Master thesis defence Markus Guder MIPLM 2020

Markus Guder
No. Etud. 21926975
Master of Intellectual Property Law and Management 2020
20/09/20
Identification and evaluation
of IP-strategic positions
for possible platform-based business models
in a converging eco-system
on the example of mobile applications

Table of contents
Objectives
Analysis
Ecosystems and value chains for mobile data applications
Platform-based business models for mobile data applications
Business Model description for the identified scenario
Limitations to IP exploitation effects in the scenario
Limitations due to market forces
Limitations due to legal matters
Results
Applicable Generic IP strategies
360° IP strategy
Major IP-Strategic positions
Conclusion
27.05.2021 Master Thesis MIPLM 2020 - Presentation Markus Guder 2

Objectives
The aim of the present work is to discuss,
based on the analysis of the convergence of the telecommunication ecosystem and the terrestrial broadcast ecosystem,
especially concerning the questions:
 Does the convergence of the ecosystems, as such, already create a need for digital platforms?
 Can IP-strategic positions accelerate the market penetration and sustain exclusivity of such a digital platform in converging
ecosystems, especially concerning shaping strategy?
 What are possible enablers and hindrances for such a platform?

Introduction to ecosystems and value chains
Business ecosystems
 Economic community
 Supported by a foundation of interacting organizations and individuals
 Produces goods and services of value to customers
 Includes:
 suppliers
 lead producers,
 competitors
 and other stakeholders
 Function of ecosystem leader is valued by the community, enabling
members to:
 move towards shared visions
 align their investments
 find mutually supportive roles
 Throughout the modern industrial area, industries have been organized
in linear value chains
 VCAs provide performance indicators for companies
Value chain
Value chain analysis

Introduction to ecosystems and value chains
Digital ecosystems
 Base on digital technologies
 Enable new ways of organizing value creation
 Move from value chains to digital ecosystems
 Distributed
 Adaptive
 Open socio-technical system
Value chain Digital Ecosystem Key Element
of a digital Ecosystem
 Inspired by natural ecosystems
 Self-organizing
 Scalable
 Sustainable
 Allow competition and collaboration among diverse entities

Relevant converging business ecosystems for mobile data applications
Mobile data
applications
Digital Content
Generation
Ecosystem(s)
Mobile
Communication
Ecosystem(s)
Terrestrial
Broadcast
Ecosystem(s)

Mobile Telecommunication Ecosystem(s)
 History
 Has steadily addressed new applications
 Has steadily incorporated new technologies
 Status
 Overall successful
 5G will connect everything, offer diverse ecosystems and
brings three impressive application scenarios
 Enhanced mobile broadband (eMBB)
 Massive machine type communication (mMTC)
 Ultra-reliable and low latency communications (uRLLC)
 Still stick to the same value chain
 Do not differentiate their services
 Motivation for convergence
 Return on network infrastructure invest continously decreasing
per generation
 High invests necessary to provide expected QoE and QoS for
mobile broadband applications
 Dual transformation necessary
 Transform core network (high invest)
 Identify adjacent growth opportunities
Equipment
Providers
Implementers
Application
providers
Content
providers
Network
operators
Service
providors

Terrestrial Broadcast Ecosystem(s)
 History
 Conventional channel based television
broadcasting
 Status
 CPNT value chain
 Steady decline in continuous user attraction
 Customers move to mobile services
 even worse at younger demographics
 Decline in attractively for advertising
 new business opportunities to monetarize
installed infrastructure and owned frequency
bands (increase value added)
 Access to consumer‘s mobile devices
C: Content P: Platform N: Network T: Terminal

Digital Content Ecosystem(s)
 History
 Traditionally consumer oriented
 Status
 Ever growing variety of applications, e.g.
 IoT
 Smart farming
 Autonomous driving
 Virtual Reality
 Increasing demand for QoS and QoE

Introduction to platform-based business models
Platorm-based business models
 seek to leverage the assets of third parties
 extend the value of economic activity to customers in ways that
engage and benefit them
 create interactions between suppliers / producers and consumers /
users as well as link ecosystems
 can be differentiated by:
 Provided resources (market provided / peer-to-peer provided)
 Ownership (with transfer / without transfer)
Digital platform-based business models have already:
 revolutionized many markets
 brought up companies with impressive market power like Google,
Amazon and Facebook

Identification of relevant platform-based business model
Taxonomy and value drivers for
mobile data applications
 Identified capacity constrained assets:
 Broadcast frequencies
 Broadcast infrastructure
 Ownership:
 Without transfer, as network
operators are contractually
bound to their frequencies
(related obligations concerning network
coverage)

Identification of relevant platform-based business model
Peer-to-peer sharing
 owners of the capacity constrained physical assets compete
on a sharing economy platform
 highly sophisticated and dynamic supply- and demand-side
pricing to balance peer supply and demand
 Reduction in transaction costs (institutional economics)
 Ex ante: e.g. identifying right partner, negotiations
 Ex post: e.g. preparation of individual contracts
Platform owner provided asset
 Digital sharing platform owned by network operators
 Only one supplier per platform
 Rather pipeline business than platform-based business
 No differentiation advantage compared to individual
contracts

Business Model description for the identified scenario
Peer-to-peer sharing economy platform “content delivery as-a-service”
Aim of the business model:
Control and benefit from the converged ecosystems for mobile applications as a whole

 Rivalry among existing competitors
 Direct contracts are identified
 No limitation for the digital platform, as competition is within different
operators
 Bargaining power of suppliers
 MNOs and BNOs are the major suppliers to the platform
 competing companies would most likely compensate each others
bargaining powers on the digital platform
 platform should not be affected from suppliers’ bargaining power
 Bargaining power of buyers
 Similar to bargaining power of suppliers
 platform should not be affected from buyers’ bargaining power
 Threat of new entrants
 once such a platform is initialized and successful, many of the big
players in the ecosystem will try to open up their existing approaches
to other players of the ecosystem in order to compete
 Threat of substitute products or services
 Standardization activities
 Openness activities
 Future frequency allocation

 Complementary products (amended sixth force)
 No complementary product was identified
 Considering the relevance of the USPs for the overall success of the platform, they could be regarded as complementary
products if the company does not hold the legal position to make them exclusive for the platform.
Conclusion:
If the digital platform has created it’s entry barriers by holding exclusivity on the USPs (as defined in the business model), then
none of the six forces is a severe limitation.

Limitations due to Legal matters
Patentability of business model „content delivery as-a-service“
US
• 2014 US supreme court ruling in Alice v. CLS Bank case  refers
to Mayo v. Prometheus and Funk Bros. Seed Co. v. Kalo
Inoculant Co
• Two-step test
• directed to an abstract idea, law of nature, mathematical formula,
or similar abstraction
• determining whether the way the claimed invention implements
the abstraction contains an inventive concept, as contrasted with
being routine and conventional
• The business model content as a service platform can be
described as standard digital marketplace and has thus a very
low likelihood to pass the two-step test of the USPTO
examiners.
EU
• article 52 (2) EPC clearly excludes inventions with
the means of doing business from patentability
Conclusion
Business case „content delivery as-a-service“ not likely to be patentable, as such.

Patentability of computer implemented inventions
If the business model “content delivery as-a-service” as such is not patentable, it is possible that a sophisticated business can
translate it into a few key processes on the digital platform that are required in order to run the business model.
US
• Neither software nor computer programs are explicitly mentioned
in statutory US patent law
• Two-step test (Alice v. CLS Bank case)
• directed to an abstract idea, law of nature, mathematical formula, or similar
abstraction
• determining whether the way the claimed invention implements the abstraction
contains an inventive concept, as contrasted with being routine and conventional
EU
• Under Article 52 of the European Patent Convention (EPC),
computer programs as such are not patentable
• 2 hurdle approach
• Patentable subject matter
• Inventive step requirement
Conclusion
In simple words: The inventive step of the invention has to be achieved via the technical part of the invention
WTO - TRIPS Agreement
• patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an
inventive step and are capable of industrial application.
• Article 27 TRIPS also states that patents shall be available and patent rights enjoyable without discrimination as to …, the field of technology ...

Legal obligations by memberships
Once pure software implemented key processes of the digital “content delivery as-a-service” platform are not likely to be granted as
a patent, as a result, these processes have to be enriched by technical functionality, providing novelty and inventive steps. ….
IEEE
• ETSI member‘s obligations
• to inform ETSI about their own, and other people's Essential IPRs
(Clause 4.1)
• owners of essential IPRs are requested to undertake to grant
licenses on fair, reasonable and nondiscriminatory terms and
conditions (Clause 6.1);
• owners of Essential IPRs who refuse to grant license when no
alternative is available, are requested to reconsider their position
and provide the Director-General with a justification (Clause 8.1)
• ETSI member‘s rights
• to refuse the inclusion of own IPRs in standards
(Clauses 8.1 and 8.2)
ATSC
ATSC shall receive from the person or entity that holds the Essential
Claim written confirmation (using the attached form) that
• A license to the Essential Claim will be made available upon request without
compensation to all applicants for the purpose of implementing the Specification
Document, which license may be conditioned upon license reciprocity with respect
to the same Specification Document; or
• A license to the Essential Claim will be made available upon request under
reasonable and nondiscriminatory terms and conditions to all applicants for the
purpose of implementing the Specification Document, which conditions may
include license reciprocity with respect to the same Specification Document; or
• A license to the Essential Claim will not be provided under reasonable and
nondiscriminatory terms and conditions to applicants for the purpose of
implementing the Specification Document
Conclusion
• Conduct an in depth analysis on all relevant membership contracts of the company before launching that digital platform.
• Make memberships part of the IP strategy

Monopoly on the market
….
US antitrust law
• collection of federal and state government laws
• especially looks at cartels and collusions, mergers and
acquisitions, monopoly and power
• the main statutes are the Sherman Act of 1890, the Clayton Act of
1914 and the Federal Trade Commission Act of 1914 (34).
EU competition law
• articles 101 to 109 of the Treaty on the Functioning of the
European Union (TFEU))
• focused on mergers and monopolization, cartels and collusion and
the abuse of dominance.
Conclusion
• Do not capture the decisions of a single enterprise, or a single economic entity, even though the form of an entity may be two or more separate
legal persons or companies
• A company can limit competition if it is in a position of strength on a given market
• A dominant position is not in itself anti-competitive, but if the company exploits this position to eliminate competition, it is considered to have
abused it. E.g.:
• charging unreasonably high prices
• depriving smaller competitors of customers by selling at artificially low prices they cannot compete with
• obstructing competitors in the market (or in another related market) by forcing consumers to buy a product which is artificially related to a more popular, in-demand product
• refusing to deal with certain customers or offering special discounts to customers who buy all or most of their supplies from the dominant company
• making the sale of one product conditional on the sale of another product

Applicable Generic IP strategies
Peer-to-peer sharing economy platform “content delivery as-a-service”
 ::
Exclusify
improved
utilization of
key resources

360° IP strategy
Introduction
 …

360° IP strategy
Ressource perspective - Risk minimization
Securing value added
 Avoidance of infringing 3rd party rights
 FTO
 Continuous patent monitoring
 Avoidance of unforeseen claims raised by the owners of
3GPP/3GPP2/ATSC patents
 License SEP patents
 Create exclusive partnerships / license agreements with most
relevant patent owners for:
 Broadcast/Broadband convergence network
 Coherent Logix Inc.
 Pooling of broadcast resources
 Sinclair Broadcast Group Inc.

360° IP strategy
Ressource perspective – Suppression of imitation
Exclusifying resources
 Protect all solutions to “optimize the utilization of BC/MC resources”  platform value drivers
 Protect all applications based on the optimized utilization, especially interactions between BC/MC and UC
 Protect all interactions of the platform with other components of the ecosystem
 Declare SEP patents to standardization bodies to be not licensed under FRAND conditions
 Consistent actions against infringements

360° IP strategy
Market perspective – Shaping the market position
Strategic prohibition against competitors
 Assure early exclusivity positions by covering new enhancements to the platform immediately and before discussions with
customers
 Raise the market entry barrier by creating and exclusifying a proprietary interface to the platform for all relevant components
within the ecosystem
 Transfer the exclusive technological position to a protected brand to create long term brand image, simplify market
communication and to further raise the market entry barrier
 Offer a license program for the proprietary interface to the platform solution to all players of the ecosystem
 Allow 2nd sources for all components except the platform
 Benefit via license fees

360° IP strategy
Market perspective – Communication of exclusivity
Skimming willingness to pay
 Promote the protected brand in order to ensure that the customers understand the relevance of the exclusive platform solution
for their business models – provide sample calculations
 Promote the platform as the only platform in the perception of (potential) customers that provides „optimized utilization of BC/MC
resources”, “dynamic data offload from UC to BC/MC” and “ensures expected QoS and QoE“
 Promote the proprietary interface as the only way for other players in the ecosystem to be compatible with the platform solution

360° IP strategy
Identified major IP-strategic positions
 …

Does the convergence of the ecosystems already create a need for
digital platforms?
Convergence of the ecosystems
Identified platfom opportunity:
- Peer-to-peer sharing platform
Identified value added by the platform:
- Reduction of transaction costs
Conclusion:
- Convergence of the ecosystems creates an economic argumentation for
one joint digital platform  market motivation  need

Can IP-strategic positions accelerate the market penetration and sustain
exclusivity of such a digital platform in converging ecosystems, especially
concerning shaping strategies?
IP-strategic positions for the platform as such are unlikely to be achieved, as business models are difficult to protect via IP rights
1st major IP-strategic position: exclusify the improvements to the utilization of the key resources
 additional value added can be created and can be linked to the digital platform
 fosters the acceptance of and concentration on one single digital platform, which is connecting the ecosystems, instead of a variety
of competing and not harmonized options on the market
 supports the communication of a “shaping view”
2nd major IP-strategic position: link the underlying layers of the ecosystems to the platform via a proprietary and exclusified API
connection.
 a larger part of the ecosystems can be controlled and data can be collected as a basis for further value adding applications
 demonstrates “shaping acts”
3rd IP-strategic position: assure sustainable exclusivity by transferring the already created image of exclusivity, reliability, ... to a
dominant brand
 can be exclusified without expiration
 Gives the shaper credibility
Conclusion:
- IP-strategic positions accelerate the market penetration and sustain exclusivity of a digital platform in converging ecosystems not in a
direct matter, but effectively indirectly, if the right starting point is identified.
- IP-strategic positions also support shapers with „the platform“, „the view“ and „the acts and assets“

 …
What are possible enablers and hindrances for such a platform?
Enablers Hinderances
Market position / market
power of equipment vendors
Standardization / frequency
regulation activities
Memberships (licensing,
FRAND,…)
Abuse of a dominant position
Equipment suppliers
Technical knowledge
IP-strategic positions
Partnerships

Master thesis defence Markus Guder MIPLM 2020

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