Presentation to NAS Committee on IP Management in Standards-Setting Processes Dan Bart President and CEO Valley View Corporation November 4, 2011
Who is Dan Bart? Current Chairman of the ANSI IPR Policy Committee (about 6 years) Past Chairman of ANSI Patent Group (4 years) Past Chairman of the ANSI Copyright Group (2+ years) Worked at GTE over 28 years at Technical and Legal positions Senior Vice President, Standards and Technology Department and CTO at TIA (over 13 years retired end of 2006) 4 th largest ANSI-Accredited SDO On ANSI Board since 1996 and ANSI EXCO for over ten years Current Vice Chair, SGIP IPRWG IPR Presenter at ANSI, NIST, USPTO, USTR, GWU Law School, WMACCA, IPO, AIPLA, etc. Chairman many years at Global Standards Collaboration (GSC) IPRWG www.gsc.etsi.org/ Frequent participant in Federal Agency proceedings related to IPR and Standards FTC, DoJ, NIST, USPTO, USTR, etc. Active in ABA Committee that developed Manual on SSO IPR Policies
Disclaimer Although I have been involved with many organizations during my professional career, these are my personal views and observations. Although I am an attorney, this presentation is for general education and NOT presented as legal advice, there is currently no attorney/client relationship with you, you should always seek legal advice from your legal counsel. I am NOT seeking a seat on the Committee. I do too much volunteer work related to IPR and Standards already. I do support the work of this Committee and want the output of this Committee to be credible, useful, and not perceived as biased in any way.
VVC Comments to NAS Valley View commented to the NAS on the issue of BALANCE of the Committee As an ANSI Auditor, I looked for Balance and the lack of Dominance in Consensus Bodies for SDOs I was auditing. ANSI Essential Requirements Definitions: 1.2 Lack of dominance The standards development process shall not be dominated by any single interest category, individual or organization. Dominance means a position or exercise of dominant authority, leadership, or influence by reason of superior leverage, strength, or representation to the exclusion of fair and equitable consideration of other viewpoints. 1.3 Balance The standards development process should have a balance of interests. Participants from diverse interest categories shall be sought with the objective of achieving balance
ANSI Essential Requirements 2.2 Lack of dominance Unless it is claimed in writing (including electronic communications) by a directly and materially affected party that a single interest category, individual or organization dominated the standards development process, no test for dominance is required. 2.3 Balance Historically the criteria for balance are that a) no single interest category constitutes more than one-third of the membership of a consensus body dealing with safety-related standards or b) no single interest category constitutes a majority of the membership of a consensus body dealing with other than safety-related standards. The interest categories appropriate to the development of consensus in any given standards activity are a function of the nature of the standards being developed. Interest categories shall be discretely defined, cover all materially affected parties and differentiate each category from the other categories. Such definitions shall be available upon request. In defining the interest categories appropriate to a standards activity, consideration shall be given to at least the following:...
VVC Comments to NAS In reviewing the make up and current affiliations of the proposed committee members the committee looks very unbalanced and dominated by academics. Of the 12 current committee slots, 7 are academics, 2 are from industry, 1 (retired) from an SSO/Trade Association, none from government, and one each Venture Capitalist and Law Firm. It is SSO IPR Policies being studied but very limited SSO involvement, no ANSI participation, and very heavy academic participation. 7 Academia 2 Industry 1 SSO/Trade Assn 0 Government (0 Consumer too) 2 Others (Venture Capitalist and Law Firm involved in Fora/Consortia)
Section 15 (FACA) Sec. 15. (a) In general.--an agency may not use any advice or recommendation provided by the Academy of Sciences that was developed by the use of a committee that was created by that academy under an agreement with an agency, unless (b) Requirements.--The requirements referred to in subsection (a) are as follows: (1) The Academy shall determine and provide public notice of the names and brief biographies of individuals that the Academy appoints or intends to appoint to serve on the committee. (B) the committee membership is fairly balanced as determined by the Academy to be appropriate for the functions to be performed, Does this Section apply to THIS COMMITTEE?
Principles for SSO IPR Policies (From ANSI Comments to the EU) Principles for SSO IPR Policies include: Transparency Essential information regarding standardization activities is accessible to all interested parties. Openness Participation is open to all affected interests. Impartiality No one interest dominates the process or is favored over another. Effectiveness and Relevance Standards are relevant and effectively respond to regulatory and market needs, as well as scientific and technological developments. Consensus Decisions are reached through consensus among those affected. Performance Based Standards are performance based (specifying essential characteristics rather than detailed designs) where feasible. Coherence The process encourages coherence to avoid overlapping and conflicting standards when appropriate.
Principles for SSO IPR Policies (2) (From ANSI Comments to the EU) Principles for SSO IPR Policies include: Due Process Standards development accords with due process so that all views are considered and appeals are possible. Technical Assistance Assistance is offered to developing countries in the formulation and application of standards. In addition, U.S. interests strongly agree that the process should be: Flexible, allowing the use of different methodologies to meet the needs of different technology and product sectors; Timely, so that purely administrative matters do not result in a failure to meet market expectations; and Balanced among all affected interests. http://www.ftc.gov/os/comments/patentstandardsworkshop/00006.html
Factors in Describing an IPR Policy (From ANSI Comments to the EU) Factors to consider describing an IPR Policy : a. Type of Policy (e.g., does the policy apply to patents, trademarks, copyrights, or all three?); b. Scope of Disclosure (e.g., does the policy apply to just patents that contain essential claims, patents that likely contain essential claims, or the claims themselves; or does the policy not require any specific disclosure information, but rather seeks disclosure that the patent holder just believes that it holds patents with claims that likely will be essential, etc.; or is the policy just participation based with no obligation to disclose, but everyone participating agrees to a licensing commitment, sometimes with the option of opting out specific patented technology; or is it a mixture of the two general approaches?) c. Scope of Licensing Commitment (e.g., does the license commitment apply to just essential patent claims vis-à-vis the final version of the standard, or more broadly to patents generally? Does it apply to patent applications?); d. Timing of Disclosure (e.g., is early disclosure encouraged or is it mandated? If it is mandated, how is that obligation described: is it based on the individual participant s knowledge, or is knowledge imputed to the participant from the participant s employer?)
Factors in Describing an IPR Policy (2) (From ANSI Comments to the EU) Factors to consider describing an IPR Policy : e. Patent Searches (does disclosure expressly require or implicitly necessitate the IP holder to conduct patent searches or is disclosure based on the knowledge of the particular persons? Are such implied or express actions reasonable and practical when considering the environment for the standards development and market for the final standard?); f. Form of disclosure (e.g., does the policy require the use of a specific form/content of disclosure?); g. Licensing Assurance (e.g., can the patent holder select from options in terms of its licensing commitment, such as RAND/FRAND,6 RAND/FRAND compensation-free, or neither, or is the commitment pre-selected by the SSO and/or the specific technical committee?); h. Licensing Terms (e.g., does the SSO allow reciprocity, scope of use, disclosure of licensing terms to the standards body ex ante, patent pools, etc.?); i. Enforcement (e.g., how are disputes resolved, what competition laws apply and how many complaints or what litigation has the SSO experienced in the past ten years regarding the implementation of its IPR policy?); and j. Industry Impact (e.g., what are the practical implications of the policy s implementation, particularly as it affects innovation, and the global trade and competitiveness of U.S. industry?).
Business Models Drive IPR Policy Debates Different standards activities or policies impact different business models and IP portfolios differently: Licensing model seeking reasonable return on R&D investment Product model monetize IP through products Often defensive approach in standards Do not actively seek licenses from implementers May want to pay lower royalties to reduce costs May want to raise rivals costs Service providers use loss-leader business model (subsidized handsets) to drive monetization of services Consulting model seeking to transfer value quotient from product/licensed IP to bring value to consultant offerings No One Size Fits ALL! See TIA Contribution to GSC-12 IPRWG Doc 11 www.itu.int/itu-t/gsc/gsc12/index.html
FTC has Recognized Diversity of Needs The FTC has recognized the wide ranging number and diversity of SSOs and that each has unique needs among its members, their business models, and the technology areas that they address. The FTC has advised several parties in its responses to comments in the N-Data proceeding of its understanding that: The Commission understands that standards-development organizations craft rules concerning intellectual property rights that recognize the dynamic character of the standards process, the necessary balancing of the interests of stakeholders in the process, and the varied business strategies of those involved. The content and intention of such rules will be one of several factors to be assessed in determining whether, under any given set of facts, challenged conduct by a holder of intellectual property rights may constitute a violation of the FTC Act. In addition, any such assessment would be likely to include (among other things) the timing and content of any assurances provided the holder of IP rights; the nature, timing and offered justification for any changes in those assurances; and the effects of the conduct on the standard-setting process and competition in relevant markets affected by the standards. As with many other competition-related enforcement matters, the question of liability under the FTC Act likely will turn on a careful assessment of the surrounding facts. (FTC response letter to the American Bar Association)
Summary Consider the BALANCE of the Committee Provided Principles and Factors for SSO IPR Policy Evaluations and Descriptions Consider international impacts of anything done or said domestically No one size fits all IPR Policies, that cannot be ranked or graded. Driven by Business Models Need to protect IPR and balance rights of IPR Owners and Users. May want to cover more than just essential patents in standards in the Study but also look to Copyrighted Software in Standards and other forms of IPR, XML, Schema, etc.