5 REASONS WHY PATENT DISCLOSURE IN STANDARDS SETTING ORGS DOESN’T WORK(AND WHAT TO DO INSTEAD)

BRAD BIDDLE

VISITING SCHOLAR, LEWIS AND CLARK LAW SCHOOL

HTTP://BIDDLE.US

1. Over-disclosure

2. Under-disclosure

3. Timing

4. Action

5. Cost

1. Licensing commitments

2. Disclosure obligations

EXAMPLE: ETSI

EXAMPLE: ANSI

(1) Inclusion decisions; (2) facilitate licensing

EXAMPLE: IEEE

DisclosureLicensing commitment

Letter of Assurance Blanket LoA

EXAMPLE: MOST CONSORTIA

Licensing commitmentonly

USB, PCI-SIG, etc.

OBSERVATION: MANY STANDARDS DEVELOPED W/O DISCLOSURE

Estimate: >50% of the 250+ standards in a laptop developed w/o a disclosure obligation

http://standardslaw.org/How_Many_Standards.pdf

1. OVER-DISCLOSURE

ESSENTIALITY STUDIES

FOSS Patents blog (2013)

Jurata & Smith (2013)

RPX (2014)

Cyber Creative (2013)

PA Consulting (2012)

PA Consulting (2006)

Fairchild (2007)

Fairchild (2008)

0% 20% 40% 60% 80% 100%

EssentialNon-essential

INCENTIVES FOR OVER-DISCLOSURE

1. Antitrust risks

2. Licensing negotiation leverage

3. Marketing/PR

4. Preserve enforcement rights

5. Uncertainty & timing

2. UNDER-DISCLOSURE

FACTOR #1: “KNOWLEDGE”Organization Scope Standard

IEEE Personal “personally aware”

W3C Personal “not required to contact” others

IETF Personal “reasonably and personally known”

ITU/ISO/IEC Corporate? “known to the participating party”

ETSI Corporate “reasonable endeavors… to investigate”

VITA Corporate “good faith and reasonable inquiry”

Companies will have patents that are not disclosed

FACTOR #2: IPR RULES DON’T APPLY TO EVERYONE

3. TIMING

LATE DISCLOSURES COMMON, E.G.:

Org Specs # of disclosures

# received post spec finalization

%

IEEE 801.11a, b, g, n, ac, ad 109 44 40%

ETSI 3GPP TS 24.008 Release 8 (LTE)

81 81 100%

ETSI 3GPP TS 24.008 Release 11 (LTE)

96 93 96%

EXPLANATIONS FOR LATE DISCLOSURE

1. Impossible to determine essentiality early

2. ‘Just-in-time’ patenting

3. Gamesmanship

Huge disconnect between theory and practice

4. ACTION

THE ACTION DILEMMA

• A disclosed SEP might be highly impactful

• Impossible for engineers to judge

• Difficult for lawyers to coordinate & to judge

W3C: PAGs take up to 24 months to resolve issues

ETSI: 170,000 disclosures, 100s per month no impact

at working level

5. COST

SOME MATH:• 1 disclosure = 12 hours of patent lawyer / patent

agent / engineer time

• 12 hours @ $250 / hour = $3,000

• 167,270 disclosure documents in ETSI database

• 167,270 x $3,000 = $501,810,000

• # of ICT standards orgs: 500+

+ RISKS:• Over-disclose unwanted RAND or RF

commitment

• Under-disclose antitrust or non-enforcement risk

• “Reasonable endeavors” compliance program

• 3rd party disclosure = intentional infringement ‘knowledge’?

1. Over-disclosure

2. Under-disclosure

3. Timing

4. Action

5. Cost

Undermine licensing facilitation goal

Undermine inclusion decision goal

“AND WHAT TO DO INSTEAD”

STEP 1:

Licensing commitmentonly

STEP 2: • More predictable and efficient RAND

commitments

o Injunctionso Royaltieso IPR policy innovation needed

STEP 3: • Patent remedies reform

o Address non-participant problemo Broader than standardso ICT v. pharma

BRAD BIDDLEBRAD@BIDDLE.USWWW.BIDDLE.US