The stakes within diverse global policy deliberations concerning treatment of Intellectual Property related to standard-setting
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1 The stakes within diverse global policy deliberations concerning treatment of Intellectual Property related to standard-setting ANSI CMF/ICSCA Meeting Agenda 3.4 Miami, Florida: April 10, 2008 Presented by George Willingmyre, GTW Associates 1
2 Main Topics Compromises and balances of interests produce IP related standards policies, procedures and precedents Market dynamics and unresolved problems lead to the rise of new paradigms (where?) Implications of Strategic Policy Discussions ANSI CMF/ICSCA Meeting April 2008 Slide 2
3 Compromises and balances of interests produce IP related standards policies, procedures and precedents A complex balance of interests among stakeholders underpin such policies, procedures and precedents. Most fundamental is the balance of the interests of users of a standard to access and practice the standard without undue burden with the interests of the contributors of intellectual property to the standards setting process to benefit from that contribution ANSI CMF/ICSCA Meeting April 2008 Slide 3
4 The ABA on Standards Development Patent Policy Manual (2007) The Introduction states what is a key challenge in creating a patent policy for a standards development organization: Thus the challenge for each SDO is to develop an inclusive patent policy that encourages all patent holders to join and balances the interests of all its stakeholders: (1) those that contribute patented technology to the development activity, (2) those that make and sell products, and (3) those that use products that incorporate the standardized technology. ANSI CMF/ICSCA Meeting April 2008 Slide 4
5 What is Intellectual Property (IP) related to standards setting? Copyright, ownership & availability of the standards document (not focus of this presentation, however many issues ownership of workproduct, sale vs free, support of standards infrastructure, public right to text in laws/regulations, pirates) Patents & Patent Claims..Opportunity for those who wish to implement the standard to have access to a license to a essential patent claim(s) required for compliance with that standard Not a new issue August 17, 1932 (ANSI) Committee on Procedure: That as a general proposition patented designs or methods should not be incorporated in standards. However, each case should be considered on its merits, and if a patentee be willing to grant such rights as will avoid monopolistic tendencies, favorable consideration to the inclusion of such patented designs in a standard might be given. ANSI CMF/ICSCA Meeting April 2008 Slide 5
6 ANSI patent policy - Inclusion of Patents in American National Standards 2008 There is no objection in principle to drafting an American National Standard (ANS) in terms that include the use of an essential patent claim (one whose use would be required for compliance with that standard) if it is considered that technical reasons justify this approach. If an ANSI-Accredited Standards Developer (ASD) receives a notice that a proposed ANS or an approved ANS may require the use of such a patent claim, the procedures in this clause shall be followed Statement from patent holder The ASD shall receive from the identified party or patent holder either: (a) assurance in the form of a general disclaimer to the effect that such party does not hold and does not currently intend holding any essential patent claim(s); or (b) assurance that a license to such essential patent claim(s) will be made available to applicants desiring to utilize the license for the purpose of implementing the standard either: (i) under reasonable terms and conditions that are demonstrably free of any unfair discrimination; or (ii) without compensation and under reasonable terms and conditions that are demonstrably free of any unfair discrimination. ANSI CMF/ICSCA Meeting April 2008 Slide 6
7 ISO and IEC and ITU agreed in 2007 on a Common Patent Policy for ITU-T/ITU-R/ISO/IEC ISO/IEC/ITU commom patent policy states: a patent embodied fully or partly in a Recommendation Deliverable must be accessible to everybody without undue constraints. To meet this requirement in general is the sole objective of the code of practice. The patent holder is willing to negotiate licences free of charge with other parties on a nondiscriminatory basis on reasonable terms and conditions. Such negotiations are left to the parties concerned and are performed outside ITU-T/ITU-R/ISO/IEC. The patent holder is willing to negotiate licences with other parties on a non-discriminatory basis on reasonable terms and conditions. Such negotiations are left to the parties concerned and are performed outside ITU-T/ITU-R/ISO/IEC ANSI CMF/ICSCA Meeting April 2008 Slide 7
8 United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT) The UN/CEFACT IPR Policy ( Policy ) is designed to promote the goal of enabling the implementation of UN/CEFACT Specifications without the burden of fees or restrictions. The Policy promotes this goal by requiring all Participants in a UN/CEFACT Forum Group to waive their rights to enforce any of their intellectual property ( IPR ) that would be necessary to implement or use a Specification developed in that Forum Group ( Essential IPR ). ANSI CMF/ICSCA Meeting April 2008 Slide 8
9 Market dynamics and pressures leading to the rise of new paradigms (where?) Rise of the Service Economy access to IP needed to conduct service, licenses needed to practice the standard as contrasted to make a product Business Model favors RF licensing essential patents W3C OASIS ; incentive to secure patents necessary to utilize a standard (FCC Digital Radio & ibiquity; FCC HDTV and Rembrandt) Rise of China in the global economy and market perceived flood of unfair royalties leaving China to build products meeting international standards with RAND assurances; submissions to WTO committee on Technical Barriers to Trade; new requirements to limit foreign participation in standards committees, longer term investments in local IP and national standards using that local IP, WAPI etc; development of national patent policy for standards setting ANSI CMF/ICSCA Meeting April 2008 Slide 9
10 Market dynamics and pressures leading to the rise of new paradigms (where?) Increasingly vocal and effective representation of requirements in the developing world Access to Knowledge Treaty Proposal for WIPO to serve gatekeeper role in regard to essential patents; Internet Governance Forum (IGF) Dynamic Coalition on Open Standards (IGF DCOS) addressing most urgent problems related to open technology standards and application interoperability strategic incentives to innovation through market competition and protection of intellectual property in contrast to the benefits to innovation of open collaboration Debate on what is an open standard; Patent license offers by Sun Microsystems and IBM; role of government eprocurement and requirements for interoperability ANSI CMF/ICSCA Meeting April 2008 Slide 10
11 Market dynamics and pressures leading to the rise of new paradigms (where?) Patent Trolls (do not practice their patents/inventions, but assert patents against accused infringers) Forgent; Rembrandt; Vertical Networks; CSIRO Bad Actors Dell; Unocal; Rambus? Disputes, litigation, antitrust and government actions Unsuccssful ex poste negotiation of specific licenses under previous RAND assurances leads to litigation; What does RAND mean? Rise of ex ante type policies at VITA and IEEE; April 2007 U.S. Department of Justice ("DOJ") and Federal Trade Commission ("FTC") report on Antitrust Enforcement and Intellectual Property Rights. with a chapter on standards setting ANSI CMF/ICSCA Meeting April 2008 Slide 11
12 Activities with strategic implications The Way Forward Discussion document for the Open meeting on 12 February 2008 European ICT standardisation policy at a crossroads: A new direction for global success dispaper.pdf 7. Intellectual Property Rights: IPRs essential to the implementation of standards will be licensed to applicants on a (fair) reasonable and nondiscriminatory basis (F)RAND, which may permit, at the discretion of the IPR holder, licensing essential IPR without compensation. However, Royalty free (RF) IPR cannot be imposed by the Commission or a public procurement authority; ANSI CMF/ICSCA Meeting April 2008 Slide 12
13 Activities with strategic implications Towards an increased contribution from standardisation to innovation in Europe COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN PARLIAMENT AND THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE Brussels, COM(2008) 133 final novation/doc/com_2008_133_en.pdf The Commission encourages the ESOs to continue their efforts to make the FRAND policy effective and to develop mechanisms to prevent abuses of the standard-setting process. The Commission will launch a fact-finding study to analyse the interplay of IPR and standards. ANSI CMF/ICSCA Meeting April 2008 Slide 13
14 Activities with strategic implications World Intellectual Property Organization (WIPO) MATTERS CONCERNING THE ESTABLISHMENT OF A WORK PROGRAM FOR THE STANDING COMMITTEE ON THE LAW OF PATENTS (SCP) Possible SSO-WIPO cooperation? (WIPO presentation to ETSI in 2005) Information on patent rights and their effect Input on SSO IPR policies Dispute resolution concerning SSO obligations Increased use of patent information International contex ANSI CMF/ICSCA Meeting April 2008 Slide 14
15 Activities with strategic implications World Trade Organization Committee on Technical Barriers to Trade TBT Code of Good Practice does not address patents Decision of the committee on principles for the development of international standards, guides and recommendations with relation to articles 2, 5 and annex 3 of the agreement does not address patents China submissions: China is of the view that, IPR issues in preparing and adopting international standards have become an obstacle for Members to adopt international standards and facilitate international trade. It is necessary for the WTO to consider negative impacts of this issue on multilateral trade and explore appropriate trade policies to resolve difficulties arising from this issue. ISO Guide 59 Code of Good Practice contains text addressing patents Standards should not be drafted in terms that include the use of a patented item unless the use of such an item is justifiable for technical reasons, and the rights holder agrees to negotiated licenses with interested applicants, wherever located, on reasonable terms and conditions ANSI CMF/ICSCA Meeting April 2008 Slide 15
16 Activities with strategic implications World Trade Organization AGREEMENT ON TRADE- RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS (TRIPS) Article 31 Other Use Without Authorization of the Right Holder of the WTO TRIPS Agreement addresses uses of a patent without the authorization of the right holder, including use by the government or third parties authorized by the government Precedents in the case of medicines Case involving compulsory licensing of patents required for manufacturing recordable compact disks ANSI CMF/ICSCA Meeting April 2008 Slide 16
17 Activities with strategic implications Article 31 Other Use Without Authorization of the Right Holder Where the law of a Member allows for other use of the subject matter of a patent without the authorization of the right holder, including use by the government or third parties authorized by the government, the following provisions shall be respected:(a) Authorization of such use shall be considered on its individual merits; (b) Such use may only be permitted if, prior to such use, the proposed user has made efforts to obtain authorization from the right holder on reasonable commercial terms and conditions and that such efforts have not been successful within a reasonable period of time. This requirement may be waived by a Member in the case of a national emergency or other circumstances of extreme urgency or in cases of public noncommercial use. In situations of national emergency or other circumstances of extreme urgency, the right holder shall, nevertheless, be notified as soon as reasonably practicable. In the case of public non-commercial use, where the government or contractor, without making a patent search, knows or has demonstrable grounds to know that a valid patent is or will be used by or for the government, the right holder shall be informed promptly; ANSI CMF/ICSCA Meeting April 2008 Slide 17
18 Activities with strategic implications The recent decisions of the Thai Ministry of Public Health to announce the Government Use of Patents on three patented drugs, i.e., Efavirenz (Stocrin ) of Merck Sharp and Dohme),Lopinavir+Ritonavir (Kaletra ) of Abbott Laboratory) and Clopidogrel (Plavix ) of Sanofi-Aventis), based on proposals from the National Health Security Office, have raised several questions among the public and also the concerned partners as well as the pharmaceutical industries, both in the country and internationally. According to the TRIPs agreement article 31 (b), and the Doha Ministerial Declaration on TRIPs Public Health in 2001, which are clearly reflected in the Thai Patent Act B.E as amended the Thai Patent Act (No. 3) B.E (Document No. 1, 2 and 3), there may be three broad mechanisms of using the patent rights by others than the patent holder. ANSI CMF/ICSCA Meeting April 2008 Slide 18
19 Activities with strategic implications Trade Barriers Regulation EU report criticizes Taiwanese compulsory licensing practices for compact discs Brussels, 30 January 2008 A European Commission report released concludes that the Patent Law of Taiwan and certain decisions made under it, are inconsistent with WTO rules on intellectual property. Provisions in the law have allowed a Taiwanese company to be granted a compulsory license for the production of recordable compact discs (CDRs), a technology developed by the European company Philips. The report recommends that the Commission should start WTO proceedings if Taiwan does not take concrete steps to amend its Patent Law and reverse the compulsory licence decisions against Philips within 2 months. ANSI CMF/ICSCA Meeting April 2008 Slide 19
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