I just found an old presentation of me that I have given in 2006 at the EPO in Munich. The 2006 content is still correct and relevant... What in addition I have added is some of the development since 2006 and what else need to be done in order that we get a complete coverage of the SDO standardization patent policies and better solution.

1. Some Remarks on
Documentation/Examination
Issues Regarding Patents in
Standards
Dr. Istvan Sebestyen
istvan@sebestyen.de
2006-09

2. 2
Disclaimer
This short presentation was given on September 18, 2006 at the
European Patent Office in Munich.
Some slides and ideas came from my good friend Dave Lindbergh, credit
goes to him.
This is the strictly personal view of the author. And these views do not
necessarily reflect those of Siemens, IMTC, ITU-T, Ecma
International....etc. or anybody else.
Istvan Sebestyen
2006-09-18

3. 3
Something wrong with the
SDO IPR Policies?
Fundamental assumptions of the “classical” IPR policies are shaking for standardization
Including:
 “One size fits all” policy works for all standards
 All SDOs must have similar/same policies
 Technical and IPR work must be separated
 Licensing practice is strictly separated from SDO work and are completely unrelated to
standardization (incl. no feed-back)
 No validation check of submitted IPR information and licensing statements
 Voluntary “gentleman” like behaviour of actors assumed, no “Standards Police” needed

4. 4
Several candidate areas for improvement
Implementation and Recordkeeping
Providing better IPR information in contributions and draft standards
Providing and updating IPR licensing declaration to improve quality of
IPR Databases….
.....
Improve the patent laws themselves.

5. 5
Providing IPR information in contributions and draft standards
 IPR information (*) usually on “best effort basis” by standardization
expert (during development); they are technical experts,
 Gets logged in the meeting reports, but usually no database entry for
such information
 No validation and judgment by the SDO;
 3rd party not in the loop, Patent Office not in the loop.
(*) Information on Patents and Patent Applications (some SDOs require only on
„published“ applications, others on everything)
Personal view: Information on only Published Patent Applications is too late. At
least it should be hinted that patent might be possible, without giving details. The
alternative, i.e. not to hint anything, then e.g. approve the standard, and provide
patent statement after approval is usually regarded as “patent ambush”.

6. 6
Providing IPR licensing declaration
 Formal IPR licensing statements (*) submitted by legal entity of patent
holder (during development, latest at approval);
 Will be entered into the Patent Statement Database, if statement
formally correct
 but no validation and judgment by the SDO;
 3rd party often not in the loop, Patent Office not in the loop;
 what with “late” statements?
(*) License statements are needed on Patents and Patent Applications (in some
SDOs only on published applications required = might lead to the perception of a
legal patent „ambush“);

7. 7
Recordkeeping
Recordkeeping, Archiving Improvements needed in some SDOs (but. e.
g. ITU-T has already changed its past Record keeping policy recently!)
 Must keep ALL records for future research
 Not just a subset, as currently often the practice
 Must keep permanently to prove prior art
 Good indexes, searchable text would be desirable

8. 8
Don’t Standards Bodies already do this?
Standards Orgs. often don’t keep records
Their records are not kept forever
Some documents (though very important) have not been archived at all
 (ITU-T Rapporteurs meeting docs, TDs (incl. participation lists), Delayed docs) –
e.g. ITU-T has recognized it, and has changed its policy in 2005/11. They
archive now everything. Task: What about other bodies? E.g. ISO, IETF, ETSI…
Many older records on paper only
 Especially prior to 1995
 Much is already lost forever
 “Historic Archive” projects (e.g. IMTC on multimedia standards) try to rebuild the
lost archives (collecting and scanning old paper docs, currently 25 Gbyte
scanned data with over 60k docs). Task: It should be clarified which are the
areas, where such “historic archives” are needed? E.g. Multimedia, Optics,
XDSL,….

9. 9
Relation between Standardization and Licensing
For the normative part of the standard only essential patents are relevant.
Essential patents for a standard should ideally be
1) truly essential, i.e., necessarily infringed, and no “trivial patents” please
2) valid, i.e., original inventions,
3) “valuable” for the standard, i.e., it should contribute significantly to the technical
performance of the standard, e.g., audio/video quality or low-complexity
implementation. If it is not, it should be avoided in the standard.

10. 10
Relation between Standardization and Licensing
Patent Licenses related to a standard should be
1) all-encompassing,
2) truly "reasonable" in all markets and over all time,
3) available quickly.

11. 11
Relation between Standardization and Licensing
Very old issue (was already part of the 1st patent policies in the 1970-80s)
The „classical“ patent policies (which still work for most cases) strictly separate
standardization and licensing, with the exception of the case if no license is
available from the Patent Holder for a standardized technology. In that case:
 Standard body has – in principle – to find a different technical solution
 Problem: Who decides whether the patent is relevant for the standard? Since
SDOs do not check the validity of patent claims. PTO could do it…
 Therefore „special“ patent policies (e.g. W3C, …) foresee the setting up of
internal Patent expert groups to evaluate the validity of patent claims related to
the draft / approved standard.
 Question: What is the legal consequence of that for the SDO?

12. 12
Relation between Standardization and Licensing (cont.)
„Special“ patent policies also establish links between standardization
and licensing. In that case in general:
 The SDO defines before inviting contributions a market driven patent
strategy for the future standard (e.g. RF; RAND; FRAND; RF “Core” +
RAND “Options”), and standardization is carried out accordingly.
 In the Standards Evolution Process the SDO body takes into account
the feedback from the Licensing. The licensing process itself is outside
the SDO.
 Therefore „Special“ patent policies foresee – on a case by case basis
for the “special case” - the setting up of internal Patent expert groups to
ensure the above.
 Question: Are there legal consequences of that for the SDO? (e.g. can
an SDO define from the outset that they look for a technology in a
future standard that ensures a “reasonable license” of x%?)

13. 13
Considerations for Patent Reform
... Policymakers in some countries are considering reforms to the patent system to improve
the tradeoff between the social costs of monopoly and the benefits of technology investment
and disclosure. Compared to law regarding chattel and real property, for which exclusive use
and possession are meaningful, intellectual property law is historically recent and doubtless
still imperfect.
From our experience in standardization, we make two observations that may be relevant to
future patent law reform:
1. The prevalence of patents which are widely considered “obvious” seems to be
increasing. The social benefits of patents do not flow if the patented inventions would have
been quickly and independently discovered by others. We note that as new fields of industry
emerge, they present new problems to be solved by technologists. The mere fact that a
problem is new, and therefore has not been solved before, should not be considered
evidence that the solution is non-obvious. On the contrary, “invention” of a solution very
soon after the appearance of a problem should perhaps be considered as evidence of
obviousness.
2. The monopoly power granted in a patent is greatly enhanced when patented
technologies are incorporated in standards -not only can the patent holder demand
payment for and limit the use of the technology, but the use of the patented technology is
mandated by the standard (Consequence: Patent farming as business model). Perhaps the
absolute monopoly power conveyed by technology patents should be limited or restricted to
some degree in such situations.

14. 14
Thank you!
Questions?

15. What has changed since 2006?
Some progress made… But we are still not there where we should be…
Actually the above 2006
description of the situation and problems
is still accurate in 2018…..

16. The “One size fits all” standardization patent policy has failed
While in 2006 the FRAND based Standardization Patent policy had
almost monopoly (perhaps with the exception of the RF (Royalty Free)
based policy of the W3C) in 2018 there is a broader choice of truly
different SDO patent policies:
•“Classical FRAND policies” exactly like in 2006 (e.g. ITU, ISO, IEC,
ETSI, CEN/CENELEC, IETF…) – i.e. both FRAND and RF (=“FRAND0)
patent declarations to SDOs permitted
•“Truly RF policy” (e.g. W3C, AOM,…) – i.e. only RF patent declarations
are permitted.
•Mixed policies (e.g. Ecma International) – upfront SDO high level (e.g.
GA) needed to determine which of the “Classical FRAND” or “Truly RF”
policy to be applied for a concrete standardization project.
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17. Modest Development of the “Classical FRAND policies”
• “Classical FRAND policies” are basically the same as in 2006 – i.e.
voluntary FRAND and RF (=“FRAND0) patent declarations to SDOs
are submitted, where they are stored in the relevant SDO “patent
database” – all on self-declaration basis, without substantial validation
of the statement by anybody. This leads in same cases to extreme
large number of declarations related to one single standard.
• However, since 2006 the quality of patent databases related to its
operation became better.
• Also the storage of all standardization documents – due to
digitalization – became much better. The need for scanned “historic
archives” of paper documents that the SDO did not keep anymore
went also back.
• Still strict separation of technical standardization in the SDOs and
licensing, still no interaction and little feedback.
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18. Modest Development of the “Classical FRAND policies” (cont.)
• Several failures of licensing “Patent Pools” (like for ITU-T H.265).
Questions if patent pools are the right answer for the so-called
“complex patent cases” in standards.
• Licensing of “Standard Essential Patents” (SEPs) became of such
“complex patent cases” became such a serious issue that IPR
Committees of some classical SDOs that earlier used to serve the
internal technical standardization working groups (i.e. SDO and
members’ engineers) now only discuss licensing issues (i.e. SDO and
members’ patent lawyers).
• The problems have been also recognized at the political level (see EU
Communication from the Commission to the European Parliament, the
Council and the European Economic and Social Committee Setting
out the EU approach to Standard Essential Patents - Brussels,
29.11.2017 COM(2017) 712)
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19. Further development in the “Truly RF policies”
• Not only W3C, but several others, like AOM (Alliance for Open Media)
• More sophisticated than the FRAND policies, therefore the policy must
be applied only to special cases when such policy is needed (e.g. RF
media codecs, Internet-, Web-standards etc.)
• Easier if the standardization topic is in an area where there are usually
no or few patents (like computer programming languages)
• But if the topic is in an area with many patents the interworking of a
technical standardization team and a legal team is necessary
• “Fast-track” of Truly RF standards into SDOs with FRAND patent
policy is possible, but for the receiving SDO it must be a “yes” or “no”
type of approval, only editorial changes are permitted, but no
substantial, technical changes (that might spoil the RF status).
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20. Mixed FRAND and RF policies
• Some SDOs (especially with broad subject scope) have recently
adopted this, like Ecma International (e.g. for Web-scripting standards
like JavaScript/ECMAScript, Dart)
• Business model decides what patent and licensing policy is desirable
for the new standard (e.g. “Base Web standards should remain RF”)
• SDO high-level management body (e.g. the General Assembly)
decides “upfront” when the FRAND or RF based policy should be
applied for the upcoming standardization process.
• When that decision is taken then the standardization is following either
the FRAND or the RF policies (see the slides on those above)
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21. So, what is still missing? Solution to the “complex patent cases”….
• So, while a lot of significant progress has been made since 2006, the
solution of the first problem: standards with “complex patent cases”
(i.e. many patents with different values, with many genuine and fake
patent-holders…) is still unsolved.
• For this complicated, but usually important, fortunately rare cases (e.g.
for some media coding standards, modem/xdsl standards, mobile
communication standards,…) still a new SDO patent policy model is
needed. Most likely it will be a solution similar to the RF patent policy
models, only applied for FRAND patents.
• Such a solution would be definitely better as it would prevent the
emergence of the “complex patent cases”, and that is better than to
find remedies (e.g. via licensing and court measures) for the already
developed “complex patent cases”.
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22. 22
Thank you!
Questions?