facilitate licensing of the patents
in the portfolio
 Pools are based on one or more agreements to:
 establish the rules of the pool
 name a licensing administrator to manage and operate the pool
 provide the licensing administrator with the necessary rights to
grant non-exclusive licenses to third parties


Benefits of Patent Pools
for New Innovative Technologies

• Lower transaction costs by offering licensees “One stop shopping” to
acquire necessary licenses

• Provide certainty and predictability to the market on the level
of royalty rates

• Ensure uniform and non-discriminatory licensing of essential patents
through an independent professional administrator

• Decrease likelihood of duplicative investments to “invent around”

• Defensive tool against NPEs

• Pro-competitive


Patent Pools are Pro-Competitive

Patent pools have substantial pro-competitive effects, including:

 Clearing blocking patents that would otherwise prevent competitive
entry into a field;
 Establishing a single reasonable royalty rate (that, according to
economic theory, will be lower than the cost of separately
negotiated licenses);
 Reducing royalty stacking and hold up behavior; and
 Lowering costs for POs in collecting royalties (with benefits for
Licensees as well) and increasing efficiency of the system.


Patent Pools are Pro-Competitive (cont.)

• U.S. Courts and antitrust enforcement agencies have upheld
pools on the basis of their pro-competitive effects
– For example, a Federal District Court dismissed antitrust claims
against a patent pool for video disc technology that included four
direct competitors. Matsushita Elec. v. Cinram Int’l, 299 F. Supp.
2d 370 (D. Del. 2004)
• However, any collaboration among competitors also raises
potential antitrust risk
– For example, the FTC took legal action in Summit/VISX, alleging
that a patent pool eliminated price competition among its members
– Expert antitrust counsel should always be part of the formation
process of any patent pool


Independent administrator

• The independence of the administrator (including the administrator’s
controlling shareholders) helps safeguard patent pools from potential
antitrust risk.
• For example, the U.S. Department of Justice recently emphasized the
importance of an independent administrator in the letter quoted
below.

If the Consortium does not engage an independent licensing administrator and the Consortium’s
administrative committee must act as the licensing administrator, the Department would be
concerned that the Consortium’s current structure does not adequately safeguard licensees’
sensitive business information from being accessed and used by licensors to harm competition.
Therefore, we decline to state our enforcement intentions should the Consortium not retain an
independent licensing administrator…

U.S. Department of Justice, Business Review Letter regarding the UHF RFID Patent Pool,
dated October 21, 2008


Key Elements for
Patent Pools Formation


Key Elements

• Completeness – need to incorporate the maximum number of
essential patents into the Patent Pool (e.g. patent calls)

• Credibility – need to obtain credible independent essentiality
evaluation in all relevant countries (e.g. USA, EU, JP, KR, and
CN)

• Harmony – need to reach a balance between Patent Owners
that are both licensees and licensors and Patent Owners that
are strictly licensors


Key Elements (cont.)

• Reliability – sound mechanism to properly allocate royalties
among the Patent Owners and the Pool Administrator

• Legality – follow antitrust guidelines & best practices – for
example, adopt a strict evaluation of essentiality to avoid
bundling essential patents with non-essential patents

• Effectiveness – procedures for resolving differences of opinion
to expedite patent pool formation

• Independence of Administrator

• Establishing Contractual Relationship between Patent Holders
and Administrator (Master Agreement)


Conclusions

• A Patent Pool on New Innovative Technologies offers the following
benefits:
• One stop shopping: increase of efficiency
• Certainty, predictability, reasonability of royalty rates
• Defense against NPS
• Uniformity and non discrimination: pro-competitiveness
• Royalty staking reduction

• Independence of the Administrator is a key element for the success
of the patent pool

• A patent pool on GALILEO is highly recommended


Thank You


www.sisvel.com


Tagredj _Sisvel

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